Should you hire a driver who costs $5/hr more, but is 15% more productive?

Fact: More expensive staff can be cheaper.

Its actually more expensive to hire cheap - take a look at the chart below:


Plow/Salt Revenue: The experienced operator can produce 3K more in revenue than the inexperienced driver.

Labor Costs: The experienced operator costs 1K more than an inexperienced operator.

Equipment Costs: Stay the same.

Salt Costs: The experienced operator has higher salt costs because they are able to do more work.

Overhead Costs: Stay the same.

The answer to "Should you hire a driver who costs $5/hr more, but is 15% more productive?" is...

Yes, because the $5/hr more expensive driver is 6.5% more productive which increases profit. 

A simple way to track all of your snow operating costs is to use LMN's budgeting tool. The budgeting tool gives you the ability to build your own company budget, enter all of your costs & overhead, and generate your profit margin. An accurate budget leads to proper pricing and job costing for every single snow season.


Please sign in to leave a comment.