Billing rates for Cad techs

[J-G]

Do any of you have information (or links) to the average billing rates for CAD personnel? I would like to know what end I am in in as far as billing goes. I am looking for low, mid, and high skill level rates. Any response would be appreciated. I looked at the AIA salary survey a few years ago, but if I remember correctly it didn't specify what companies were actually charging clients.

At the moment I base the billing rates on a yearly budget (salary + overhead + profit), and am billing at ~$50 an hour for workers with high skill level, and ~$42 for an intermediate CAD tech. For consultants time there is a 15-20% markup. Are my figures below or above the averages?

We do residential work, and it often seems that we are more expensive then other firms, (some people don't seem to mind charging next to nothing for their work).

Thank you for the input.

[bclarch]

Your billing rates seem to be generally in line with what our firm charges. (I don't feel that I can be more specific than that without the owner's OK.) Although I might be wrong, I do believe that construction related fees and costs are greater in your neck of the woods.

There are other factors that are not apparant to a potential client that might make your fees appear to be high even if they are realistic. Your competition might be lowering their overhead by working out of their house, not carrying professional liability insurance, etc. etc. They might also treat some things as reimbursible expenses that you include in your fee. The most likely answer is that they produce less complete drawings and leave it to the contractor to work things out in the field. We run into that one all of the time.

What you have to do is look at how your competition operates. Then you can discuss with your clients the distinction between value and cost. What do they save if the architect's fees are $2,000 lower but they end up with $10,000 worth of change orders during construction? You have to make them understand that they are probably not comparing apples to apples. We are often told that we are "more expensive" than the other architects that our potential clients have spoken with. In reality, we are not more expensive than other architects that operate at the same level of professionalism that we do. That is the key thing that you need to make potential clients understand. Not that its easy.

Luckily, we remain busy enough that we do not need to be too worried about the jobs that walk out of the door based on raw fee comparisons. Our feeling is that an unprofitable project is likely to have just as many, if not more, headaches than a profitable project so you may as well get paid for it. Good luck and don't give up the ship.

[hand471037]

I'm reading a *wonderful* book on design firm business that I feel should be required reading for every designer everywhere.

http://www.amazon.com/o/ASIN/0967547...d=HG9V50EE4WNU

It makes an excellent point about jobs that loose money: That, in essance, when a job looses money you're taking a loan from your future. So it winds up being doubly expensive, for not only are you loosing money now, but you're also going to have to work twice as hard in the future to get back to where you were before you took the money-loosing job.

By setting your fees so that you, and the client, both win (rahter than just the client winning and you loosing) you're actually serving the client better, for you'll have the money to actually serve the client comepletly; rather than being forced to cut corners and put the burden on the client or the contractor. If you can make your client understand that by paying a little more now they will save a LOT more in the future, and back that up with real numbers, then you'll be a lot better off in the long run. Those who are willing to 'take loans on thier future' to get the job today probably won't be around tomorrow anyhow.

[J-G]

Thanks for the replies,

The cost/ competition is something that seems to be a continuous problem. We do set are fees realistically, and we are staying busy, but some work definitely goes to other less qualified firms. That seems to be the nature of residential work. Everyone is bargain hunting, even when they are building million dollar + homes. We have had people use us as a design firm and then have the plans drafted elsewhere. It is always unpleasant to see how fast someone who has no aesthetic or even functional feeling can screw up a beautiful design, but these people have rates we can't compete with. They prey off of the public's ignorance...after all "plans are plans." We can't compete with that, but I do like to feel out other firms, so I know whether we are in the high or middle range.

[gregcashen]

Our firm bills CAD work out at $45-$55/hour, depending on who's doing it. CAD Tech = $45, drafting done by the Design Engineer = $55. I think you are in line with us.

The real question is, what do you have to pay the person who is getting billed out at $45? If you have a guy that you pay (benefits and everything included) $30/hour and he gets billed at $45, your spread is $15, but if you can find someone who you only have to pay $25/hour, a 17% decrease in pay, you make $20/hour, or 25% more. So it really pays to keep your expenses down like Jeffrey talked about.

Then you have to factor in the drafter's (modeler's?) productivity...if anyone has a good way to test someone's competence in drafting, let me know, as I would like to be able to at least make the case to my boss that our drafstman needs training. There seems to be a wide spread between the skill levels of CAD drafters, but the pay tends to be in the same range regardless. How do other people find this?

I saw that the AU handouts included a CAD proficiency test, so I downloaded it to compare my Autocad drafting skills against the surveyed results...I was surprised how slow/inefficient/unknowledgeable the majority of these cad techs coming out of AA programs are. I felt it was quite a straightforward test, but the results showed a large percentage of people not even being able to finish in the time limit given! I think finding those at the high end of the scale would be worth paying a lot more, knowing that, though you are billing them at a higher rate than others in your area, you are still able to get stuff done faster and make more money.

[PeterJ]

these cad techs coming out of AA programs...

Does that work in a "hi, my name's Bill and I'm a CAD technician" sort of fashion? There are UK employment agencies that have tried to devise CAD tests to demonstrate to clients what technician was worth what, but the work varies so much that a basic test cannot do it justice.

I worked for a time with a guy called Pete Woods, one of those true backroom technicians, wore narrow ties, called everyone cat, listened to coool jazz. He made the office a more interesting place and was a whiz with concrete framing and trad construction methods. His best work was by hand but he was good with AutoCAD R12 too - as we were at that time. When we started working on a series of steel framed buildings Pete was all but lost and to some extent worked himself out of a job because his charges didn't mesh with the fees we were getting. I offer this as an example of how testing is fairly clumsy becasue a knowledge of the construction techniques is as valuable, if not more so, than outright drafting speed.

[beegee]

Here's how we calculate time charge rates:-

1. Establish Required Gross Revenue. This is the Total Annual Expenditure plus allowance for future expenditure ( Accrued leave, Sick leave, Capital expenditure, Interest on owners funds and profit on turnover )

2. Calculate Income generating time. ( Available Working Days. Time spent actually generating income ( avail working days less management, admin, marketting, promotion, prof development etc etc. ) For example, a junior architect or tech might have 1150 hours per year.

3. Establish Charge Relativities. This is entirely subjective. Clients expect that charge rates for principals will be higher than for technocal staff, on the basis that the Principal can make important decisions due to his experience and qualifications. Thus its necessary to assess the value and benefit to the firm of each member of the staff to establish relativities.

Based on an index of 1 for the most junior employee, a Principal of a small firm may have a relativity of 6 to 8. In the absence of other indicators, annual salary packages may be used as an indicator.

4.Calculate the Charge rates using weighted times. For example:-
Can't format in post... see attached.

[gregcashen]

[quote:ea1c43a493="gregcashen"]these cad techs coming out of AA programs...

Does that work in a "hi, my name's Bill and I'm a CAD technician" sort of fashion? There are UK employment agencies that have tried to devise CAD tests to demonstrate to clients what technician was worth what, but the work varies so much that a basic test cannot do it justice.

I worked for a time with a guy called Pete Woods, one of those true backroom technicians, wore narrow ties, called everyone cat, listened to coool jazz. He made the office a more interesting place and was a whiz with concrete framing and trad construction methods. His best work was by hand but he was good with AutoCAD R12 too - as we were at that time. When we started working on a series of steel framed buildings Pete was all but lost and to some extent worked himself out of a job because his charges didn't mesh with the fees we were getting. I offer this as an example of how testing is fairly clumsy becasue a knowledge of the construction techniques is as valuable, if not more so, than outright drafting speed.[/quote:ea1c43a493]

Absolutely agree. But even if someone has a good knowledge of how a building goes together, they might be a complete sloth with CAD. I, for instance, would not recommend a hire who was a construction expert but who had no CAD training or was simply inefficient in CAD. It is my experience that users that are not motivated to get better at CAD/BIM/whatever -- to learn the programs in-depth -- will not become efficient users of CAD software. They will click icons all day long and slowly toil away at a drawing. I want someone who knows the building AND how to use CAD efficiently to draw/model it.

In the example of the CAD profiency test I mentioned, it was pathetic how slowly some of the testees (not testes, beegee) completed the test. All the building knowledge in the world couldn't save them.

[J-G]

Thank you for the replies. Beegee thank you for the attachment. It looks like you are using a more involved method for billing rates...the idea of factoring the a relativity is interesting.

Greg, one thing that I have been doing to compare the productivity of draftsmen is to keep track of their time and the category that the time was spent on. Since we do residential work a project is typically handed over to one person to do the majority of the drafting. This allows for some comparison, but since every project is different it isn't perfect. When I do a proposal for a new job I base it on the time (and actual cost) for similar projects in the past. If there are specialized items required for preliminary design review by regulatory agencies or misc other considerations I tract that time separately. I started keeping detailed records of time to help with proposals, but it can also help in judging productivity rates. I basically feel that if employee "A" can finish a job - accurately - in less time then employee "B" they should be proportionately paid more. The cost of our plans should remain the same either way.

Experience is definitely an important factor. Someone with construction knowledge who "knows how to put things together" is going to work fast simply because they can solve problems and draw things right the first time without as much hesitation (if you are constantly marking things up there is going to be a loss), but there is also a "speed" factor. When I watch some guys they seem to just be in a sort of comatose state as they slowly, but steadily work...one guy was actually dosing in front of his computer screen ...we had a contractor in the office at the time who saw him and promptly startled him.

[beegee]

Jonathon,

The relativities I mentioned can be used to factor in productivity either as a multiplier or in terms of paid salary. They can also be used as a comparison with other firms or " industry best practice".