Labor cost management is one of the most complex aspects of construction management. The reason is that you have to control numerous employees, each with a different hourly wage, spread across several sites.
Luckily, modern technology and construction time tracking make the process much easier than it used to be 20 to 30 years ago. By relying on the internet and GPS, we know where each employee is located and how they’re spending their time. This makes it easier to assess their activity and input.
What Makes Labor Management so Important?
Like in any other industry, employee wages in construction represent one of the biggest expenses. This is especially true in the last decade or so, as skilled physical labor has become scarcer and thus more expensive.
In an ideal world, you’d want to minimize this expense as much as possible without losing service quality. In reality, you’ll provide reasonable wages to your workforce in an attempt to reduce turnover and retain the best performers. Because of that, managers are always on the lookout for other tricks that would help them reduce this expense.
For example, companies are registering their offices in countries with lower taxes. They’re also trying to reduce their obligations outlined in collective-bargaining agreements. With these and some other tricks, you’re able to optimize your expenses without losing on quality.
Tricks for Enhancing Construction Labor Management
Here are some of the best practices that will allow you to optimize your labor expenses:
1. Work with Your Employees
Regardless of payroll management, companies should do their best to create a solid rapport with the employees. These projects are extremely complex and require lots of sacrifices for everything to break right. Among others, you need to introduce technology and policies that will simplify communication between workers and contractors.
Great cooperation reduces errors on the field and makes it easier to streamline tasks. By monitoring the situation on the site, your management can reroute resources and employees toward priorities. This practice also eliminates waste, which is extremely common in the construction business.
2. Increase Site Safety
Accidents on construction sites are much more common than you might think. As such, both companies and regulatory bodies are always trying to introduce new, enhanced policies and technology that would prevent these mishaps.
Besides simply being a question of ethics, workplace accidents can be disastrous for your bottom line. Even smaller injuries caused by equipment misuse will cause major delays in the project. Things get worse when the accident is caused by the company’s negligence or inability to provide safety equipment. In these cases, you can get sued for all that you’re worth.
The construction organizations are not only responsible for equipment; they should also introduce training and other precautionary measures that would reduce the number of accidents. For example, it is your responsibility to monitor employees’ fatigue and determine if staff is able to execute physically demanding tasks.
3. Reroute Labor
Simply hiring the best talent won’t get you far. You have to think about how to utilize their skills to maximize efficiency in the field. Now, we’re not necessarily talking about exhausting your workforce to the point of burnout. Instead, we’re referring to the process of allocating staff so they handle complex tasks that require experts’ attention.
Further education is another crucial part of employee allocation. By training and promoting people from within the company, you’re able to get cheaper labor for a while. Furthermore, you reduce the expenses required for onboarding new talent.
4. Find Great Software
As mentioned before, software and wearables have become a vital part of daily construction operations. With excellent software, you’re able to streamline administrative tasks that would otherwise take a lot of time for your contractors and workers. Furthermore, the use of software minimizes errors that are otherwise prevalent in paper-based systems.
Perhaps the best use of software is for monitoring your workforce on the field. For the longest time, employees used the buddy-buddy system to clock in and out. They would use various tricks to make it seem as if they were present at the site for much longer than they were.
Luckily, with wearable technology, this exploitative practice has come to an end. Nowadays, management knows where each employee is located on the site and if they’re engaging in productive activities. Besides measuring their input, this technology is also vital for calculating real work hours.
5. Address Staff Issues
Not all workers are trying to steal from their respective companies. Some of them have tangible, realistic gripes with the management regarding certain policies. A big fraction of construction workers nowadays are overworked to the point of burnout. So, as time goes by, they become less and less motivated, which affects their productivity while increasing employee turnover.
To address these problems, contractors and higher management should create a clear line of communication with their labor force. You have to introduce a reliable feedback system that would show you the biggest problems your staff is facing. That way, you can have a better sense if there’s something you need to fix.
6. Provide Tools and Equipment
We’ve already written about the importance of proper safety equipment. But your obligations don’t stop there. You should provide advanced equipment, clothing, and other assets that would make staff’s job easier. Not only does this help your workforce, but access to shiny new tools will boost overall productivity.
When purchasing new assets, find a financial option according to your current capabilities. While expensive AI-driven software and machines are more expensive, they pay off in the long run. Alternatively, you might consider procuring new assets through renting.
Last Thoughts
To optimize your labor-related expenses, you need to work together with contractors and employees on the field. Improve communication to discover common bottlenecks and introduce software that will automate the administrative processes. Only through sizable investment can you minimize your long-term expenses.
