Personal experience: how much builders in America get - ForumDaily
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Personal experience: how much do builders in America get

Blogger Nikolai Grigoriev wrote in Facebook based on personal experience post about how much builders in the United States earn, and also described how the system of conducting the construction business in America.

Фото: Depositphotos

Salaries

Construction wages in the United States range from $12/hour for helpers to $93/hour (construction public works, prevailing wage, coefficient 1,5 for overtime over 40 hours per week). There are a lot of projects going on for the government, for the military, where the minimum wage for, say, an electrician is $62 an hour. All workers naturally want to get to such a construction site. But there are also many private projects, for example Tesla Gigafactory, where, due to the frantic pace of work, the standard work schedule is 6 days a week, 10 hours a day. On such a project, qualified personnel are paid the first 40 hours per week at approximately $40 per hour, and the next 20 hours at a rate of 1,5, that is, $60 per hour. Total per month before taxes is about 11 dollars, after taxes - about ten thousand.

But this is at a private construction site, where the schedule is very tight and there is a severe shortage of people. On a typical construction site, skilled labor earns $40 for 40 hours per week, which is about $6 before taxes and about $700 after taxes per month. They deduct 5% of taxes from me because I have a large family, and about 650% from single people.

To get to this remuneration, you need to be a good worker, skillful, which is appreciated by colleagues and superiors.

There are also construction projects like Prevailing Wage and Davis-Bacon Act. On such construction sites, all wages per hour for each type of working profession are set by the US government, and are updated once a year. An electrician, say, makes about $62 an hour. Accordingly, all hours over 40 hours a week are another one and a half times more. Such workers earn more than top managers of many companies.

All Public Works (roads, bridges, city utilities, schools, government buildings, generation stations, water and sewer pumping, military infrastructure, etc.) are projects with controlled wages to workers. Therefore, they tend to be much more expensive than private projects. One example is the renovation of the UN building in New York, a project that cost more than $2,5 billion. And the lion's share of these expenses fell on labor costs.

There is currently a very high demand for labor in the US construction market. Companies cannot find people for their projects, people have simply run out, there is a construction boom. Therefore, the mechanisms of motivation, attitude towards employees, their training to increase their productivity - all this is given special attention.

In Chicago, an hour of work (up to 8 hours, then x1,5) costs 72-75 dollars.

Hours of operation

Almost all construction companies in the United States have the same work hours: on a construction site, everyone works from 6 a.m. to 14:30 p.m., and in the office from 7:00 a.m. to 17:00 p.m. Both there is a lot of extracurricular work, but at a construction site it is paid at a rate of 1,5, and in the office it is not.

I think that when a man finishes his working day at 14: 30, this greatly influences the entire socio-economic situation in the country. The second half of the day he can build a house, ride a motorcycle, spend time with his family. A lot of things can do. I think economists greatly underestimate the impact of this factor.

Project

Not a single project in the USA has a section on Civil Defense and Emergencies, and POS as well, energy efficiency, environmental protection, estimates, and other documentation.

As I have long suspected, all this is rubbish. And the design standards are spelled out in the Building Code. And there, too, there is no PIC, GOiCHS and OOS and all this nonsense.
Because the judicial system normally works to settle insurance claims between the parties to the conflict.

And estimates are made only by general contractors and their subcontractors, and they never show them to customers, because the contract price is solid.

And the Explanatory Note (in the USA called Specifications) - 1500 pages thick, with detailed instructions on which sockets to buy and which manufacturers is aimed mainly not at standards, but at correctly determining the client’s desires and the budget level of his project. So that the contractor can calculate the price as accurately as possible.

The composition of the project is described by the CSI 50-Division MasterFormat standard and almost repeats the licensing structure of construction contractors. That is, let's say, if our company is a Plumbing Contractor, then we open the Plumbing section of the project and the Plumbing section of the specification. And also a general project section (General) for all contractors and a general specification section (Division 1). And based on these four sections we calculate the project estimate.

In addition to federal standards, such as the National Electric Code, and state standards, such as California Title 24, there are special standards, for example, for the army, navy, and air forces, this is the UFC, for hospitals this is the Blue Book, and so on. People who are well aware of special standards in detail are highly valued, because these projects are very profitable, but without knowing the standard, it is easy to make a mistake of more than a million dollars. For example, if you do not know what specific conduits, pipes for power and telecommunication cables, are poured with concrete protection with reinforcement, on a project for a naval military base or airfield.

Almost all design codes are written by associations of contractors and licensed design engineers (IEEE, NECA, NFPA, ASME, ASCE, ASHRAE, UL, and two hundred others), based on a historical analysis of insurance claims and under pressure from insurance companies.

Фото: Depositphotos

Licenses

Building licenses in the United States are issued only to people, and only then they become attached to the company. Therefore, if such a person left the company, you need to get a new license for another person.

Such a person must successfully pass the 6 hours exam, 240 questions in it, half of the laws, half of the industry, for example, calculate the voltage drop in the feeder 360 feet long at 480V voltage, 260A current strength and 300MM feeder thickness.

To become a licensed design engineer (Professional Engineer), you need to pass two exams (one at the beginning of a career, immediately after university, the second through 4, a year of engineering practice), ten times more complicated than a construction license. With integrals, differential equations and calculations of stress diagrams.

Only such people sign each drawing and put their personal seal on it, not the company. The company simply puts its logo. If something is designed incorrectly and there will be an accident, this engineer will answer. For this, he has professional liability insurance.

In the US construction market there is a very deep specialization of contractors in their areas of work. If you look at the official license classification (Google “CSLB Licensing Classifications”), you will see 46 different licenses. Each has its own exam, its own separate procedure.

As a rule, contractors work only in their narrow specialization. General contractors hire subcontractors, fulfill a set of customer requirements for insurance, bonds, guarantees, and manage risks. Subcontractors, as a rule, deal with one or two licenses at most, and have a general contracting license in order to be able to hire a subcontractor in their work package. Those. for example, if I am an electrician, I will receive a license for general contracting only in order to be able to hire concrete workers who will flood the plates for transformers. Otherwise, if I do not have a license for general contracting, the client will have to hire them directly, and this is often very inconvenient, there are gaps in responsibility in determining those responsible for marriage and accidents.

Working in several completely different licenses is very inefficient, only very large companies can afford it, for example, the Emcor Group, which is run by financiers, and buy many companies around, carrying out their KPI from investors to increase turnover. Practice shows that it is much more efficient to choose a specialization, and work in your niche, continuously improving the quality of services to clients. For example, put the system of ventilation and air conditioning in different states.

In the oil and gas industry, construction licenses do not apply. There is a completely different system of classifications, permits and certifications, in no way attached to military and civilian construction. For example, all electrics are done without a license at all. But many other requirements, first of all, insurance for a large amount, which is very difficult to obtain.

Estimates

In the US, in the construction business there are no sellers. Every estimator is a seller. It depends on him on 70% whether the company will have a job tomorrow or not. It is he who is responsible for ensuring that the company wins a tender for construction, that not only an estimate be prepared, but also all the supporting documents for the tender. Huge responsibility and subtle skill.

The remaining 30% depend on the decisions of the owner of the company during the competition, as well as on the decisive meeting with the client with intensive coordination of its final requirements.

Each construction company maintains and updates its own price database, in which there are approximately 40 000 positions. Through 10-15, the years of operation of a database of different contractors are very different due to this customization, although at the beginning of the company’s formation, its owner simply buys a ready-made solution, such as Accubid, Conest, TurboBid or McCormick, with an integrated database of his association of contractors based on NECA). All these programs have On-Screen Take-Off, that is, you can remove all the data directly from the drawings in PDF format on the screen. Many companies hire programmers and write their own software (like Turner, for example).

Associations of contractors publish books of estimated prices every year, each in its own direction, for example, NECA publishes every year a book of labor costs for each type of work, according to which electronic databases of estimated prices from electrical contractors are immediately automatically updated, and services like “TraSer Accubid” automatically pull up this classifier of supplier prices via the Internet.

The estimate is a hundred times simpler and clearer than in Russia; any foreman will understand what’s what. It is designed according to a very simple principle: for example, the line “Socket 125V, 20A”: the socket costs three dollars, and installing it in the wall takes half an hour. All. No insanity with coefficients and indices, which is widespread in my homeland.

The estimate is intended to win the project, and since at the stage of competition and competition for the contract there is very little time for drawing up an estimate, all operations for its preparation must be as efficient as possible. An estimate for a project worth 20-30 million dollars is made in 5-10 working days, for a project worth 1-2 million - in one or two days.

Small companies make estimates, which, after winning a contract, can be safely sent to the supplier for packaging and delivery. In large companies, this is a two-step process: first, an estimate is made in general terms to take the contract, and then, if they win, they make a second estimate, already for the daily work on the project, for deliveries and for recording work time and materials.

As the project portfolio and company experience grows, daily adjustments are made to the database. In the database, and change the price of the material, and labor costs. This is not for fun, but is the result of painstaking work and disputes between estimators and production workers, after all, estimators must win the project, and production workers always come to complain that they don’t have enough money for construction. The eternal dichotomy of the construction business.

Project Manager

The project manager receives the project from the estimator who sold it to the client. From this point on, the two main tasks of the project manager are maintaining the construction schedule and maintaining the margin at the level specified in the estimate. Let's say, if the margin was 25%, and in the middle it became 24%, his bosses will start to grumble. If it falls to 10%, serious problems await him. If he falls even lower, he will be fired, and the market will be told that he was a fool. Therefore, managers resort to a variety of tricks, such as compensating for losses or stocking up reserves in the budget in advance. They themselves look for cheaper suppliers, they themselves optimize the project with an engineer and architect, they themselves conduct difficult negotiations with clients about change orders. Almost all of the profit problems lie in Labor's inefficiencies. Those. work force. Incorrect planning, incomplete supply of materials, worker downtime, strikes, accidents, defective rework, etc.

The most important type of document in a construction company is a table on one piece of paper, a comparison of the estimated and actual budgets for today, with a forecast of the project margin. The project manager updates this table. Once a week, after receiving a summary of man-hour costs from the construction site (time-sheets) and a certificate of money spent on the project for the week from the accounting department. The second document is the construction schedule.

A project manager is the most valuable and expensive asset of a company, who can easily earn 150 -000 thousand dollars a year, sometimes more. An adequate salary, considering that he is personally responsible for generating a net profit of more than three to five million dollars a year. I have not seen any business owners clearly understand this at any construction site in Russia. Usually they pay about 160-000 thousand rubles, this is a good option, which is around 200-350 thousand dollars a year. And this is on projects, including those with a budget of hundreds of millions of dollars, like Amethyst. In the USA, the project manager, in fact, reports to the entire company, everyone who does anything on his project. Except for the owner of the company. This is somehow clear to everyone without explanation. His time is more important than the time of any other employee. The position of project manager is approximately on par with the vice president. The entire process of the company is built around the Materials & Labor assembly line of several projects and making a profit from them.

Фото: Depositphotos

Employee Relations

In the US, it is not customary to be rude to colleagues, almost never. In general, swearing is not accepted, because many conflicts end in lawsuits, in which, as a rule, not an employee, but the company must prove that it behaved appropriately. A lawsuit with an employee could easily cost the company about 400 000 dollars. Therefore, do not swear, everyone smiles at each other, and behave very correctly. At the same time, smiles are sometimes obviously strained, but culture of education forces them.

I don’t know about other states, but California and Nevada have an “At Will” law, that is, “of their own free will.” It means that an employee can leave the company with 10 minutes' notice, and the company can fire the employee at any time with the same notice.

This law disciplines everyone quite strongly - both employees and the company. Company owners understand that they can lure away valuable personnel in no time, but a fool understands that they can fire him right this afternoon. Perfect market competition.

If a company hires too few people from minority groups, it can be sued for discrimination. Therefore, the composition of companies is very diverse, people from all over the world work.

The more you work in such a very DIVERSE environment, the more amazed you are how many smart people from all countries came to the USA. The more you understand how your perception of other races and cultures was inferior and arrogant. We have very cool guys from Colombia, the Philippines, Korea, Mexico, Dubai, there are guys from Russia, Belarus. They teach me everything they know, for which I am very grateful. And they know a lot of things. Many owned in their own countries their own companies, by 100-150 employees. Ten percent of employees are aimed at starting their own business, especially young people.

Before being hired, each employee is put through four main tests: a written test of understanding, logic, knowledge of English and the subject of work, then an interview with three or four senior employees of the company, then a mandatory medical drug test for everyone, and the last one is a Criminal Background check and DUI (driving under the influence of alcohol or drugs). This procedure more or less guarantees that the company will hire a good person.

Builder's Pledge

There is an amazing law in the USA, which is not in Russia, called Mechanics' Lien (Builder's Pledge). This is almost the only law that very strongly protects the contractor’s rights to receive money. According to this law, ANY of the contractors, subcontractors, any of the suppliers of equipment and materials, any of the WORKERS, architects, gardeners, socket outlets or faucets, mixers, etc. may impose a DEPOSIT on real estate if he has completed his work under the contract (design, construction, supply of materials, and other improvements), but he has not been paid (and it doesn’t matter who did not pay him).

This is a very powerful tool for getting money for your work.
If you worked, and you were not paid for the project, you register with Registrar (an analogue of Rosreestra) a pledge for the building along with the site, and you have the right to submit documents for the forced sale of this asset and the receipt of your money in 30 days. This security deposit may be imposed on the property at any time, even if the contractor did not receive an INTERIM payment under the contract on time. The deposit is unconditional, the consent of the property owner is not required.

Therefore, in the USA it is very rare to throw contractors and workers with payment by contract or salary (of course, for this they must submit the documents required by this law, for example, Preliminary Drawing, for example, withstand submission deadlines, etc.).

This law has the reverse side of the coin: if you are a homeowner and a contractor works for you, it is YOUR responsibility to ensure that all of its subcontractors and workers have received their money, otherwise your house could be FORCED sold by auction for debt size For example, 700 dollars for repairing a fence. For this, homeowners also have a whole set of tools, which they usually don’t realize.

About honesty

Honesty in business in the USA is not a spiritual and theoretical concept, as in Russia. It directly follows from the daily practices of marketing, production and project closure, is armed to the teeth and has advanced tools for mutual verification of counterparties.

For example, at the stage of competition for a project, when you are competing with two or three contractors of your specialization, at the stage of opening envelopes and announcing prices, it turns out that prices differ by 3-5%. The requirements for insurance and guarantees are general and the same for everyone. All budget databases are very similar, and are updated based on the results of competitions and competition for contracts. The winner of the tender, “Low Bidder,” not only wins the competition, his documentation is checked by the contractor who took second place, and has the right to appeal the results of the tender and cancel its results if he finds something to complain about. If you haven’t found it, sign this in the tender protocol (for expensive Public Works tenders, there are also closed competitions).

If the supplier appreciated the delivery of the package of materials to the contractor for the specification, and forgot something, he would have to swallow this loss in order to maintain a relationship with the contractor. If the contractor forgot to count something in his estimate and so won the tender, he will do this work at his own expense.

At the production stage of the work, Material Submittals and numerous inspections of local authorities cannot be avoided. That is, materials and quality of work are fully controlled. Any serious violation leads to huge fines and in the worst cases to Revoking the License. The whole history of serious violations is tied to a license and is available online for everyone, with the names and surnames of people, insurance coverage, etc.

The only time when additional work can be submitted is the release of new drawings from the architect and engineers (whoever disagrees will go to court). But at the same time, if you raise prices, the client will hire another company for this work. Loss of face and an inconvenient neighbor at your construction site. This means you need to maintain a balance, at what prices to do additional work, so that it is unprofitable for competitors to come out and work next to you. In fact, unit prices on change orders are approximately 40-60% higher, and usually there is not much additional work.

Salaries to workers are paid once a week, if you try to cheat with them, then your company will end its existence in four months. Not an option.

At the stage of closing a project of a company, it is very important to go out without any courts and with good relations with a client, because otherwise you can lose four to five years of life, communicating with lawyers instead of clients, and lose several million dollars. One of my acquaintances bankrupted his general contracting company because of a case on 2 million dollars (it was much cheaper to do than to continue working, because the project’s legal case grew like a snowball, he had to lay his house in the bank to pay the workers) mass phenomenon in construction.

Do not forget that the average American in the house is more than 5-7 units of various small arms, from pistols to sniper rifles and heavy machine guns. So with gross deception, living in the world becomes simply dangerous.

Thus, if everyone in the company honestly performs their duties and does not lie to the client and the authorities, then the company thrives and develops. Direct consequence, without need of someone to convince in the theories of psychoanalysis. Honesty is one of the main, massive financial variables in the equations of business optimization functions.

Фото: Depositphotos

Profit

A direct result of a superior section, talent, intelligence, quickness, connections, in a good sense of the manager's tricks and market conditions for any successful company is the achievement of the indicator of its main optimization function: the planned profit on the project.

Small companies (“Mommy & Daddy Shops”, as they are called in the US in local slang), earn 30-70% of profit on projects before tax, that is, according to the formula (price of all materials + wages of workers + cost of all subcontractors + price of use equipment) * (from 1,3 to 1,7). On average, about 1,5. After paying taxes and maintaining the office, about 25-30% remains. But the projects of such companies are small, up to 0,5 million dollars, and 90% of projects do not reach 50 thousand dollars. This type of construction company is classified as a Service Company.

Huge multi-billion dollar companies (like Skanska, Emcor, Jacobs) earn approximately 5% to 25% before taxes, depending on the project (same formula as above). I think an accurate estimate of the market average profit figure is around 15%. After paying taxes and maintaining the central office, about half remains, but if the company has a not too bloated staff and a smart accountant, and he is well versed in taxes, then more.

In bad times, when the market falls (as happened in 2007-2009), and many companies go bankrupt, the survivors work for 5% or less, simultaneously collecting the best pieces of the ruined ones. It comes to 0-1%, which makes a lot of sense, because once again you have to re-assemble the team after you fired, it’s incredibly difficult to hire anyone back. But in good times, when there are a lot of projects and people everywhere with fire not to be found, all (suppliers, subcontractors, general contractors) raise the bar for customers to 20-25% (big companies) and 50-70% (small companies) before tax, to accumulate fat until the next market fall. And the market pleases with its constancy and falls exactly once in 10 years.

Many companies in the construction market are 100-150 years old or more (for example, McCarthy, since 1864), so the evolution of pricing “how much does it cost to lay a brick on a brick” has come a long way, and the rules of the game for companies are exactly the same.

Here it is considered normal to bring your child with you to work and show him what you do, what you do at work. I see children in our office about once a month, sometimes they come in a big, cheerful crowd. It’s very funny to watch such processions at a construction site - there’s such a line of penguin chicks, helmets twice the size of their heads, orange vests almost reaching the ground, and everyone adjusting their safety glasses on their noses that they fall off and slide down. And the eyes look at the foreman in a way that cannot be expressed in words, sucking the world around him into the brain like a tornado.
My colleague has five children, he somehow six hours three of them explained how the work is done, what the company does.

Lots of interns. They are paid half as much (about $17-20 per hour), they work for three months during their university holidays, and during these three months the company monitors them, and they monitor the company. They still have two or three years to study, but they are already working.

Private

We bill the customer for equipment that is already in 5 months in stock, and for which we have given a lot of our money. Due to a hole in cash-flow, we cannot pay the same supplier for equipment to other facilities. On other objects, problems start slowly due to creeping deadlines.

The client writes to us that we have not installed the equipment in his building, and does not want to pay (under the contract, he pays for the installed). We begin to swear with him that he himself does not give us the opportunity to have a shutdown for 5 months already, and we ask for meetings. All the nerves, our say: the contract says shutdown, so give it to us. He writes to us that he can not shutdown, because he has about a dozen switchboards that he cannot turn off. No We are all mad and do not understand.

We're going to meet him. A huge medical center that is over 60 years old. An old Japanese man comes into our elevator, all white hair, smart, modest face with glasses, professorial eyes. It turns out. Busy people move quickly along the corridors, half-running, half-stepping, smiling through some subtle tension. We walk along the floors, talk, study the problem. I walk and snow-white beds with patients pass me. The patients have tired faces - it is clear that the old man is in pain, the mother has just given birth to a child, more and more different faces are passing by. Rich and poor.

We reach the shields.

They feed the heart of the complex - bright, blindingly clean, sterile surgical rooms and spaceship-like incubators for tiny premature babies who weigh 500-1500 grams, on which the technology of humanity is focused with all the power of intelligence. Oxygen, light, robots dispensing solutions, pulsating heartbeat lines on screens.

The client tells us quietly: “I can’t turn this off in any way. We’ll somehow figure out everything else, but this won’t work.” In 10 minutes we develop a scheme to switch these rooms to our generators and huge banks of backup batteries. We agree on where we will place them in the yard, through which balcony doors we will throw thick cables through which energy will flow into these small bodies and onto the tips of the surgeons’ scalpels. I thought - what are we doing? Why are we working? Why do we install equipment worth millions of dollars?
Why did the teachers teach us for decades? Why do we argue and swear?
And I have known Zen. That which cannot be expressed in words.

Love, like water poured out of my heart, rushed to the floors, spattered the walls of the corridors, and I went to draw a plan for the arrangement of the generators and the laying of cables.

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