I need to tread carefully on this issue because there are myriad cut rate "landscaping" companies out there giving our profession a cheap, if not bad, name. As a homeowner it must be tempting to compare landscaping/gardening/lawn cutting companies based on price. However, there is really so much more landscaping clients should be thinking about. It's not as simple as comparing price if the lower priced company has no experience, faulty machinery, no liability insurance, no worker's compensation insurance, under the table employees and at the end of the year they go out of business because they haven't made enough money.
The hourly rate for gardening/landscaping services includes not only the employees' wages, but also 18% labour burden (the EI, CPP, provincial and federal taxes, worker's compensation insurance, 4% holiday pay) and it also should include statuatory holiday pay, some compensation for sick time and if you are lucky, some contribution to a medical insurance plan (though this is rare in the industry. If you need a root canal you are on your own!). Aside from the cost of labour, the hourly wage also includes vehicle expenses (huge in our industry) including lease or loan payments, fuel, insurance, maintenance on all vehicles and small tools, rent for office and tool storage space, accounting costs, insurance costs, office supplies, a computer and internet charges, cel phones, advertising and down time for employees, for example when the tools need maintenance, plants or hardware needs to be purchased or when they are travelling between job sites. Finally, a company is supposed to make a profit, though that is usually the last thing landscapers think of once the sun is shining, the grass and weeds are growing and everyone is working full out at whatever their quoted hourly rate may be.
If you look at how overhead and employee expenses fit in to the hourly wage, you can see it's a tight fit for the cheap rate companies. Caveat: I've recently done a workshop on costing and estimating, so these numbers are fresh in my head, and apply to my company. Other companies may have different costs to factor into their hourly rates, but I think it's safe to say that these numbers represent an average for a small Vancouver-based company, running two small crews, and may not consider all possible expenses.
Costs per day: $1042.40
4 employees wages: $547.50
Labour burden 18%: 98.55
Office/Rent/Computer: 25.70
Vehicles/tools: 151.00
Insurance/Permits: 55.65
Other Labour/sick/down 164.00
If you divide the cost per day by 30 (7.5 hours x 4 employees) -- 1042.40 /30 = $34.75
Consider the landscaping company who charges a $25/hour labour rate. Something isn't being looked after there if hourly costs to run the company are approximately $35/hour. It's likely the wages are extremely low, they employees young and inexperienced, they are probably paying their employees under the table to avoid taxes or they are sacrificing insurance, vehicle upkeep and tool quality. More likely, they are stealing tools to avoid that cost altogether. Tool theft is rampant in our industry. As the standards of running a business go down, so does the work being done. I think it's something any homeowner looking to hire a landscaping company should think about before choosing the lowest price.
On a more upbeat note, I was noticing the western native bleeding heart, dicentra formosa, is blooming away in forests and native gardens around Vancouver. It is a delicate beauty, with exotic looking blooms that really do look like bleeding hearts.
Native Western Bleeding Heart (Dicentra formosa)
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