Cost-Benefit Analysis
A little extra preparation can go a long way in collective bargaining. Preparation could include, for example, comparative data on wages and fringe benefits paid by other crafts in the area, benchmark economic indicators, and/or market share information. If CLRC data analytics or reports impact bargaining at even a modest degree, the cost savings would be significant.
This simple cost benefit analysis shows how preparation that brings wages closer to market rates can have on a substantial financial impact. The collective bargaining support CLRC provides is a key source for associations, owners, contractors, labor-management cooperatives, and others to achieve these results.
Hypothetical Example:
Hourly Wage Rate
In Year 1, a contractor group with 250,000 annual hours benchmarked its wage proposals using CLRC data. As a result, it was able to settle on a rate that was $0.25/hour lower than anticipated. The savings from using CLRC data would be $62,500 in just the first year, and this amount will be compounded over time.
$0.25 x 250,000 = $62,500 in just the first year!
If the one-time cost of CLRC services/products was $5,000, the net return on investment would be $57,500!
If the contractor group settles at a $1.00 increase each year using CLRC data, as opposed to settling at a $1.25 increase had CLRC’s data not been used, the $0.25 gap would grow to $2.50 by Year 10.
Cumulative Financial Impact
Charting the amount saved by the contractor below, it’s easy to see the impact of a $0.25/hour difference year over year (assuming 250,000 hours each year). The orange area represents the total amount saved within that given year. The red area represents the total cumulative amount saved.
