Managing Labor (Part 1)
It is more important today than ever before to make sure you are watching your costs. As we all know, labor has the most variables making it the hardest category in your bid to control. Knowing these variables will help identify where opportunities lie.
So what are some variables and how can you identify and manage them?
It starts with collecting timecards. If you don't do it already, consider implementing daily timecards with as much detail as you need to evaluate the success of the job, but not so much detail that the field will get frustrated. Most field employees are in the field because they like to work with their hands and not so much with paperwork, so recognize the balance.
Daily timecards are more accurate and should be easier for payroll to input versus lump sum timecards, which may not provide you the detail you need to determine your successes or identify those improvement-needed areas. Ensure the timecards are accurate, legible, and submitted on time from the employees. Most construction companies say that collecting time is their payroll department's biggest headache, which is usually true whether you have 15 or 1,000 employees.
Along with implementing daily timecards, companies should provide their field employees with specific targets.
Using golf as an analogy, would golf be as much fun if there was just a big field with no hole, no flag, and no target to shoot for? Of course not, it's that measurement that gives us the instant feedback, rewarding us for our success when we make par or the opportunity to improve if we score over par. Working in construction is no different. If our foundation crew is always going over budget but our flatwork crew is doing ok, we would know that we need to improve our foundation crew's performance or review our estimate to ensure we budgeted enough hours to complete the task. How would we know this if we didn't estimate for it upfront, track it while we were performing it on a daily basis and evaluate it to determine the steps to become more competitive?
Here's another analogy, would golf be as enjoying if we did not track individual holes and just played all 18 and then added them all up and compared that score to 72 as our goal? Most golfers would say no, because the scorecard has taken away all of the individual successes of experiencing a hole-in-one or a birdie. This experience is the same for your crews. If we lump sum all the hours to the job and then when the job was complete provide them with feedback, that feedback will have lost all of the impact that it could have if we let them know as tasks were completed.
Summary: By giving your employees a target to hit, you provide them a better chance to hit your budgets and enable them to buy in to the overall success of the job.
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