Tracking the productivity of construction labor takes effort, but when it’s done right, the payoff for contractors is significant. In this post, United Solutions President Greg Kirshe explains how contractors gather and act on performance data to reap meaningful gains in profitability.
For many contractors, labor is the biggest cost. That is why so many construction owners devote the time and resources to measure the productivity of every type of labor that goes into a job.
What is the most efficient way to do this? First, make sure jobs in your accounting system are set up to accommodate labor and costs by phase, area and task. Next, ensure that your teams are reporting their time by cost code within each job. This will enable you to calculate team performance on each task. Having this data will help you in real time (on each current project), and in the future when you bid for and take on new jobs.
On each project, job costing provides visibility into how labor productivity measures up to the estimated budget, and helps you identify areas that need attention. Here’s another real-time bonus to productivity tracking: when an unforeseen event occurs, such as a pandemic or disruptive weather, you have the data you need to make your case for a change order.
Once you have a storehouse of reliable productivity data, that data becomes an asset for every future project you bid on. Your data will inform every facet of your business. It will give you a benchmark for estimating, budgeting, and scheduling, as well as for performance-based bonus programs. Each step in the process relies on the prior one: estimating informs your budgeting, scheduling, and then labor on the job. Your data can make your bids more competitive – and insulate your profits.
An investment in the right technology is step one in mastering how to track your labor productivity. Sage Intacct Construction software is a flexible financial management solution that adapts to your workflows and reporting requirements. It gives you real-time visibility with built-in and adaptable dashboards, reports, graphs, and charts. Multidimensional reporting and dashboards provide faster and deeper insights into accounts, helping to save hours per month.
Interested in learning more about using data to maximize your profitability, job after job? Your United Solutions team would be glad to partner with you. Contact us today.
United Solutions provides unmatched software solutions and support for clients in the construction, real estate industries. We enable our clients to operate at peak efficiency and maximize their profits.Read More
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