In an industry as labor-intensive as construction, few things can hurt your profitability more than unproductive workers. Here are eight tips for improving productivity.
1. Don’t blame your workers. While it’s tempting to blame poor productivity on lazy workers, late starts and excessive breaks, the fact is that most construction workers strive to be productive. More often than not, poor productivity is the result of waste and inefficiencies that are within management’s control.
2. Focus on unproductive time. Research by the Construction Industry Institute shows that craft workers typically spend less than half of their time on tasks. The remaining time is spent on unproductive activities, such as waiting for equipment and materials, waiting for instructions or waiting for work areas to be ready. If, for example, workers spend only 30% of their time on direct work, your greatest opportunity for productivity gains is to focus on the 70% of worker time spent off task. In other words, reducing the amount of time workers spend off task will produce greater benefits than attempting to improve their efficiency during the time they spend on task.
3. Conduct an activity analysis. Spend some time monitoring activities on jobsites and analyzing the results. Often, this process will reveal opportunities to improve productivity. For example, better scheduling and logistics can reduce delays that result when workers have to wait for materials or equipment, or for other workers to complete their work. In many cases, solutions are surprisingly simple, such as finding a way to store materials, equipment or tools closer to the areas where they’re needed, or storing materials on wheels so they can be moved more easily.
Strategies for reducing personal time — such as locating portable toilets closer to work areas — can also have a significant impact on productivity. On one high-rise project, a structural contractor reduced the amount of time it took for workers to have lunch by arranging for a sandwich shop to operate alongside the structure.
4. Improve communications. Poor communication between supervisors and workers can result in unnecessary mistakes and redo work, causing productivity to suffer. With proper training, supervisors can learn how to communicate assignments to workers and ask the right questions to ensure they get it right the first time.
5. Take advantage of technology. Web-based project management applications, scheduling software, and other technological innovations can boost productivity by speeding up communications, providing workers with the latest project information in real time and making the construction process more efficient.
6. Set realistic goals. Performance-based incentives can be an effective tool for motivating workers and improving productivity. But it’s critical to set realistic goals. If workers feel that performance targets aren’t achievable, productivity may actually decline.
7. Pay attention to safety. The most important reason to have a strong safety program is to prevent injuries. But good safety practices also reduce the delays and downtime associated with accidents on the job site.
8. Manage overtime. Excessive overtime can result in fatigue, higher accident rates, absenteeism and worker turnover, all of which can hurt productivity. Proper planning, scheduling and supervision can help keep overtime to a minimum.
Improving productivity is one of the most effective strategies you can employ to boost your bottom line.
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Bethany Smith, CPA, CCIFP
Bethany Smith, CPA joined Frazer, LLP in 2011 and has six years of public accounting experience. She is a Certified Construction Industry Financial Professional and conducts audits, reviews, and compilations of various construction, manufacturing, and non-profit entities. Bethany is a member of the National Association of Women in Construction. Contact her at firstname.lastname@example.org or 714.990.1040.
Frazer LLP has far-ranging experience in the specialized accounting methods for the construction and engineering industries. From tax and accounting compliance and consulting on purchase and sale of real estate, negotiating and tax free exchanges to cost segregation and business valuation, our team can provide you with expert tax, financial, and management advice in any stage of your construction business.