The labour crisis and increasing pay p/h. Do you need to increase your prices to remain profitable in 2023?

The labour crisis and increasing pay p/h. Do you need to increase your prices to remain profitable in 2023?


The economic data is fairly clear: employers are getting desperate for workers. By the end of April 2021, job openings rose to an unprecedented 9.3 million, according to the Bureau of Labor Statistics.

In the US, Amazon has announced they are increasing their minimum wage to $18p/hour and McDonald's have announced they will increase their wages to $15p/h.

In the UK, Brexit and Covid are helping to deliver a long-promised blue-collar wage boom.

The effect of this is happening now:

  • Workers are happy to walk away from their current jobs for better work/pay.
  • Employers lacking staff are increasing their hourly wage to entice staff. 

What does this mean for you?

The problem the tent rental industry faces is: “Are your staff going to work for you in a physically demanding job which pays less than other ‘easier work”

A lot of experienced employees including foremen, operations managers and riggers have left the industry this year. 

A number of our suppliers have told us that their long term staff have not been as loyal to the job as they initially thought. 

The worst-case outcome would be: Your staff leave you prior to next year's season, meaning you have to hire inexperienced staff or pay for expensive agency staff.

The end result is that your profit margins are going to minimise. 

On top of this, we’re also experiencing unstable prices for materials, for example; Timber prices have increased by more than 20% in a single month in the UK. 

This means the cost of purchasing new equipment next year could dramatically increase.

When you combine the labour shortage, increase in wage cost p/hour and an increase in manufacturing costs, you could be walking into a financial nightmare next year if you have not correctly priced your jobs. 

How an increase in pay per hour affects the profitability of a booking.

The table above shows the decreasing effect on a bookings gross profit and gross margin when the average wage per hour increases. 

What can you do?

1. Understand your staff costs?

Add your staff cost into Marquee Tech to ensure your bookings are profitable. If they are not, increase your prices. If you have already said yes to unprofitable bookings, then explain to the client you need to increase your costs (due to labour and material prices increasing). If they will not accept a price increase, consider returning their deposit. 

There are too many busy fools in this industry. Companies that burn themselves out, chasing their table and stressing over bookings which they should have said no to in the first place.

Add you costs into Marquee Tech so you can quote based on job costs

2. Pay per hour?

Compare pay for similar manual labour work to tent rigging. Are you paying significantly less than the local construction site? Speak to others in the industry and find out how much other companies are paying their staff. If you are paying less, consider increasing your pay per hour to ensure your staff do not leave you next season.

3. Increase your prices to guarantee a profit

Increase the prices of your hire items or add a line item for labour and delivery. Ensure you are hitting sufficient margins by using the profit calculator on Marquee Tech.

Ensure your bookings are profitable.

Keep your business out of financial difficulty in 2023. Track your staff costs, retain key employees, ensure your bookings are profitable.

How can Marquee Tech help?

In just 3 days we’ll create an account for you on Marquee Tech which includes:
1. Your staff costs
2. Your delivery costs
3. Your sub-hire costs + vendors
4. Other ancillary costs
5. Your stock list + prices
6. Your components allocated to each tent & products
7. Design you modern quotes that reflect your brand
8. Upload your previous customers onto Marquee Tech

We can do all of this for you in 3 days because we are from the industry.

We know how your products and tents work. We know what customers want and we know what prices to charge in order to be profitable against costs (including labour).

The best bit? We only required 1-2 hours of work from you to get started.

Once you are up and running, you’ll be able to quickly and easily build quotes that incorporate every cost associated with a booking (including labour) so you can identify what jobs are making you profitable and what work you should say no to.

The end result is a more profitable business with less stress and less staff burnout from running around rigging un-profitable jobs.

To find out more, contact us here.

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