BAJR, IFA and Prospect... talking ??

[drpeterwardle]

While I disagree with virtually all the VOR says, I think he may have stumbled on a key problem. (In my defence I would say I have been costing archaeological projects for 17 years and I have seen quotes from about 30-40 units. I run my own business have employed staff etc. I know exactly how much such things cost (I should be doing my VAT return).

I would suggest that if you have to convince your bank manager as to the fact that your business is solvent than basically it is not. The banks are in a good position to judge if a business is profitable. Similarly cash flow is vitally important and many businesses fail because of it, therefore it simply has to be managed.

It you are borrowing large amounts of money the people who make the money are the banks, even with low interest, it is not you. Is the lack of a proper capital base for most archaeological businesses the reason that generally there is low profit for them ? (this is usually the case in business) ? and thus why diggers are paid badly.

Similarly are the businesses having a staff level to cope with peaks of demand rather than means or minimums. The figures I used were for a digger being charged out for 44 weeks which takes holiday, sick and idle time into account.

The ?14k a year I quote would cover all my own overheads including transport, stationery, equipment, my ?600 a year phone bill and even my hotel bills plus all the things consultants have to have like suits (a good suit costs 500 quid you know and the cost of having short smart hair mounts up to ?180 a year that?s 17p an hour of my charge rate as daft as it sounds, my new computer in contrast costs 12p an hour). It would also cover the rent etc on an office the same size as the one I have at home. Similarly paying the wages as an admin task is not worth mentioning. This costs about ?3 per month plus ?12 for all the tax statements etc (+45p in bank charges) that is 20p per day.

Voice of reason please therefore bore me to death ? what are the costs that are so great that profits cannot be made and the diggers paid well. I am far from convinced you or David are correct. Please do not include things that the client is charged for, and state where hidden profit is made such as on transport, uplift on sub-contractors or materials. Only include things that are paid for from the diggers charge out rate.

Peter Wardle

[BAJR Host]

I think Is hould have clarified that I expect that many of the things VOR shows as coming out of the Digger Pay Budget should have been costed separately ... however he is right to point out that the Unit does not pocket the whole difference as pure profit.

There is however a worry that although the cost to the client may go up (I am sure that there is an incremental rise per year) the pay for site staff does not go up by the same ammount ...

Until recently there was not even a payscale to adhere to!

VOR has valid points.. but so does Peter... only by discussions like this can we present a valid arguement for being taken seriously!

David

[drpeterwardle]

My point in a nutshell is this. Where does the money go - is it due to the inefficeincy of the business, the liability of the employer or profit. We have agreed it is not the third possibility which of the other two is it.

There are overheads, there is a cost to employing them other than the wages (btw safety boots, comfy ones in female sizes cost ?25 from macro and they do a nice line in HV poloshirts at ?15. Is that professional look of having the unit name on the HV or the logo on the Van neccessary?)

A digger is a digger who needs:
all h&S kit cost ?200.
a trowel ?20
a pick axe ?15
a shovel ?15
a spade ?45 (stainless steel)
mattock ?15
and similar

Each day they will consume (in cost to the developer terms which is charged separetly anyway)
10 context sheets 30p
Permatrace ?5
Ploybags for finds ?2

for example
They need on site a bog - about ?15 per day including cleaning
Mess facilities ?25 for that portacabin not each but for the whole project. (would it be cheaper/cost effective to send the diggers to a cafe and pay for their food rather than hiring a facility).

I could start to rant that it would be cheaper to send diggers to site in a taxi than the cost of the vehicle that is charged to the project. My last car cost me 12p a mile (including depreciation) to run and I was paid 32p per mile in expenses (when I was a proper archaeologist). I bought it new, a Volkswagen polo, to replace the BMW. My current car a honda civic has cost me ?200 in repairs in total and costs 16p per mile plus petrol and my clients are charged 40p per mile. (I have done a 100k miles in it).

On one real job (and if people from that unit are reading this I am not criticising) if one of the staff owned a car and was being paid the profitable mileage rate I quote but the developer was being charged the same the net effect would be ?2698.666667 increase in pay to a digger and the car owner would be in profit by ?500.

Hiring cars is very expensive.


Peter

[lucy78green]

quotebtw safety boots, comfy ones in female sizes cost ?25 from macro

I didn't know you could buy these! My last pair I had to buy myself and the local safetywear shop only did mens boots, so even though they had size 6 (the smallest) they're still too wide...... anyhow off topic....

Lucy

[Pete M]

A couple of random comments regarding economics...

Employees are a commodity, and are generally paid around one third of the charging out price, so ?150 per day chargeout = ?250 per week wages. This happens in all kinds of businesses. Just like a shop buying wholesale for 10p and retailing for 30p. Employees that don't understand this principle are destined to remain employees simply because they have no grasp of business. It is not greed, just the way things work.

Bad weather can be very expensive to cover - a couple of weeks of heavy can send a project into the red. Lazy, Hungover or incompetent employees can cost more then they earn, and there are plenty around (I just remembered one excavation where the (student) finds supervisors insisted that Eastings ran from right to left (even argued about it!)and cocked up the entire archive. Luckily I wasn't in charge). I've not heard of an employee saying 'You're right - I screwed up and will make good at my own expense', which is the position the boss or the company is in. So you train them - how is this paid for?

Administrators and others not actively earning money also get paid from this sum. These are often permanent staff members with pensions to pay for as well.

15K per year is about right for overheads where you work from home and don't employ full-time staff, but not enough to run an office with admin staff - you can double or even treble that amount.

As a matter of interest, how much are people paying for their professional indemnity?

Pete Muckle

[Invisible Digger]

Firstly I have to say that I have found the preceeding posts very interesting. I have some appreciation of 'business', but it is fascinating to see unit costs broken down. I think a number of you are right to suggest that many diggers do not fully understand these overheads. However there are a few points that are, I think, perhaps more pertinent to David's initial questions (These are my impressions from my research so I hope I am accurately representing diggers' views)

1) I don't believe that diggers genuinely feel that management are profit-skimming, but that they are fed up with bad business practice which seems to consistently under-cost jobs to win tenders - of course it is not always possible to accurately predict the final cost of a project, but if this is eating into any cash reserve/ surplus it makes it impossible to invest in improving wages for staff in the longer term and often is so bad it leads directly to redundancies. The consensus amongst diggers seems to be that the average newsagent could better run an archaeological unit than archaeologists promoted out of the field.

This leads directly into -
2) Is archaeology (and are archaeologists) really suited to a competitive, business environment? Without a strong Curatorial presence developers are encouraging units to cut as many corners as possible and too many units seem willing to do this. It is one thing to accept poor pay and conditions to do the job you love, but surely the final nail in the (diggers') coffin is not being allowed to do the job professionally and to the best of your ability!

So on to -
3) It is ESSENTIAL that there be a standardised quality of Curators. These are the people that should control (and prevent!) the worst excesses of some units, and ensure that developers respect the archaeological conditions placed upon their site. They should be independant of the business side and willing and able to stand up to offending units and developers. How many County Mounties seem to be academically sound, but with no appreciation of excavation? How many of them all too happy to settle for a quiet life making sure that no boats are rocked? In an ideal world a good Curator should of course be allowed to make sure that offending units are not permitted to work in his/ her locality, but this requires that the Curators themselves are answerable to some kind of regular review.

To answer some of David's other initial questions in brief-

-Pay or permanent work? If you are out of work for long periods then that is the main issue; if you are employed for longer periods then pay is the issue! Perhaps, as a profession, we should ensure that longer contracts are the norm before moving on to deal with pay ?

-Tax, hols, sick pay... I don't believe we can consider ourselves a 'profession' while people are employed without these basic considerations (or taken on as 'self-employed' to bypass the requirement). I believe it is far less prevalent than a few years ago thankfully, but needs to be addressed.

In conclusion. If diggers, units, developers, the IFA and Prospect etc etc are going to continue to refer to "Professional" archaeology then all concerned should be finding ways to ensure that people are employed on a *professional* basis, that units are run in a *professional* manner and that work can actually be undertaken *professionally*.

Anyway, climbing down off soap-box now... :-)

By the way David, in what way would you envisage BAJR *not* remaining independant? It is clear from discussions like this that your independance provides the only genuine leverage many diggers have left.

Paul Everill

[the invisible man]

This accords pretty much with other professions - I was in architecture for 30 years before my mid-life crisis led me to wonder what people did 2000 or more years ago. Worryngly though I am quite intrigued by archaeological project management.

If commercial archaeology tenders resemble construction in any way, I would expect site fixtures - bogs, hutting, fencing, welfare facilities (that means another hut) and plant to be indentified as what we call Preliminaries. Thus, if there a legitimate claim for extension of time to the contract, the additional costs are already identified.

Personal tools would not be. A tradesperson would be expected to provide their own specialist tools (and boots) - however stuff like mattocks and shovels would indeed come out of general overheads - the equivalent of the digger's rate.

However in construction an area of say brick wall is measured in the Bills and the tendering firms pice it per square metre. This rate includes all necessary labour. I presume that archaeological tenders similarly do not usually actually quote staff rates but such rates are used to calculate the price to dig a hole? In other words they are fixed price tenders?

I was interested in the point about weather. A construction firm can claim an extension of time for Exceptionaly Adverse Weather. Clearly this varies according to the time of year and location, and he has to allow for a reasonable amount of bad weather in his programme. If such provision is not made in archaeological contracts, perhaps it should be?

[drpeterwardle]

I regularly employ a bill of quantities approach to employing archaeologists but this is fairly rare. Most units cannot cope when I ask for a price per skeleton including post X or excavating a 1m ditch section on a field system.

Claims for inclement weather are not the norm on fixed proced contracts.

The tools and plant is costed as a separate item in effect as per builders preliminary and set up costs.

There is however little similarity otherwise.

BTW I am aware of the multipers for wages to charge out rates commonly used in business particularly for consultants. To use the construction industry comparison labourers or sub-contractors are not charged at three times there wages. An uplift of 10% is taken on sub-contractors.

It is a common mistake made in business to use things like the times three multiplier. What you charge is what the market will bear. What you earn is the profit you make. Profit is the difference between the costs and the income. Turnover is vanity (and so are charge out rates) profit is sanity.

People are now commonly treated as a commodity: I, for one, do not subscribe to this "modern" ethics of business. People are a business's most important asset .... and the means byu which you make a profit.

Similarly 15k overheads for somebody who has a home office (like I do - I prefer it - I have 250 square feet and I may extend this to 600 square feet it will cost me 10k) is extravagent to say the least.


Peter

[Pete M]

Maybe you don't include asset depreciation at 25%, or your needs are modest. We nearly ?25,000 of equipment (computers, printers, camera, surveying equipment etc), which account for ?5-6,000 of overheads before anything else is taken into account. So it does depend on the type of work you do. We've also got to extend PL and PI insurance to cover a minimum of 10 million for my next job, which will probably be 2-3K. There's 9K gone already.

We are not extravagent - my wife cuts my hair and I wear my brother's wedding suit, when needed, therefore saving nearly ?700 per year. We even swapped the Doberman watchdog for a couple of Jack Russels to reduce the feeding and vets bill.

As a matter of interest, what is your hire-out/wage ratio for employees, after you have costed it up?

I don't agree with costing excavations on a piece-work basis - does this earn you pay your diggers according to how many postholes they get through? There's probably a good reason why units struggle to quote on this basis.

I was not being cruel and inhumane when I suggested employees are a commodity - this was probably the wrong phrase (confusing with Marx as well). But they are contracted to supply labour/skills, to produce 'things' which are then exchanged for money.

Pete Muckle

Only joking about the dog.

[drpeterwardle]

I will reply on the archaeology as a business thread.

Peter