Do you want to figure out why your construction company isn’t generating as much of a profit as it should be?
It might be a matter of taking a closer look at your employees’ labor productivity.
Labor productivity is a comparison of how much work an employee is getting done every hour versus how much money that employee is getting paid to do their job. And if you find your employees have a low labor productivity, it could mean you’re either paying them too much money or using too many of them on construction sites at one time.
It could also mean that your construction company simply isn’t making a strong enough effort to improve productivity. Fortunately, there are some simple steps you can take to change that and give your bottom line a boost.
Here are 5 proven ways to improve labor productivity in the construction industry.
1. Avoid Putting All the Blame for Low Labor Productivity on Your Employees
Did you just find out that your employees have low labor productivity overall? Your first instinct might be to put all the blame on them for it.
You might say things like:
- “If they didn’t take so many coffee breaks, they would be more productive!”
- “If they knew how to show up on time every morning, they would be more productive!”
- “If they weren’t so lazy, they would be more productive!”
And to some degree, you might be right. Surely, you have at least a few employees who take too many breaks, show up too late every morning, and demonstrate general laziness.
But the truth is that the majority of your employees are probably hard-working people who want to do a great job each and every day. They might just not be getting put in the right position to succeed.
So rather than heaping all the blame on your lower-level employees, take a look at your management team to see what role they’re playing in your company’s low productivity.
They could very well be to blame for not running a tighter ship and not communicating more effectively with those who are working under them. Work with them to establish scheduled breaks and concrete start and stop times for workdays so the rest of your employees know what is and isn’t acceptable.
2. Figure Out What’s Causing So Many of Your Employees to Waste Time
In a perfect world, all your employees would be working all the time when on a job site. That kind of productivity would give you the most bang for your buck and earn you the most profits.
But more often than not, you’ll see a bunch of construction workers standing around on the job not doing much of anything. In most cases, they’re:
- Waiting for a piece of heavy equipment to start up
- Waiting for materials to arrive in their work area
- Waiting for their work area to be prepared for a task
- Waiting for instructions from a foreman about what they should do next
That’s a lot of waiting! And all that waiting is what you want to try and avoid whenever possible.
Ideally, you want your employees to be actively engaged in tasks that need to be done, not waiting around for them to start for whatever reason.
If you’re able to limit the waiting and encourage your foremen to keep their teams actively involved in tasks, it’ll improve labor productivity in no time.
But before you can do it, you need to take time to figure out why so much time is being wasted and what can be done about it.
3. Set Goals for Employees and Provide Performance-Based Incentives
It can be a real struggle for those in the construction industry to stay motivated. As soon as they finish one project, another one pops up and forces them to start their process all over again.
Do you suspect your company’s low productivity might be directly tied to a lack of motivation? If so, setting goals for your employees and offering them performance-based incentives if they reach those goals might not be a bad idea.
Goals get people working harder. They also provide them with something to look forward to in the construction industry.
Just make sure the goals you set are realistic enough for workers to reach. Otherwise, they could end up having a negative impact on your labor productivity as opposed to a positive one.
4. Manage Overtime Hours More Effectively
You might be thrilled to see so many of your employees offering to work overtime on certain jobs. It helps you complete jobs quicker and seems to improve productivity.
But the truth is that working too many overtime hours in the construction industry can actually have an adverse effect on many people. It can lead to:
- Excessive fatigue
- Increased accident rates
- Higher worker turnover
- And more
These things could actually hinder your labor productivity in the long run. So it’s best to limit the number of overtime hours you offer to your employees.
Instead, plan out projects properly and give your employees enough time to complete them during normal business hours. Your employees will be working less on a daily basis, but they’ll be more productive overall.
5. Use Technology to Your Advantage!
It used to be difficult, if not impossible, to track productivity out in the field. But today, there are apps and web interfaces that are designed to make it easy to do.
Rhumbix is a great example of this. It’s an app and web interface that works by collecting and analyzing labor productivity so that construction company owners, general contractors, and others can monitor and improve it in real-time.
It can give construction companies access to tools and data that will ultimately make them more productive and, therefore, more profitable.
Start Improving Your Company’s Labor Productivity Today
Have you been searching for ways to improve the labor productivity of your construction company’s employees?
Try some of the suggestions listed here. They should produce real results and highlight some of the things your company could be doing better.
Read our blog for more valuable information about improving productivity.