Good Help is Not So Hard to Find

Good Help is Not So Hard to Find:
Compact utility loaders contribute to bottom line through labor savings.

By Neil Borenstein
Senior Marketing Manager, Toro Sitework Systems

Landscape construction is an industry that calls for tough labor willing to work 15-hour days in some of the most extreme conditions. Although some contractors will take what they can get, it’s not enough to simply find bodies to fill these positions. A certain skill level with specialty applications is critical to making customers happy and maintaining a valuable reputation in the market. However, with long outdoor hours, back-breaking work and oftentimes only seasonal windows of employment, it’s difficult for landscape contractors to attract the quality and quantity of labor required to carry out such demanding jobs. Furthermore, the costs of retaining this labor are steadily on the rise.

Fortunately, many landscape contractors recently have discovered an alternative to manual labor that not only performs consistently on a multitude of landscaping tasks, but also has a proven record of productivity and efficiency. Compact utility loaders are redefining the role of labor in the landscape industry while helping landscape contractors realize their full potential.

Compact Utility Loaders 101

Designed to enhance, and often times eliminate, manual labor by operating a number of hydraulic-powered attachments, compact utility loaders began appearing in fleets in the mid-1990s when landscape contractors recognized a need for a piece of equipment that bridged the gap between a skid-steer loader and manual labor.

The virtual equivalent of a Swiss Army knife for the landscape industry, a compact utility loader and its uses are limited only by the number of attachments available, and there are more than 35 types on the market, Since landscaping requires so many specialty tools to be used at any given time – and the tools can vary from job to job and season to season -- the landscape contractor’s fleet is an ideal home for a machine that can serve as an auger, trencher, vibratory plow, hydraulic breaker, backhoe, leveler, tiller, cultivator, hydraulic blade, power box rake, and more. With the simple addition of rotary brooms, hydraulic blades or snow throwers, the compact utility loader enables even small businesses to easily expand their service offering beyond seasonal to year ‘round.

On most landscape jobs, there are several smaller tasks that contribute to the end result. Compact utility loaders shine in these situations because they are capable of using a variety of attachments in a short amount of time. In addition, because attachments are changed out relatively quickly – often times by simply turning two locking pins and connecting hydraulic lines – compact utility loaders maximize productivity while remaining extremely efficient.

Potential Savings

With all the advantages that go along with utilizing a compact utility loader, some may consider buying one “a no-brainer.” However, others may argue that the cost of ownership is enough to deter them from making the investment. After all, the average cost of a compact utility loader with a four-piece attachment package and a trailer is around $20,000. Add that to approximately $1,500 yearly for maintenance and fuel – not to mention depreciation – and it’s almost as if you are paying the salary of a full-time employee. How is that a justifiable investment when most landscape contractors can hire employees that will perform manual labor for only $9 per hour?

In reality, “inexpensive” labor is costing employers more than they realize. The following calculation demonstrates that a single laborer working for $9 per hour will cost nearly $20,000 a year. At this rate, with a five-person crew, the expenses add up quickly.

In comparison, although it costs nearly as much as employing one person for $9 per hour, owning a compact utility loader offers a better return on investment. Considering one unit can free up two to three employees to be deployed to other jobs, or replace them altogether, the potential for taking on more work and, ultimately, making higher profit is greatly increased.

Additionally, adding a compact utility loader to a landscape contractor’s fleet will provide a significant amount of equipment savings, eliminating the need for various dedicated specialty tools from trenchers and post-hole augers to stump grinders and snow throwers. Combined with the potential labor savings, lower equipment costs create virtually unlimited value to anyone looking to own a compact utility loader.

Rent or Own

Owning a compact utility loader is a good investment for a landscape contractor. The labor savings and return on investment alone are enough to sell just about anyone. But for the skeptics who are unsure how such a machine will fit into their fleet, rental is a cost-effective option that will not only help the user see the value in a compact utility loader, but also see the potential for expanding their business.

Renting at approximately $120 a day with a bucket (additional attachments ranging between $20 and $35), compact utility loaders can quickly turn a profit for landscape contractors interested in testing the waters. By bidding a job based on hand labor, then completing the job with a rented compact utility loader, landscape contractors stand to make a larger profit in a lot less time.

Additionally, because a compact utility loader frees up two to three individuals, there is more labor to go around, allowing foremen to send their workers to more jobs.

Once an operator has the feel for a compact utility loader and sees the value of it in their fleet, rental also allows for a little experimentation. With more than 35 attachment options available, there are many avenues a compact utility loader can take a landscape contractor within their business. For example, if there is an opportunity for removing trees to open up a residential lawn, a landscape contractor may choose to rent a compact utility loader with a stump grinder attachment. Similarly, landscape contractors looking to expand their business into the winter months may choose to rent a snow thrower or rotary broom attachment with their compact utility loader to gauge whether or not the seasonal expansion will be profitable.

Although the possibilities are abundant, there comes a point where rental can become more of an expense than an advantage. It is a general rule of thumb in the landscape industry that if a contractor rents a compact utility loader more than three times a month, they would be wiser to purchase one. Once a piece of equipment is used on a weekly basis, it is easier to justify the expense. The return on investment is much quicker. Furthermore, once compact utility loaders are purchased and integrated into a fleet, most landscape contractors find uses for them on virtually a daily basis.

The Bottom Line

Labor is expensive for landscape contractors and is becoming increasingly more difficult to find. Whether looking to expand or simply to stay afloat among competitors, landscape contractors are constantly faced with the challenge of retaining quality labor. However, by understanding their own needs for a manual labor alternative and by utilizing the appropriate package, landscape contractors and their compact utility loaders stand to gain a reputation for quality, a competitive edge in the market, and ultimately higher profits in the long run.