Anyone have any thoughts on the best (most efficient) use of labor? In runnning a remodeling company, for example, if one had 10 employees, would one be better off having ten guys who were jacks of all trades (but masters of none) or having ten specialized individuals?
In other words, what’s the more profitable position for a remodeler/builder: Being semi-skilled in all trades–but a master of none–or being semi-skilled in many trades and a master of some?
I tend to think that the concepts of the division of labor in creating wealth apply in the setting of a small remodeling company.. That is, having individuals, or small groups (crews) which are specialized in a few fields is preferable to having large groups which are only moderately skilled in many fields.
To be specialized or diversified. That is the question.
Replies
From experience (limited) working within a group, I think it best to have generalists who each have a specific strength. By assembling (yea I know it ain't easy) a group like that, you have your specialties covered by people who work as generalists when out of their strong field. If surrounded by jack-of-all-trades (more is not better) you also need a quality control baby sitter( sometimes just a baby sitter). I would rather hire good hard working inexperienced labor and manage that. If you are asking about running remodeling like tract housing (based on " small groups (crews) which are specialized") I think that approach might lead to greater productivity and higher gross at a loss of quality and difficulty staying as fluid as a remolding schedule. Come to think of it, lowering quality to tract housing level may cost referrals and higher call back costs......possibly resulting in no net gain. That's just my pennies in the pool. there are lots of typers here who are older, more experienced, and probably smarter.
Kevin
"I think it best to have generalists who each have a specific strength."
From my experiences working on and around different crews/companies I'd say taht would be the best target to shoot for.
Too much "diversification" ... and U never reach that top level of quality or craftsmanship.
Too much "specialization" ... on a company crew ... and sooner or later all the employees all get burned out. Plus .. unless it's the best company to work for around ... they'd all leave to be subs in that particular field, right?
The problem though ... no one wants to dig ditches and everyone wants to run trim.
Jeff
Buck Construction
Artistry in Carpentry
Pgh, PA
"The problem though ... no one wants to dig ditches and everyone wants to run trim." been there, done that. I try to sub out any serious "ditch digging" or have temporary help to handle the gpl. In small doses a little "ditch digging" builds character and "we do that just enough to remind ourselves that we don't want to do it" to quote a friend.
Kevin
Good thoughts...And I'd tend to agree with you all.I guess what I'm looking at is two sides of the business and how to manage them both more efficiently. On the one hand we have the maintenance and repair side where a number of rental units (owned by the company) are in constant need of maintenance, as well as a large portion of the incoming jobs being more of the repair/renovation of commercial buildings and apartments.. On the other hand, we have more and more high-end remodels (kitchens, baths, complete home make-overs) coming our way that we'd like to be able to get to. Having a group of guys who can wear both hats--building maintenance guy, and remodeler--has seemed to work for now. But profitability is increasingly becoming an issue. The remodels don't seem to go as well on the books, and frankly, I'd like to see us get better on the finish side of things. My guys were all hired as "tradesmen" and they do all have stregnths, but are mostly generalists. I don't think I have enough stregnths to pull off some of the more lucrative (and custom) remodels. Also, as Jeff said, no one wants to get pulled off of trimming a job to go snake a drain. And skilled carps don't like to be told to rip out glue-down carpet in an office building. There's obvious frustration in guys when they can't do what they're best at. And it shows in their performance--which costs me money. Which brings us back to the beginning. Shouldn't guys focus on what it is they do best--in order to get better at their strengths--in order to be happier, more productive, and do better work? Sonny's made me think now about perhaps breaking the company into two (or atleast two divisions)--one building maintenance and one for new remodels. Guys wearing the remodeler hats would be more skilled, more specialized, have more of their own specialty tools, and necessarily get paid better than the guys with the maintenance hats. OR, lose the "tradesmen" altogether, hire a few Project Managers to run independent subs on remodels and hire (or form) a building maintenance company to take care of the rentals.What think ye?
I'd just say keep in mind ... pay the position, not the person.
And following that logic .... U won't very often pull the top paid trim guy to go dig ditches for a week ....
or you'll find renting the machinery for him to do it quick keeps him happy and still saves U money.
dividing the company sounds like something to take a good look at. I worked one very high end design/build company that took on maintenence work to stay in touch with old customers ... but their approach wasn't organized at all.
I was hired to be their top trim/cab guy. They had one fantastic all around lead who could run their top dollar additions from start to finish and jump in and do any task needed. Great ditch digger, great crown moulding installer.
They had another lead that was real strong on finish work, he always needed a grunt for anything out side of trim though. I spent most of my time between their projects ..as they both got the higher end stuff .. due to their fit and finish.
But I never understood when I was sent to the second guy's site to install a kitchen or bath .... and a ditch needed dug ... why I'd go dig it instead of his helper. They'd leave his helper to stand around and be useless ... and I'd get pulled off the job to do the hard labor.
Never complained ... I always had and still do most of my own labor ... but couldn't see the logic of pulling a skilled set of hands away from a skill job and leave a basic laborer there. That lead used to complain too because he knew me and him would get 3 times the work done as him and the helper.
They did that all the time ... just sent who ever was right there standing in front of them. The framers would end up running trim .. the trimmers digging footers ... the laborers pretending they know how to frame. Everyone got so used to it no one bothered to complain anymore! Just go somewhere and get paid.
Defeated the whole purpose.
Jeff Buck Construction
Artistry in Carpentry
Pgh, PA
That's what I did when I owned the company. We serviced 121 condo associatons so I created a "Condo Division" which, like any large company "division", had it's own budget, hired and fired it's own guys, scheduled it's own people, etc. It's the only way to be able to document the numbers for each division, while making each division responsible for itself, and justify it's existence.We ended up disolving the Condo Divison when we realized we could no longer get exceptional people as opposed to the run of the mill type of person. That was when we switched to subbing out nearly everything. The PMs only did things like if a large bath remodel needed 2-3 hours of trim or drywall work - the PM did it instead of trying to get a sub at the job for such a small job for them.
This is a tough one.
On one hand it can be much better for scheduling etc if you can count on one guy to be able to handle most anything that comes along.
but from the Carps view, that can suck because you get stuck doing the $hit work more than the good stuff.
or you get yanked around putting out fires.
all subs means all specialists but also means you gotta rule with an iron hand and schedule schedule schedule.
We use almost no subs to avoid scheduling hassles but we got guys(one guy now, 1 quit) who wont roof or get on ladders. so he's always on a kitchen or bath job, that mens less of those for the rest of us
Personally I like having helpers and young backs doing most of the grunt work.
but then you gotta keep em busy or send em home when there's nothing left for them to handle.
And all the young guys nowdays think they should be finish carps after 5 years of exp.
there is no perfect system
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"And all the young guys nowdays think they should be finish carps after 5 years of exp."How many years exp. would you say is enough?-DougR
The answer to your question is answered in several other questions:
1. Your location
2. Your target market
3. What you prefer as far as project type
4. If you want the money or want the aggravation
About a year before I sold my business to my two sons in 1999, we decided to let everyone (13 in the field) go except for four people. We retrained three as Project Managers and one a a Super. Back then we did just under $1M. This year, my son will do about $5M and with triple the industry average in net profit. He’s also since hired two full time salesmen. One has already made about $60K for himself in commissions since 1/1/05. Jobs range from about $60K to well over $1M.
All work is subbed out expect for demo, which is done by the PMs. Since subs are used, “guestimating†is nearly totally eliminated. There’s is a reason why builders usually sub everything out. It’s more profitable.
Obviously switching to his system does not mean “all†problems or aggravation goes away, but it’s more profitable, less time is mandated by the owner to run the business, and one PM can run 2-4 jobs depending on their location to each other.
In effect, you hire and operate with “managers†as opposed to “tradesmen.†So you will be delegating to managers instead of to tradesmen as well. IMO, this is also the only way to grow smartly.
Anyway, it’s something to consider because this is an important decision.
Hi Sonny : Obviously your plan works, and to have kids continue the path is great.
I'm in a similar position. I've got 2 (of 4) sons coming in, and I am attempting to specialize and target my customers.
Question, I am currently training/educating 2 sales persons and would like to pay them on a commision basis.
Do you have any base lines or tips, you could give, on a" fair for all" sales system ? Cheers.
Mr. T, you are right, it is a difficult decision to make. I think it must be made based upon the priorities, personality and "druthers" [remember I'm in south Fl now (-:] of the owner. And again, when using subs, an iron hand must be employed. I suggest you read a couple of books by Jack Welch - great visionary and terrific manage, which is what we all are - including managing ourselves.Of course, if you don't have an iron hand with your own employees also, they instead of you, will run "your" business. Fair, but iron hand employed.Eric, I suggest you email my son Tom, ([email protected]) or call him at 239-263-9660 and talk to him. My wife Barb might answer (runs his office) , or Jennifer his marketing/production assistant, or Carmen, his accountant, will answer. Whomever, ask to talk to Barb and introduce yourself. She generally screens calls for Tom as far as incoming calls. http://lykosgroup.com/Eric, I forgot to mention that both of my sons were pushed my Barb and I go to college, Pete to get into international finance or international law; Tom got a full scholarship to Univ. of Mich. to become a doctor. He wanted to get into research to help devise/locate solutions for diseases that kill or debilitate kids. After two years, both decided they wanted to work with Dad, even after getting straight As in high school and college. Talk about a family crisis, but it worked out for both of them. They both love(d) our industry and people.
Edited 4/10/2005 3:33 pm ET by Sonny Lykos
Sonny : I see some parallels. My oldest finished a College Diploma in business, and I fully expected him to go off to accounting land somewhere. Maybe he will yet, but he brings some fresh ideas to the table, even though his basics in construction are lacking.
My second oldest worked since he was 14, every summer, and is as good a man as my highest paid foreman. He dropped out of 3rd yr Chemistry, just before Christmas, saying he couldn't stand the people in the classes. Got good grades all the way. I have been on his case to get into Civil Engineering, but for now he is onboard and giving it a shot, forcing the business to upgrade and re-invent itself.
The 3rd is just finishing 1st yr Kinesiology, and the 4th is finishing high school and rudderless for now, it seems.
For years ( all the kids lives anyway) I emphasized that the construction business was not a place to be, as a solid education will provide much better opportunities,but funny thing...here they are! I'm actually tickled to get to play with them on a daily basis, but business growth will have to be achieved to succeeed.
Thank-you for the personal info, much appreciated.
I find it funny that we who love doing what we do for a living, try to talk our kids into getting into anything but construction. Perhaps subconsciously we demean ourselves and our chosen careers.Chemistry for one son, eh? My brother Dr. Peter G. Lykos is a professor of chemistry at Illinois Institute of Technology in Chicago. He created "Fortran" or "Itran", (don't remember which one) computer language software for chemists.
Sonny : I've just been reading the SCA postings, great tool. Better than any in the toolbox. The dialogue was excellent ! Cheers.
Thanks, Eric. If you want any copies, let me know.
I suspect it had to be "Itran" as FORTRAN (which is an acronym for FORmula TRANslator and should be capitalized was created by engineer and technical types a long time ago (by computing standards).