35 Replies Latest reply on Mar 28, 2018 1:20 PM by Alex Lachance

    we were recently asked to provide a Cad designer...

    Tom Puttkammer

      we were recently asked to provide a Cad designer (me) to go to a different company and provide help creating drawings etc, this is a complety new thing for the company i work for to do. i was sent the SOW that has been signed, and i was very surprised what they are charging the other company, my question is, is it a normal thing for a company to charge roughly 5x more than what im getting paid to do something along these lines? hard for me not to feel like im getting taken advantage of.

        • Re: we were recently asked to provide a Cad designer...
          Rubén Rodolfo Balderrama

          I know what you're talking about, I'm aware of what is charged as a part-time designer and what they pay me per month ... there is a lot of difference, that leads you to think that at some point you should take a decision and work for your account.

           

          Good luck fella!

          • Re: we were recently asked to provide a Cad designer...
            Matt Lombard

            Depends. 2X - 3X is more common, but it depends on what sort of thing you are contracted to do. Training is more involved than just doing drawings or modeling simple parts. There may also be some overhead that doesn't involve you. There is of course travel, hotel, and food. It adds up.

            • Re: we were recently asked to provide a Cad designer...
              Glenn Schroeder

              I assume you're asking for opinions?  As long as you're getting paid what you agreed to work for, and going to the other company doesn't cause you any extra work or expense, then what your company is charging another company for your services is between those two companies.  I don't see where you're getting taken advantage of.

               

              If you'd like to have a discussion with your company about additional compensation because of your increased value, that's another subject.

              • Re: we were recently asked to provide a Cad designer...
                Tom Puttkammer

                they other company is close so no travel / hotel, but there is some training that i will be required to use their PDM system. i expressed my feeling of needing a raise for while im working there, and my management came back saying my year end review will reflect this work i am doing there. i feel like i should push back.

                  • Re: we were recently asked to provide a Cad designer...
                    Josh Brady

                    Their quoted cost may include some business considerations as well... I know that I've quoted things high before because they weren't really in the area of what my company wanted to do at the time... Almost a no-quote.  Also, if this is a new thing for your company to do, there may be additional administrative costs etc. baked in to set up whatever sort of billing or tracking or etc. to start this new activity.  How much you can push back probably depends on how much leverage you have.  If you do a good job the other company may be interested in hiring you on full-time...

                    • Re: we were recently asked to provide a Cad designer...
                      Rubén Rodolfo Balderrama

                      Learn everything you need ... and then after toke a decision, learning new tools serves yourself. At your time in another company they will value it better .... there where it seems that they do not value anything.

                      • Re: we were recently asked to provide a Cad designer...
                        Glenn Schroeder

                        Tom Puttkammer wrote:

                         

                        they other company is close so no travel / hotel, but there is some training that i will be required to use their PDM system. i expressed my feeling of needing a raise for while im working there, and my management came back saying my year end review will reflect this work i am doing there. i feel like i should push back.

                         

                        You do what you want, but since they said your year end review will reflect your additional work I'd personally leave it at that and keep going with a smile on my face, and not push back (unless you're prepared for them to decide your services are no longer required).

                         

                        If they fail to keep their promise regarding your year end review then that's a whole other issue.

                      • Re: we were recently asked to provide a Cad designer...
                        Tony Tieuli

                        Tom Puttkammer wrote:

                         

                        we were recently asked to provide a Cad designer (me) to go to a different company and provide help creating drawings etc, this is a complety new thing for the company i work for to do. i was sent the SOW that has been signed, and i was very surprised what they are charging the other company, my question is, is it a normal thing for a company to charge roughly 5x more than what im getting paid to do something along these lines? hard for me not to feel like im getting taken advantage of.

                        I completely agree with Glenn Schroeder. You're getting paid what you agreed to be paid.

                        Think about it. If you were in your own office doing what you normally do on a normal work day wouldn't your output be considerably more valuable to the company than your compensation? Otherwise why would they pay you? They're in business to make money.

                        Maybe you should start your own consulting business and then you would get to keep all the $$$.

                        • Re: we were recently asked to provide a Cad designer...
                          Matt Peneguy

                          Hmm... This is a touchy subject and you need to recognize it as such.  You are paid to provide a service to your employer.  What your employer worked out with another company is your employer's business.  I'm surprised that you were even made aware of how much money was being exchanged.  In my opinion, that really isn't your business (please don't take that the wrong way).

                          I really don't think you should be concerning yourself with how much money is being exchanged for your services.  No good can come of going down that rabbit hole.  But, to give you a little better understanding of what may be going on:  Your employer is selling your service to another company.  Well, is he also having someone do the work you were doing at the office?  See where I'm going there?  If the other company was in a bind and offered to pay for your services x2 to get you to come over to also pay to have someone work your normal slot, that's their business (even if no one is covering for you, that work needs to get done).  Now here's the other thing to consider, when you consider your paycheck, did you know your employer may be paying roughly 2x your salary when you consider healthcare benefits, SS, medicare, etc?  Now think that over a little more and you'll see that number may not be that exorbitant.

                          • Re: we were recently asked to provide a Cad designer...
                            Tom Puttkammer

                            thanks for everyones incite, its always good for me to look at the different perspectives, the year end review is around june, so i will see what comes of that.

                            • Re: we were recently asked to provide a Cad designer...
                              Paul Risley

                              I work for a company that I am involved in the quoting and outsourcing prices on a regular basis.

                               

                              The factors behind a cost to an outside business as you describe can be summed up different ways.

                               

                              At the base of it all is what is it worth to your company to contract to this outside company? When we enter into a contract with an outside company, we design FOR them, our base rate is 3-4 times the salary of an average designer. There are other factors involved as well and the contract has to be spelled out.

                               

                              There are always other factors in what it costs a company to do business with other companies. What kind of benefits do you have? What liability will your company incur if you don't perform to this other companies standards? What if you quit mid project and they have to bring in another designer who has to be trained and brought up to speed.

                               

                              I have worked for a contract design firm before and seen all of this play out before. The thing to keep in mind is your company is accepting all liability for anything that goes wrong, otherwise you would be an independent contractor getting the full sum, but also bearing the responsibility for any and all problems that arise.

                               

                              I would take the job and gain as much experience as I could. There is no substitute for additional knowledge. In this case your company is paying you to learn take advantage of that.

                               

                              Just my 2 pennies worth.

                              • Re: we were recently asked to provide a Cad designer...
                                J. Mather

                                How much value are you contributing to your company - presumably more than they are paying you.

                                If I get paid $100 a week, the company should be getting a value from my work greater than $100.

                                 

                                And salary is only one component.

                                Have you considered your total compensation - including insurance....

                                • Re: we were recently asked to provide a Cad designer...
                                  Rick McDonald

                                  Tom,

                                  There are many good reasons that you Salary and what the other company is paying is considerably different as many of the previous posts have pointed out.

                                  When I do travel for installations or training, my company charges much more than my salary for my time - plus expenses.

                                  Even if someone else is not being brought in to do your job, your employer is being delayed on ALL your projects by the time you are away and that can be costly to them.

                                  As has been said, they still have to pay all your benefits so they are going to pass that along to the other company.

                                   

                                  You have already brought it up to your employer and, in my opinion, you should drop it until your review and see if it has been included.  If it has not at that time, that would be the time to bring it up - but this also depends on how well the company that you are doing the contract work likes what you have done.  If they praise you - be sure that is reflected in your review. If they don't praise you or if there are problems, you are better leaving it alone.  At least wait until the project is done.

                                  If this happens again in the future, and the other company is happy, be sure to remind your employer before your review of your job done well for that company - but best not to talk $$ for compensation in advance because you are still getting paid at your expected salary that you agreed to.  If you don't get a raise, then you have the opportunity to remind them how you made them money for a job well done.

                                  • Re: we were recently asked to provide a Cad designer...
                                    Christian Chu

                                    It's time to ask for a raise ?

                                    • Re: we were recently asked to provide a Cad designer...
                                      Dan Pihlaja

                                      Their cost to the company will include the cost of your base pay + insurance costs + other type of costs that the company pays on your behalf + a nice hefty profit margin. (probably 100% markup at least)

                                      • Re: we were recently asked to provide a Cad designer...
                                        Tom Puttkammer

                                        i understand they are compensating for possible work that i could be doing at the "home" company, as of right now im not having any insurance through this company, im just new to this situation and i gotta wrap my head around the whole thing

                                          • Re: we were recently asked to provide a Cad designer...
                                            J. Mather

                                            , Tom Puttkammer wrote:

                                            .. as of right now im not having any insurance through this company, ...

                                            Your current employer?  Or the contracted work?

                                             

                                            Does someone get paid at your company to generate these business contacts, and contracts for hire?  Where does their salary come from?

                                            Does someone get paid to keep track of your work and cut a check for your pay?  Where does their salary come from?

                                             

                                            Is your company required to pay unemployment compensation insurance?  Workers injury insurance?  Retirement (SS or other)?

                                            Even if you are not covered by health/life insurance, my guess is that the company is paying government mandated insurances that you would not normally pay attention to unless it was coming directly out of your pocket.

                                             

                                            Do the co-workers who provide the support above work in climate controlled office (heat at a minimum) with lights, phone....?

                                            Many of your co-workers might be pure overhead needed as support such that your work function can be accomplished.

                                          • Re: we were recently asked to provide a Cad designer...
                                            Tom Puttkammer

                                            it does seem very unfair but i am only seeing the tip of the iceberg, we shall see at my review if it reflects how i feel

                                            • Re: we were recently asked to provide a Cad designer...
                                              Christian Chu

                                              Beside the salary you get from your company, other things like overhead, insurance, training ect they have invested on you for years, now it's time for the company to get it back !!!

                                                • Re: we were recently asked to provide a Cad designer...
                                                  David Matula

                                                  5x times what your getting paid by the hour vs how much it actually cost the company to keep you employed. 

                                                  Benefits are not what one usually thinks about as being part of their income.

                                                  other cost incurred by companies are things like unemployment insurance, workers compensation insurance ect...

                                                   

                                                  So yes it may seem like a lot that they are making off of your hourly rate but how much of it is profit for them?  not as much as you think.

                                                   

                                                  There are people that take risk and those that don't.  The owners are risk takers investing lots of $$$$ to give us a place to work and all the equipment that we use to do that work.  The employee is usually not a risk taker willing to settle for a "secure" place of employment with a steady income.  One boss said that if we are not making him money why keep the business going.  It did not last much longer once we lost the account that we were working for, but billable hours where what it was all about.  99.9% efficiency is what he was looking for.  Your on the clock you better be making him $$$.

                                                  So if you look at any JOB (Just over Broke) is what I like to call jobs this is what it is all about trading your time and talents for a little $$$ to make some one else $$$$ so they can afford to pay you and live. 

                                                • Re: we were recently asked to provide a Cad designer...
                                                  Doug Seibel

                                                  Overhead.

                                                   

                                                  The company paids for the software, building, heat/ac, taxes, software subscription...not to mention basic management/sales/secretarial/HR/insurance (good grief, insurance is mammoth money-sucking hole) and whatever other overhead costs...plus some decent profit margin so they actually make money after you, the executives, the secretaries, the software companies, the city/state/federal government, and all the other countless fingers in the cookie jar have made their profits.

                                                   

                                                  Overhead...it's a LOT bigger than you realize.

                                                  • Re: we were recently asked to provide a Cad designer...
                                                    Sebastyon Champion

                                                    As a business owner, i can tell you automatically you have 66% more in taxes per employee. so a $20 per hour employee cost about $80 per hour after taxes and insurance.  Thats not including my building and utilities.  Software alone is close to $20,000 a year.  5x your salary sounds like a bit much, but i have over bid projects so i could get out of them and won the bid.  Made good money for it but it was a headache and in the end it wasn't a good project to take on. 

                                                      • Re: we were recently asked to provide a Cad designer...
                                                        Christian Chu

                                                        Not sure where you're located, just assume somewhere is Eastcoast,

                                                        just sending 3 or 4 to SWW in LA would cost you another $20,000 easily ...

                                                        • Re: we were recently asked to provide a Cad designer...
                                                          Paul Risley

                                                          Taking your $20/ hour and factoring in software/computer etc the actual cost per workstation for a 2080 hour year is on the range of $30-$35. This includes basic IT support over the course of 1 year and does not include accessories like keyboard, mouse, printer or any consumables.

                                                           

                                                          This is just one of many as I am sure you know as a business owner. I run my own business on the side, well a couple of them actually and the overhead costs are definitely there and you see them in your ledger every month even if you don't see them every day.

                                                           

                                                          Everyone thinks of health insurance as the killer, I would say workman's comp is definitely a hindrance especially if you are a smaller facility. 1 accident against 20 employees has a bigger impact than 1 accident against 100 employees.

                                                           

                                                          I know it is easy to see that your employer charged $100/hour for your time and are only paying you $20/hour, and you think sheesh I am not getting paid enough. I have been there and done that. After all of these years part of me still thinks I am getting the short end of the stick. After being in operational management and ROI assessment, I can tell you there are alot of small things that make a huge impact on day to day operations.

                                                            • Re: we were recently asked to provide a Cad designer...
                                                              Sebastyon Champion

                                                              You are exactly right! That also doesnt include employee screw ups, theft, and Machines deciding that all week is going to be a Monday.  I work 7 days a week with very little time to myself, believe me its not as profitable as it sounds, I've had jobs that i should have made around $5k profit that i ended up paying to do the job because an employee didn't pay attention, or the project got damaged during the build process.  I have to factor those cost across the board and get my money back somewhere.  On top of that everytime you turn around you have to upgrade equipment, $$$ isnt enough.  you gotta have $$$$$$$$$$$$$$$$$$$  to keep up with the times.  My suggestion is ask for a bonus not a raise.  I give bonuses all the time, rarely raises.  my reasoning is you may have been awesome on this job and completely screw the pooch on the next.  I can't afford to pay a higher rate unless the success ratio is 100:1 when in reality all project are going to have mishaps which makes the ratio closer to 20:1.  My guys never complain about pay, I usually just add a couple $100 dollars to paychecks when the business has had an exceptional month, (which is about every other month.)

                                                                • Re: we were recently asked to provide a Cad designer...
                                                                  Christian Chu

                                                                  is it a good idea of working with contractors or hiring permanent employee?

                                                                    • Re: we were recently asked to provide a Cad designer...
                                                                      Sebastyon Champion

                                                                      well for the hiring process i always use a employment company.  That way i don't have to pay taxes, insurance, or workers comp.  it allows me to assess the employee without having the burden of HR paperwork.  After 90 days i hire full time,  to me it gives my employees a sense of security.  Also its easier to deal with employees directly when it comes to time off, sick days, etc.  Giving that it does cost more for a permanent i prefer it.  Contractor employees can easily steal, trash or otherwise hurt your business for no reason with literally no consequences.  I depend on my employees just like they depend on me.  When taking on a permanent employee you have to remember you are also taking on a family.   They might children and a wife.  It's my responsibility as their employer to keep work available to them to feed their families.  I have a fairly low turn over rate, but i also don't babysit.  I manage my business standing next to my workers most of the time.  It's difficult to own any business now, and finding employees who actually care about their work is even harder.

                                                                        • Re: we were recently asked to provide a Cad designer...
                                                                          David Matula

                                                                          difficult to find employees I believe.  Some want $100 an hour and they don't know crap about anything yet.  then they don't give a darn about anything, tearing up stuff and costing the company $$$.  Every extra $ the boss has to spend on replacing this or that is an extra $ that comes out of the raise pool, or a Sebastion does it the bonus pool.  It took a while for me to learn what working for someone besides family was about.  Scheduled time of work does not mean anything, if your needed or if someone does not show up and the work needs to be done your there get it done.  That is not my job does not work unless your in a union.  Being the owner is more than just signing the checks. There are your customers, and your employees that your constantly worried about in the good time and in the lean times.  

                                                                • Re: we were recently asked to provide a Cad designer...
                                                                  Alex Lachance

                                                                  I'd say it is rather normal because you do not see all the expenses that come along with employing you.

                                                                   

                                                                  I think Sebastyon Champion explains it rather well.


                                                                  If it makes you feel any better, I am about to do basically the same thing as you. This will be the second time I do so.

                                                                   

                                                                  The first time, I had an 11 hour drive to get to the shop that was bought by the company that owns us. The plan was to draw as much of their parts and products as possible and bring back as much of their knowledge as I could. Every hour of overtime was paid in x2(which is also something that isn't often taken in concideration). The only thing that sucked was that they ended up ''cutting a deal'' to save on paying the big price for the drive to and back.

                                                                   

                                                                  This time, I'm leaving this monday to go to the same shop. I believe I will be drawing a bit more of their parts but I will mainly be helping them realign their production and understand how our drawings work as the shop is still in the mindset of the 80's. The knowledge is inside the shop and when the welders will retire, that knowledge will be lost. My job is to make sure none of the knowledge is lost.

                                                                   

                                                                  There is a lot of reticence towards change. This shop is used to working with basically no drawing at all. Just imagine their reaction when we sent them a pile of 300 drawings to produce their trailers.


                                                                  Gonna be a fun challenge