Best Of Blau Reprinted September 1996. PHC contractors continually buy themselves jobs at prevailing rates.
In my column from May 1996, "The Cost Of Not Knowing Your Costs," I challenged contractors to prove that they could make money and provide decent income and benefits for employees at the PHC service industry's prevailing labor rates of $50-55 an hour. I got no takers, although Paul Swan sent me an interesting letter. It pointed out that many contractors who charge extra for travel time are billing for more labor hours than they actually put in.
"The way that PHC companies can 'get by' on $55-an-hour rates is that they work their employees 10 hours a day," wrote Swan. "Additionally, they charge 'portal-to-portal' so that out of the 10 hours they can 'bill' eight hours. At $55 an hour, figuring their actual billable hours are at 4.5 per day, they are in truth charging almost $110 per 'billable' hour."