The National : THE NATIONAL Issue 2 2009
16 THE AUSTRALIAN NATIONAL DRYCLEANER & LAUNDERER, VOLUME 59 #2 2009 Trade Journals >2008 > Overtime. Or buy my book Labor Pains & Profit Drains at www.Xlibris.com/Bookstore or www.amazon.com and read pages 26 through 39. Regardless of your path, you aren’t going to read any- thing much different from “avoid overtime!” (You know me. I find a way to say that using 2000 addi- tional words.) A simple flowchart shows this. if you buy a machine that puts you on the cusp of overtime you put yourself in danger of drastically increasing you labor cost per shirt for life. A simple flowchart shows this – see illustration above. You can rework it with your own pay rates, hourly rates, and overtime rates, but the Principle is clear. I know that you’re probably a better manager than that and you would never let that happen, right? Well you are the anomaly. It happens everywhere else. Why flirt with disaster? Buy the correct machine! It will save you buckets of money in the long run. Remember, nothing is more expensive than labor. And you will pay off the machine eventually, but the cost of labor will go on forever! The logic is the same regardless of your volume. And if its close, err on the side of buying a bit heavy. Easy for me to say, right? It’s not my money. Well, actually, I treat your money like it is my money. In case you need a bit more convincing, let’s take a minute to look at the cost of equipment vs. the cost of, say, a lease payment. If a single buck cost $30,000 and a double buck costs $40,000, the lease payment for the double buck comes to about $215 more per month. ($860 v $645) That is less than $50 per week. For a $10 per hour employee getting overtime You’re a great manager and trainer, and Betty, your shirt presser, presses 50 shirts per hour. Life is grand – never any overtime! It’s May and the #%@&$*! boiler breaks down for 3 hours on Monday. You are backed up for the rest of the week. It’s Friday and Betty is still behind 3 hours. At noon she hits 40 hours for the week, but she is a trooper and finishes up. Betty and the two other people in the shirt depart- ment each put in 43 hours this week, which costs you 3 hours x3peoplex$10 x time and a half = $135. It’s never been a problem before, but now suddenly production is down and over time is a problem, regularly. (After all, who wants togiveupa$1perhourpay rise!) After the next payday, Betty and her co- workers are in an awfully good mood. That boiler breakdown that cost you $600 to fix also made a mess of your payroll costs somehow managed to give each of your staff members what mathematically comes to a one dollar an hour pay increase. It’s the raise, in fact, that you told them in February would never ever happen because you couldn’t afford it!
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