Travel and accommodation expenses
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It's really about making people pay for what things cost. That same person not traveling is still $1500/day but they get to go home at night and see their family.
When traveling they spend a lot of non-billable time shuffling around. Making them pay extra to get to do it makes it worse still.
The advantage of time + expenses is that the expenses vary based on the customer's location decisions. If you are in London they will be high. If you are Detroit they are low.
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I understand what you are saying, but it is not uncommon. Since many of these consultants may do work in different areas of the country, this allows them to simplify their quote for their services instead of giving your a flat rate. Either way, it would be the same if they said the cost is $2100/day. Also, since food/travel/expenses are probably going to be less averaged per day if they work 2 or more days, this actually works in your favor instead of the $2100/day listed above.
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I agree with Denis. It's a nice way of tying what you pay to what it costs to deliver the service.
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We charge clients on for travel based on the following:
If client is within 5 hours it is based on 2 hours of travel plus work day.If client is within 8 hours we do check out train or car rental to arrive onsite versus flight etc. Always go with the cheapest option for client.
Anything over 8 hours is:
Flight (actual cost)
Car Rental (actual cost) plus mileage (we estimate this ahead of time and add 10% padding)
Hotel (actual cost): Always pick one with full breakfast - we have had clients take care of this reservation because they have discounts or points etc.
Food Per day: $45 for 2 meals (any meals planned on by client or covered by them such as lunch etc. is deducted from this amount). This also doesn't cover the cost of any alcohol for our employee. -
And the alcohol is a big chunk of the costs.
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We charge standard IRS milage for anything more than an hour out. We do not charge time for travel.
If our client workload changes, we are prepared to revisit this process tough.
Currently none of our non local clients (Central Kansas and Northern Arkansas) are close enough to non-stop destinations from STL to make flying a reasonable use of time. They are close enough that driving makes more sense as long as the trip is more than a day or two.
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@DenisKelley said:
I understand what you are saying, but it is not uncommon.
I know. I realise I may be being unreasonable. It just bugs me. I had a meeting with someone I'd never done business with before who was quoting 70 days of consultancy at $1500 per pay plus expenses. Half-an-hour into the meeting and he was discussing what kind of hotel they like to stay at. Their office is 58 miles away. It just annoyed me. OK, they're unlikely to actually stay over anyway (who would when you're less than 60 miles from home?), but then why did he mention it? And the mileage is only 50 bucks, but it's the principle of the thing.
I have more sympathy for a one-man band consultant charging $1000 a day. He's trying to keep his overheads low, and to a degree he's passing those cost savings on to me. But this was for a massive organisation employing hundreds of people. I don't think it would be unreasonable to assume they can absorb a few nights in a hotel.
I hope I don't sound too harsh. I've been told by a few different consultants that I'm one of the kindest people to work for. I've heard stories of consultants being treated like servants, and it's far from that when you work here.
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I personally think the company hiring the consultant should pay for hotel and some part of the travel. Though I'm not sure I'll allow them to pick the hotel carte blanche. In some place like Nebraska, you might agree to $80/night, while in New York you might have to agree to something like $299/night - that part will depend on the location.
I think the company should pay this because it's outside the costs that the employee/company would have to pay if they were local.
When it comes to the travel you could look at two options, actual cost - which could be state allowed mileage or cost of a rental car plus fuel, or pay a reduced driving time rate (though this might be a hard sell).
In your case where they are 58 miles away, you might tell them that you want it expressly written that you will not cover a hotel because they should be driving to and fro.
The next question though - how many hours do you get for the $1500? Is that a straight 9 hour day with a 1 hour lunch? Or is it more like a 12 hour day?
If it's on the 12 hour side, paying for the hotel might be worthwhile for you as it will take fewer 12 hour days (hopefully) than 9 hour days and you'll save in the end.
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12 hours?! Is that normal in the US? I'm in the UK, and I'd say 7 hours is the norm, or even less. They normally arrive around 9.30, 30 minutes for lunch (though the majority will skip lunch and survive on a diet of coffee and chocolate), and then leave around 4.30. Things sometimes take longer than planned and I'd expect them to stay, but it's rare anyone will stay past 6.
On a Friday, if its a simple job, I'll often finish it for them and let them leave at 4 or even earlier to avoid the traffic. I may be a soft touch.
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58 miles away and they want a hotel and to be a pain about what type of hotel? Stop right now and find someone else. That is them ripping you off!
Like I said over 5 hours and we don't do the hotel thing (of course unless there is multiple days on site) but even then we talk to the customer and generally they are the one selecting the hotel. They know their area better then we do after all. We only have 2 requests that it has free internet access and breakfast.
Also as a general rule if we have a multi day onsite that my Engineer/Tech has to stay in a hotel for they are working 12 or 14 hour days. Hourly rate applies. Flat rate fees make everyone nervous.
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All the consultants we use are less than 3 hours drive away from here. It's a small country and we're located in the middle of it.
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Aww yes, forgot you're not in the US.
Yes 12 hours days. Granted those types of days are rarely at a flat rate as someone usually gets screwed on that type of deal.
You said $1500, is that the converted BRP cost? Depending on the work, that's a fairly number I hear in the states for a full day of onsite support (plus expenses).
Wow, you guys only work 7 hours a day? I sincerely wonder how European countries are able to compete when the work shifts appear to be so much shorter than the US.
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@Carnival-Boy said:
All the consultants we use are less than 3 hours drive away from here. It's a small country and we're located in the middle of it.
For 3 hours, if it's a single day, 12 hours or less onsite - no need for a hotel room. But really once you get close to that 12 hours it probably starts getting dangerous to drive home, so I'll be more than willing to flip for the room.
If it's multiple days, absolutely there would be a hotel involved.
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@Dashrender said:
Wow, you guys only work 7 hours a day? I sincerely wonder how European countries are able to compete when the work shifts appear to be so much shorter than the US.
It's a good question. Although I don't know how you guys stay productive and don't burnout working 12 hour shifts. After a few 12 hour days I'm always knackered and need a rest!
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I can't speak for Scott, But I don't think most IT personal work 12 hour days, 9-10 is probably more common.
If you're a consultant (again not Scott), you might work 12 hour days for the duration of a project (particularly onsite) but not forever, you'll more than likely have some downtime between engagements.
Typical office jobs are 8 hour days, not 7.
Since your IT jobs are 7 hour days, what is the normal officer worker day like? How about manufacturing job? or construction?
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Do you mean actual productive hours or hours we are physically in the office? Consultants tend to do less chatting and general messing around, so are here for fewer hours but get more work done than normal office workers. Their days are normally fairly intense. Most of the ones I know work weekends as well, so very little downtime.
For general office workers, in the UK we're in the office for longer than the French and Germans, but spend more time in the office on Facebook (or in my case, MangloLassi). I'm not into socialising with colleagues, but some of my colleagues chat for at least an hour a day, sometimes two. Plus time spent making endless cups of tea!
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When I work off site (travel) I prefer to work 12+ hours because otherwise it is just me alone in a hotel room. Might as well be earning money if stuck somewhere. Making people work short days while out if town sucks because it is like they don't get to leave work but stop being paid.
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@scottalanmiller said:
When I work off site (travel) I prefer to work 12+ hours because otherwise it is just me alone in a hotel room. Might as well be earning money if stuck somewhere. Making people work short days while out if town sucks because it is like they don't get to leave work but stop being paid.
This leads to a great question - do NTG consultants get paid hourly? I mean them personally.
Most consultants I've know, myself included, when working for a larger company are paid a salary, so it doesn't matter if I work 6 or 12 hours while onsite, I'm still making the same amount of money.
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NTG has both Salary and Hourly employees. Full timers are salary and part timers (which I have many of) are hourly.
But we do not do flat rate with clients. To do a flat rate to cover for actual cost of work you have to over charge a client to cover for those things you just can't predict. Hourly rates with 50% due upfront are how we operate. Client is charged for actual work not well this might be what we do. All clients are happy with this as they feel more in control of what we are doing and how we are doing it.
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@Minion-Queen said:> NTG has both Salary and Hourly employees. Full timers are salary and part timers (which I have many of) are hourly.
But we do not do flat rate with clients. To do a flat rate to cover for actual cost of work you have to over charge a client to cover for those things you just can't predict. Hourly rates with 50% due upfront are how we operate. Client is charged for actual work not well this might be what we do. All clients are happy with this as they feel more in control of what we are doing and how we are doing it.
Is the hourly rate charged to a single client flat though? Or do you vary that based on the person doing the work?
