Hourly Rates and Their Value for the Consumer
All of us are quoted an hourly rate for a vast range of services. A professional business evaluates an hourly charge out rate based on their operating costs (overheads), expertise and training and, of course, an acceptable profit. We all have the ability to do our homework to make sure we are getting value for money and, of course, the cheapest price.
This is where most people go wrong. Most reputable businesses are well aware that if they are not competitive with their hourly rate then in a short time they will have no customers. When shopping around you should find that these businesses are all within minimal dollars of each other. This figure we call an accepted market place price disregarding the rip off merchants
Most reputable businesses will not compromise on the required legalities to operate a business while we have cowboy operators working without, say, public liability insurance. This means disaster for the consumer if he damages your premises and does not have assets that you can sue for damages against, then you will have to pay for them out of your own pocket or claim on your insurance. If the operator is not qualified then your insurance company will reject your claim.
Then always you will find a business that will be twenty dollars cheaper than the accepted market price. A majority of people do not question why is this business cheaper they usually engage this business because they are convinced that they will save money.
What we need to ask when engaging a business based on an hourly rate charge is:
1. How much is your hourly rate?
2. Do you have the expertise to fix the problem?
3. And most importantly (sight unseen) an estimate of time to carry out the works?
4. Do you have the appropriate qualifications and current licences to perform the works?
5. Do you have public liability insurance?
6. Are you GST registered?
7. Do you have work cover insurance?
8. To work on 240-volt electrical appliances, do you have a restricted electrical licence?
9. Is the business workplace health and safety compliant?
All businesses usually have an expertise of works that they perform, it is of no value engaging a lawyer that specialises in property conveyance to act for you in a specialised criminal matter or engaging a general car mechanic to work on a diesel engine truck.
There are many scenarios that you must consider before taking the cheapest hourly rate.
As a plumbing contractor for 44 years and a plumber for 49 years (yes I have reached the old fart status but with lots of experience) let me give you some examples in the plumbing industry.
Plumbing has changed immensely over the last 15 to 20 years – we are seeing more electronics built into appliances and with the advent of technology, more comprehensive calculations are required in designing the right plant (like hot water, pool heating, etc) to make sure that what the customer requires will actually happen. Also importantly you must hold a restricted electrical licence to work on 240-volt equipment. Does your trades’ person have this qualification?
In our industry we have what we call “tap washer plumbers” (no disrespect meant) that, yes, are usually the cheapest hourly rate plumbers that are usually not bad at carrying out repairs on general plumbing items such as tap repairs and drain cleaning. Unfortunately people also engage these plumbers to look at more sophisticated plumbing issues. This is where the hourly rate has no value because of their lack of expertise or training.
A trained plumbing technician is called out to evaluate and repair say a modern Rinnai or Bosch hot-water heater that is full of electronics – the unskilled tap washer plumber usually calls around to other plumbers to find out how to fix the heater whereas the trained plumbing technician can usually evaluate and fix the problem reasonably quickly. The hourly rate now is of no value because the untrained will likely charge you for all of his wasted time while the trained plumber will most likely have the problem solved and fixed in minimal time saving you money.
Always insist on an itemised account, you can evaluate the persons labour time and be satisfied that you have received value.
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