Canadian Contractor

John Bleasby   

The pros and cons of piece work

Canadian Contractor

Workers can benefit from higher earnings, contractors from higher profits

In some ways, you’re already be operating in a piece work basis. Consider how you quote a house or a renovation. Unless you work on a cost-plus basis, you likely calculate each individual element of the project as part of the whole. That’s like piece work. Your challenge as a business operator is to complete each element quickly and efficiently, thereby maximizing your profits.

Could you apply the same principle to the way you pay some of your employees and trades? Instead of paying on an hourly basis, would it be better for you and them if they were paid piece work too? Many of your outside trades and subs may already be doing this when they price their work to you as the contractor. Drywallers and painters come easily to mind; perhaps they look at a job in terms of board numbers or square footage.

Employers pay for what they get, employees might earn more
The big advantage for  employers is that they pay only for what is produced. When it comes to repetitive tasks like drywall, for example, this can be advantageous if work is paid on a per-sheet-installed basis. It can also be a great motivator for the employees. If they work harder and faster, they will earn more. The same might apply to painting home interiors.

Painting, drywall, perhaps even framing have potential for piece work payment versus hourly wages
(photo: John Bleasby)

Not as easy as it sounds
However, before jumping into payment by piece work, employers need to observe and record how long a particular task takes on average, and then match it to a piece work price. That way, improved efficiency and higher earnings can result when the task if completed more quickly. However, these must be easily repeatable and predictable tasks. It doens’t work for all.

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There are other important factors to consider as well. Workers will be penalized if matters beyond their control occur, a late material delivery for example. They won;t like that. There is also the long term impact of being focused on one task only; over time it could limit the skill development of the worker.

Supervision of the work must continue in order to ensure that all quality and safety protocols are observed. And most important of all, the issue of minimum wage, legislated breaks and overtime must be addressed. Setting the piece work rate below a level that worker could reasonable expect to earn in an hour, or over the course of a normal working day, would be in violation of most labour codes across the country.

Nevertheless, the piecework idea has gained some traction. Andru Ramker, president of Hawkeye Construction of South Florida in Safety Harbor, FL told the U.S. publication Construction Dive magazine, “If you’ve got the opportunity and have a well-defined scope [of work], piece work always makes sense.” Ramker explains that it allows the contractor to match his estimates with the actual costs paid out which, in the case of larger scale and repetitive builds, can keep productivity high and cost overruns to a minimum. Ramker has also observed a modification in the mindset of workers. “It’s all go, go, go,” he told Construction Dive. “They like it when they’re able to make more money.”

Worth consideration? Let us know what you think.

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