This is part 1 of a 3-part series.
I got news for you, it already has. Think about how the wireless work has changed over the last decade. Most workers expect to have an hourly job or they expect to capture a salary. From what I see, those days are coming to an end. I see it with many offers out there. I see the changes happening and the contractors see it too. The carriers are looking at how to save money and the latest target is the GC. However, they have had a flat fee per site model for years. Is the work model for wireless going to change all the way down to the worker? Maybe. Let’s look at why this is changing.
There are many changes in the wireless services industry, but the wireless work model is certainly one of the biggest. It affects almost everyone in this industry. If you are a worker in this industry then you could be a 1099 or W2 employee. Most workers are still paid hourly or salary, this is changing. You will soon be paid for the job you do, not for the hours on site, (although it is bid it that way).
If you are a contractor or own a services company, then you are likely to get paid by the job, site, or specific service. Generally, a flat fee per site. I don’t see too many T&M, (Time and Materials), jobs unless they are for emergency repair work. If you can get this work, good for you!
The type of work has changed. It used to be you had a tower crew and the tech at the site after the engineering was complete. Now you have the ground crew, the tower crew, the IT tech, the BTS tech, the lighting crew, the alarming people may be out there, the grounds keepers of you are in a place that needs to look nice, so many people to maintain a shelter or cabinet or site. The remote group is just as critical as you have a team of engineers, RF, BTS, low-level design, IT, and so on. Let’s not forget the NOC or managed services that will monitor alarms and look for issues as well as manage the access to the site. It takes a huge team. This all costs money.
When a contractor responds to RFPs, it is usually a flat price per site or job. They get paid by the job/site and usually commit to one price per site across dozens of sites. They fight for every change order. They often they hear, “there is no money for change orders” which we all know is just a line to make sure GCs, (general contractors), don’t pay more or they don’t want to go back to the end customer and admit they missed something. If you don’t do the extra work, what happens? You could lose future work, you could get a bad name in the industry, or you could do it and eat the costs. Maybe let them hire another contractor down the road to do the change order. Today’s contractor should be smart and willing to walk if they know the jobs can’t be done for that cost. That takes balls because it will risk future work and reputation. However, they want to get paid, they don’t want to piss off the customer, and they don’t want a bad reputation. It all plays into this formula. Flat fee per site is the way things are being done today.
Times are changing. Now we expect to have a flat rate to complete a job. Most companies don’t want to pay change orders. Work is a flat fee and most people hiring contractors have a good idea how long it takes to do a job. For instance, a cell tower, 120 feet mounting location, 3 sector array with antennas, radio heads, and hybrid cable, most companies expect to pay for 2 days labor. They estimate what it will cost for 2 days labor. This is how they drive the price down. Then they put it out to reverse auction. This is because they see the work as a commodity. A commodity is a common product that can be bought and sold anywhere, like coffee or copper. The only difference is that most companies don’t see value in better work. This is because when you look at supply chains, procurement, and accounting departments, their main KPI, (Key Performance Indicators) that they are judged on are cutting costs, not quality of work. This is where the problems begin in the wireless world. I am not blaming accountants, but these decisions have affected quality and safety. When a climber dies due to poor safety equipment or poor training, no one remembers that those costs were cut as a money-saving effort, but I digress, sorry.
Flat pricing is not all bad. It makes it easy for carriers to roll out. They can have can plan a solid budget. They know what is needed at each site. The contractor knows what to expect to get paid on each site. It makes sense from a business perspective. It should motivate the contractor to get done quickly and efficiently, in theory.
The downside? It will encourage the contractor to take shortcuts. To get paid as soon as possible. The end customer should audit each site for safety, workmanship, quality, and completeness adding costs to the job. The PM must manage not only the rollout but the other contractors that are doing the safety and quality audits. Now that its flat fee most companies only do 1 service, tower work, ground work, RF work, sweeps, optimizations, commissioning, integration, and so on. By the way, none of this is free. The flat fee will add costs.
Will the flat fee model trickle down to the worker? That is where it seems to be headed.
See Part 2 and 3!