Labor around the Sawmill

[just_sawing]

I am in the process of increasing my work flow on my mill. I have always hired contract labor on the spot.
I am contenplating hiring a full time employee. I have gone to the TN state site and am blowed away by the amount of fees taxes forms and such. Do any of you who hire other than your personel relatives have full time employees. IF so how do you keep your sanity with the red tape?

[scsmith42]

My wife's small business uses a firm called "Paychex" to manage their payroll.  They take care of all of the taxes, appropriate forms, etc.

Although they charge a fee, she feels that it is more than worthwhile considering the time that it used to take her to manage payroll.

[Cedarman]

Yup, SS and medicaid taxes.  Unemployment taxes.  Workers comp. And the time it takes for you to do the paperwork.   Take what you are paying your employee and add another 50% and you will be close to your costs.  If you pay $10 per hour, you need for them to generate at least $20 worth of work or $160.00 per 8 hour day to justify hiring labor.  Probably more since your effieciency will go down for a while  when you train them.  If they break something you get to buy a new one too.

Makes you wonder why  people have employees doesn't it.  We have 5 now and had as many as 15.

scsmith42, we do the same thing with a different company.

[Banjo picker]

Get an accountant, its the only way to keep up with all the BS that rolls down from Wash.  Unless you are one or have one in the family.  Forms to fill out each quarter...etc..And if your late don't forget the penalties and intrest.  My ex. partner was going to do the books when we first got started.  It liked to have cost us everything.  Tim

[Kansas]

I do the weekly payroll on the computer. It costs about 280 dollars a year for the updated figures and such. There are 8 of us, so that isnt too bad on a per employee basis. However, I have an accountant fill out the quarterly reports from data off my payroll. I want someone independent of me doing that in case I ever get audited. Same with the workers comp audits.
The workers compensation is the worst part about only having a few employees. If your state is like kansas, you are likely to get put in a high risk pool for having only one employee, and where you are just entering the system. The owners can opt out of workers comp on themselves here. I know small business owners that were told by their agents they had to be covered too.
Take the time to call around and see if any agents out there can help.

One thing about it, judging by the calls I have gotten the last few months, its a lot easier to find help than it used to be.

[bull]

How big do you want to get?
Employees bring on all kinds of factors, push the pencil before you jump th gun... Workers comp will kill you, around 67 cents on the dollar paid for sawmills with under 5 employees, the owner does not count and neither do family members unless they are on the payroll !!!
I started small got up to 1 fulltime and 5 parttime employees, and was then assaulted with all the workers comp issues, went into it earning 45 cents on the dollar or 45 % with out employees, with employees. After comp and other insurance expenses were figured in I was earning *(losing)* 08 cents or -.08%. I regrouped tightened the belt, let everyone go and now work alone, and am back on the positive side of earning.....
There has to be a huge jump in income potential to entertain putting employees on the pay roll, with the present economic situation I woild ahre on the side of caution and spend all you time crunching numbers before you jump.....

[mike_van]

One of my cousins used to own two trucks. He drove one, hired a driver for the other. He used to tell me about the paper trail that went along with it all, I don't know how he kept up with it as long as he did. This tax, that permit, this form, and on & on. Good luck is all I can really say, the bureaucratic b.s. today is endless.

[WH_Conley]

I started a business that included me, my brother, wife and nephew. I grew to 11 employees later on. There is money in big or small, there is none in the middle. >:(

[bull]

WH i agree with that.... there is nothing in the middle

[Banjo picker]

WH i agree with that.... there is nothing in the middle

WH i agree with that.... there is nothing in the middle

I totally disagree, there is something in the middle.  Lots of money for the folks in Washington D.C.  ;D ;D ;D No offence guys but I couldn't resist.  You are totally correct.  Tim

[Meadows Miller]

Gday

Jsawing Ive been in both posititons haveing employes and haveing ppl on contract in the past Dad and I when we had the log building buisness had 3 employes plus ourselfs and it worked well as we had low imput costs but a high labour imput .
so far with the sawmilling ive kept the 2 partime employes on subcontract where I pay them between $22 and $30 per hour and they have to cover ther own costs such as Tax Insurance Super and other costs it makes things easyier for me with just having to pay a once of cost  ;D
In sawmilling the margins arnt that high and excees labour costs can start eating away at your bottom line pretty quick   thats when You have to start looking seriosly at good equipment selection and purchasing plans as sometimes Investing the money in gear that will increase production with the same labour imput or less can be the way to go As I know that id rather be paying gear of that makes my job easyier  than paying a blokes wages .
I dont know weather its just me but one other thing i dont like is how some employes Ive talked to  seem to me verry unappeciative of what the buisness owner is doing for them and seem to constantly WINGE  about how much the Boss is making out of them only taking into consideration the finnished price with out thinking about ALL the other imput costs thats why I dont want too many of them as it seems to get worse the more you have  ;) :D :D :D ;D
Besides Ive allready got a list aslong as my arm of proven top workers that are willing to leave other jobs to work for me  ;D I just gotta pick the right ones  ;) :D ;D
Ive allready got  two top proformers with me and dont ever want anymore than 6  ;) ;D 8)

Thats just my 2 bobs worth

Reguards Chris

[bandmiller2]

Is it possible to have an associate to work with you paid on a percentage of production and let him handle his own reporting??The more machinery you have to eliminate help the better,it will soon repay the expense.Frank C.

[Cedarman]

We pay about 8 cents on the dollar for workers comp for inside the mill employees and 6 cents for the loader driver yard man.  We have had a very good history of just one injury in the last 7 years and it was a finger tip smash.   

Does this discussion make anyone wonder why some mills have a lot of people that don't speak much English?  Or why paying under the table is going on.  Or why the Amish are heavy into the sawmill, pallet and woodworking business.

If I had all the money spent on insurance, I would be  a lot better off.

We operate our mulch business in Ok with son and DIL, no insurance costs for employees.  They do have their own health insurance though.

It is expensive to have employees.  There is just no way around it.  You have to have the extra revenue to support them.

Get with an accountant and find out all you have to do.  SHOP around for insurance.  Watch what classification they put them in.  Some have a lot better rate than others. 

[dewwood]

I have in the past looked into using a "Temp Agency" because they do all of the payroll and reporting as well as insurance and workers comp.  They are paid a single dollar per hour figure billed weekly and they then pay the workers and do all of the reporting.  Say you would pay $10 per hour to your employee then it will probably cost around $15 per hour to the agency but you only write one check and no paperwork.  As was stated above the paperwork is much the same for one employee as it is for ten when doing it your self so that one additional employee has to generally more than double your income and therefore your profit.

The only drawback to the temp agencies is some will not work with a "sawmill operation" due to the workmans comp.  If you can find one to work with you I feel for a small operation of one or two employees it is probably cheaper than doing it yourself.  You have to keep in mind that the more time you spend doing office work you are paying someone to replace you so doubling your workforce never doubles your output.

Good luck with your decision, or by the way I decided to go with no employees other than one part time.

[Kansas]

I used some employees from a temp agency for awhile. The problem is, even on the most rudimentary equipment, it takes some time to train them. Wether it is a popup saw, a resaw, or even pulling boards around the mill, you have to take the time concerning safety, quality, etc. Seems like every time we got a few trained, they would disappear and new ones would take their place. Most were pretty good employees, some were not. I think the good ones eventually go on and find full time jobs elsewhere. The fact we were 30 miles from the temp agencies didn't help-by the time you got done paying mileage, plus not always having someone with a drivers license willing to drive, made it pretty unreliable. I can see them having their place in a number of different settings, but I think you would be better off to invest in a decent local employee.

[Banjo picker]

I used some temps a couple of times on concrete jobs in the past, when We had short term jobs out of town and were short handed.  They were pretty much rent a drunks in constant training.  Finally got 2 decent workers, and I told them if they would show up every day for the remaining 2 weeks, I would give them an extra 250 each.  They did and I gave them the bonus.  But that is strickly against the temp service rules, but I kind of figured it was my business what I did with my money as long as the temp service got their money.

The state laws differ as to what you have to have as to worker comp.  Some let a business have up to 5 before its manditory.  But that doesn't let you off the hook if somebody gets hurt.  They get themselves a good laywer, and they will probably own most everything you have.

[DanG]

I'm not much of a businessman, which is readily obvious to anyone who has been here, : but I invested considerable cogitation in this subject along the way.  That, along with the wisdom that has been shared here, convinces me that you should explore every other option you have before assuming the role of an employer.  Is there any sort of equipment you could add that would speed up your solo operation?  Are their weapons in your current arsenal that could be used more effectively?  Are there things you can do to enhance your bottom line without increasing production?  Since you're set up to run solo, do you really have a place for a helper?

Remember, if you have an employee, you work for him just as much as he works for you.

Get a video camera and set it up on a tripod where it can film the entire work area.  I'll bet you can find a dozen ways to pick up speed while watching a 2 hour tape. ;)

[Brian_Rhoad]

As far as paper work for employees, the Quickbooks program I use has that built into the program. I don't have employees so I don't know how it works, but the program is there to use. I think if you use a program like Quickbooks it will speed up the paperwork part of having employees.

A sawmiller friend of mine told me you need to hire 3 employees to break even with the amount of work done to what they will cost you. He also said you can double the wage amount to get the total cost of an emplyee. That seems to hold out fromwhat others have told me also.

[rbarshaw]

Get a video camera and set it up on a tripod where it can film the entire work area.  I'll bet you can find a dozen ways to pick up speed while watching a 2 hour tape. ;)

It's also a good idea to have that camera recording full time while you have an employee working around the mill, 4 cameras would bee even better. You'd be suprised the things people will try to get away with, false claims for injury, theft, just sitting around and expecting to get paid for it.

[Meadows Miller]

Gday

Rbashaw thats one sure fire way to P@$s off good workers too mate One mill ive worked at a few times over the years Did that to 3  good blokes last year then when i went there earlyer this year i couldnt beleave it  Paul said wach this  mate  ;) he will be out within a minite  :D he sat on the docker outfeed while the other bloke reprogramed the docker settings and euge was out yelling why arnt you blokes F#$!n working  >:( I said to him that he realy needed to mount one in the office  ;) :D as your mum dose 80% of the book work mate  What are you doing in there all day ;) :D :D Honestly his 75yo dad dose twice the work he dose and Tonys only there for about half the day as hes got a bad back It was alot better before tony handed the mill over to his son when we all knew tony appeciated the amount of work we put in every day  ;D ;D 
4 blokes  7 to 10000bft dunnage docked stacked with about 2000 bft of grade sticked and stacked in the yard aswell as some other small house lots some days Not bad going I dont think  for 4 blokes an old man and a son you would only see if he had to be out there ;) :D ;D ;D
Like the boys and myself all ageed on was that Tony only came in each morning to make sure euge was there the sad thing is that He knows that as soon as he passes on that the place will be up for sale you could se the dissapointment writen allover his face sometimes  :'(
There is also only 1 bloke out of that crew working there now we all left within about 4 weeks of eachover  .I still talk with Tony on the phone and hes asked me to come back I said I work for you anytme mate but never again for your son

sorry for adding this but i think it needed to be said that ive seen that in action and dont think its the way to go

Reguards Chris

[Meadows Miller]

To get back on track  :D

Have you ever thought about Incentives for Your current crew  ??? as ive worked at places that have that in place and it worked well at increasing production tyed in with workflow and equipment improvements  ;) ;D

Chris

[bull]

paying by piece meal is one thing,but an hourly wage with and incentive is just another joke...
Work and get paid for what you do, the job pays X do it and you get paid, don't finish no pay....

[backwoods sawyer]

paying by piece meal is one thing,but an hourly wage with and incentive is just another joke...
Work and get paid for what you do, the job pays X do it and you get paid, don't finish no pay....

Incentive programs work in larger settings. I find that if I let the helper know what is expected for how much and give them specific task to complete it works good.

Example: I need the area around the mill cleaned up and it would take me 2 hours. I spend 10-15 min walking around with the helper to show them what and how I want it done, and he gets $20 when the job is done. I could care less if it takes him 2 hours or all day, what I care about is how well the job is done.

Hourly you are trying to find some one that will work as hard as you do. That is not always the case.

[Warren]

Get a video camera and set it up on a tripod where it can film the entire work area.  I'll bet you can find a dozen ways to pick up speed while watching a 2 hour tape. ;)

DanG, 

This is exactly what the Japanese do when they want to streamline a production process.  Before video cameras, they would take a new engineer out onto the shop floor and draw a chalk circle on the floor.  The new engineer was then required to stand in the circle and observe the manufacturing processes around him until he could identify at least one improvement to an existing process.

-w-

[Ron Wenrich]

Actually, wage and incentive for production is a pretty good deal for both employer and worker.  Line workers won't do anything extra if they are paid by the hour.  If you pay $X per hour, then when workers get to a point where they feel they have given $X for the services, their work slows.

You set the incentive to where you make money.  Then, workers get paid extra for extra work.  It actually works where labor costs are pretty steady on a per Mbf basis. 

When you have down time, or clean up time, labor costs can eat you up.  With an incentive system, down time isn't as expensive to the employer.  It also gives an incentive for workers to get back into a production mode.

It can work for both small and large operations.  Its just a matter of setting the threshold for the incentives to kick in.

You have to be very careful about using employees as private contractors.  If you are setting what time they have to show up and are directing them as to which tasks to perform, then you have to pay insurances and withhold all government taxes.