When it comes to figuring out how much you should pay your lawn care employees, there is a sweet spot. Pay too much and you are going to lose money on each lawn mowing you perform. Pay too little and either you won’t attract any applicants or you will attract the wrong kind of applicant. But where is that sweet spot and how do you find it? That is what one lawn care business owner was interested in knowing when he wrote us on the Gopher Lawn Care Business Forum.
He asked “does anyone have any suggestions as to how to determine the hourly wage I should be paying for labor? The labor I’m looking to hire is for lawn care only, no landscaping. I’m looking at the idea of hiring some help and trying to come up with the right number. I obviously don’t want to pay more than I need to, but I want it to be fair and attractive to a good employee.
At this point, I’ve got one person I’m talking with that would be working for me using my equipment. While I’ve got another guy I’m talking with that would be working for me that would be using his own equipment. Both individuals would be working on their own.
While I fully plan on growing the business, my plan right now is that these guys will be doing all of the work for me. At this point, I’ve got a full time job I need to pay my bills, but I hope to move into the lawn business full time as soon as possible.
Any thoughts/ formulas/ suggestions if I were to hire the employee that would be using his own equipment or if I were to hire an employee that would be using my equipment?
Also, should I be paying employees by the hour or by the job?”
A second lawn care business owner said “first off let me say, you need to be really careful how you go about all this. I can for see a lot of trouble depending on the path you take. I’d advise against ‘hiring’ an employee that uses their own equipment because that would probably not sit well with the I.R.S. if there was a complaint made by that employee to them. Technically an employee uses company equipment. When they use their own equipment, it would seem they were more sub-contractors. So investigate that further before you make your final decision. Also, I can almost guarantee you are going to run into trouble if you think you can hire some employees to run your company while you work a full time job. Employees need constant monitoring and management or problems will occur.
Beyond all that, I would hire somebody initially to just trim and blow off the grass while they worked with you. Then as your business grows, hire another to trim and blow off and start teaching the first guy to mow and use more expensive mowing equipment.
I pay my employees by the hour. If you were going to have the person use your equipment I would pay them around $12/$13 per hour. If the person is going to be using their equipment, I would pay a percentage of each yard like 25-30% so they could take care of expenses like maintenance or gas. But I would rather have someone using my equipment. That way they can’t say well this is my equipment I am doing all the work and then they take your customers. But the choice is yours to decide.
If they were working with me everyday and just trimming and blowing off, I’d pay anywhere from $8-$10 per hour depending on the quality of work they do, their reliability, and those sort of things. That is starting pay of course. As time goes by, I would give raises when they earned it. Probably $.50 cents or a dollar at a time. I also pay my employees a $50 bonus for bringing in a new residential lawn care account.
Even though I am with them almost always on jobs, I give them business cards for after hours. If they hear of, or meet someone wanting a service we offer, they can give them a business card.”
A third added “that’s my one of biggest struggles right now. I want to offer a fair wage, but of course maximize my profit as well. To figure out the right price for your area, you should find what your competitors are paying. In my area, they are paying anywhere from $8 to $11 for general labor, with crew leaders making around $12.
I have two guys who have been with me less than a year and they make $9 and $9.50 respectively. Anyways, make sure you pay your guys a respectable wage, make them earn their raises, and make sure it’s a wage you can afford. Also, don’t forget when you’re budgeting to include payroll taxes. If you take you your employees hourly wage and multiply it by 1.35 that is what that employee will be costing you per hour.”
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