Cashed Up Tradies
READING THIS WON’T MAKE YOU RICH… but it might get you that step closer!
OK guys, have we got your attention?! A bunch of you got involved by commenting on yesterday’s post here, on Instagram, by DM and email – you raised some awesome points and questions, and we’ll share some of our favourites below. As promised, we’re going to run over the key problems we should all have with these “cashed up tradie” headlines, what the real situation looks like, and also the positives we can take from it, as individuals and as a trade, IF we’re smart about it… Heads up, this is a long read, but it’s well worth getting your head around – it could even make you some cold, hard cash.
The data these articles are based on was taken from 52,000 quotes provided from Service Central. 52,000 QUOTES. What does that mean? It’s possible that a bunch of these quotes won’t have been accepted or converted into actual work (yet we assume their prices will skew the overall results). Why might the quotes seem high? We’ve got a few ideas. They might not want or need the job (“if I win it at that price I’ll fit it in”). They may not have detailed information, or might overestimate their quote to cover potential variables. Perhaps their business model is to quote high and win a few, rather than doing more accurate quotes and winning more consistently. What we can say with a good level of confidence, is that an AVERAGE rate $58.55 an hour for a carpenter, or $66.17 for those doing “building & renovation” work, doesn’t seem like a true reflection of what’s actually happening out there.
Also, on that point, let’s take a closer look at the categories included on the so called “Rich List”: Building and Renovation – sounds pretty vague… who is that? What was included in their hourly rate? Which trades are under that banner and not in the trades listed specifically below? What is a chippy doing building and renovation classed as? Pretty confusing stuff.
2. Misleading the Public
The points in the article appear framed to pit the client (who might know better) up against the tradesperson, and it’s a pretty cheap shot. Many clients will trust the information they get thrown at them from the TV, newspapers, radio etc. without questioning it. After all, it was from a “recent study”, so it must be legit. Instead, they’ll begin to question your rate, presuming that whatever it is, it’s probably too high because, hey, it’s ridiculous that you’re charging more than a lawyer, right? Which brings us nicely to…
3. Unfair Comparisons
Firstly – “getting paid more than a lawyer” is a biiig stretch. Not only are they actually referring to a legal intern (this information of course hidden neatly away in the depths of the article), but one of our biggest gripes is that they’re comparing a contractor to an employee, which just doesn’t work.
While that legal intern may receive $37 per hour, we all know (as Mick and Sam taught us), their on-costs (e.g. Super, Insurances, Tax etc.) will be paid by their employer, so the true cost of the employee is higher than the hourly rate they take home. Do we think the legal intern is charged out to clients for a lowly $37 per hour? Not bloody likely.
A contracting tradesperson charging themselves out at even $45 per hour, we know is likely to actually take home just over $20, due to covering all these on-costs out of his own pocket. We’ve done the maths. Comparing a contractor to an employee makes less than zero sense. But hey, let’s not get bogged down in the details!!
So, the article is telling us that we’re getting paid $60 an hour, clearly a ridiculous amount for us lowly tradies. But then, they find a quote from a real builder, who is shocked when he has to pay his trades in excess of $45 an hour!! (Which, by the way, is generally closer to the mark for many chippies). THEN someone else posts a Service Central ad for tradesmen from $20 an hour!! Seriously, we’re confused already.. Can anyone explain how this adds up?!
While the rates for plumbers and sparkies seem about right, maybe even a bit on the low side, the figures for carpentry aren’t sitting right with us, or with you, by the sounds of it. The reality being that chippies’ rates have stayed pretty stubbornly in the $35-$50 range for a long time.
So… where to from here, you ask?
Firstly, let’s look at what’s actually happening. The very fact that this story is so out of whack with reality shows the real need for a strong body for our trade. Right now, chippies are not approaching rates in a consistent way across the board, and it’s having a negative effect on what the whole trade can charge out at. Undercutting isn’t just the guy down the road who found out your quote and knocked a couple of grand off – every one of us who doesn’t have a good grasp on costings and charges too low for work is a part of why rates are low, and have stayed that way for decades. To compare with our plumber and sparky mates, they’re together on their rates, and it’s working for them. Are we fed up with the situation right now? Yep. Are we going to be the first generation of chippies to deal with the rates issues once and for all? Absolutely. To do that, we have to be united as a trade, with a strong association backing us. We’re here guys – and we need you with us.
Lastly, and perhaps most interestingly… the rates listed in these articles are actually much closer to what we should be charging than what we actually are. At CA, you’ll all know we’re massive advocates for the importance of individuals working out their own rates (and we put a lot into supporting members to arrive at rates that work). But that said, we also know the fact is that a lot of guys are charging rates that are well under par, largely due to difficult market factors. When are we likely to get a better opportunity than now?? The market has been told that our base rate is $10-$15 higher (for private residential jobs) than it actually is… why not go with it?! There’s a lot of frustrating stuff in the media coverage of this topic, but if you look at it another way, we’ve got a golden opportunity here that’s not likely to come back in a hurry. Are you in?!