Cost-efficient labor planning with Bridgit Bench

How effective workforce planning can help you control your labor spending

Cost-efficient labor planning with Bridgit Bench

Aligning your workforce capabilities with project demands is the key to cost-efficient labor planning. In construction, you face the dual challenge of avoiding labor shortages, delaying projects, and excessive staffing that can inflate costs unnecessarily. The good news is that labor costs can be one of the most controllable costs on the balance sheet. 

This article aims to show you what to pay attention to when strategizing your workforce plan to keep costs under control. We also want to show you how construction workforce planning software like Bridgit Bench can help you be cost-efficient when staffing your projects. 

Steps to develop a labor plan:

Before we go on to any conversations about software or what to pay attention to, it’s important to lay out the steps to what a labor plan looks like in the first place. This may seem redundant since you do it every day, but the minutiae of daily activity can make us lose track of some basic fundamentals. Here are the high-level steps to developing a labor plan:  

1. Project evaluation: Begin with a detailed assessment of the project’s scope, identifying the types and stages of work involved and the skills necessary for each phase.

2. Resource inventory: Take stock of available labor, considering the skills, experience, and availability of current workforce members.

3. Gap analysis: Compare project needs with your resource inventory to identify any labor gaps that need to be filled, either through hiring, training, or subcontracting.

4. Scheduling: Create a detailed work schedule that aligns workforce allocation with project timelines, avoiding overstaffing or underutilization.

5. Cost forecasting: Estimate labor costs based on the developed schedule and aligned with the project budget, including provisions for overtime, benefits, and additional expenses.

6. Contingency planning: Develop contingency plans for unexpected labor needs or changes in project scope, including strategies for scaling the workforce up or down efficiently.

Key performance indicators (KPIs) to track:

1. Labor cost variance: Track the difference between budgeted and actual labor costs to manage budget adherence.

2. Schedule adherence: Monitor the percentage of tasks completed on time to understand if the project is progressing as planned.

3. Productivity rate: Evaluate the workforce’s output relative to the input. This will tell you how efficient the use of labor hours is.

4. Overtime hours: Keep an eye on overtime hours as they can indicate scheduling inefficiencies or unforeseen labor demands.

5. Turnover and retention rates: High turnover can indicate workforce planning or management issues, impacting project continuity.

By following these steps and tracking the right KPIs, you’ll understand that cost-efficient labor planning isn’t static but a living strategy that evolves with the project’s needs. The problem is that tools we use to grasp this dynamic process, like spreadsheets, are static. Because of this, cost efficiency is hard to see, let alone control. 

The dynamic tool you need

Cost-efficient labor planning needs centralized data access and clear visibility of staff allocations. Bridgit Bench addresses this need by offering a platform where you can see all your people and project information. This simplifies the process of tracking employee assignments and seeing labor supply and demand, availability, project needs, and team skills.  

Bridgit Bench also provides tools for analyzing labor costs at both project and corporate levels. The Project Spend Report offers insights into the financial implications of staffing decisions for individual projects. It breaks down costs by role, factoring in the duration and requirements of each project stage.

For a broader overview, the Workforce Spend Summary aggregates data from multiple projects, giving operations leaders a comprehensive view of total labor costs across their project portfolio. This dashboard allows for quick assessments of overall staffing expenses, helping to ensure that company-wide labor spending aligns with financial targets.

These features streamline the process of labor planning and cost analysis, facilitating more informed and precise management decisions.

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Budgeting and cost management:

As we mentioned earlier, a budget is a component of every project, with labor costs representing a large chunk of it. The Budget vs. Planned Cost Widget in Bridgit Bench provides you with a clear picture of how your staffing plan measures up against your budgeted labor costs. It draws on individual cost rates, which can be preset for each role within the project’s settings. 

By utilizing real-time updates, the widget allows for an agile approach to budget management. Any adjustments made are reflected in the cost projections. All financial planning is based on the latest data, preventing budget overruns and enabling managers to maintain financial control. Using default or individual cost rates helps accommodate for the variances in payment structures, whether salaried or hourly, making it flexible and accurate.

Monitoring and adjusting for cost-efficiency:

Bridgit Bench’s real-time responsiveness helps you continuously monitor project labor costs. Ongoing surveillance is crucial for maintaining cost efficiency throughout the lifecycle of a project. It enables managers to spot trends that could lead to cost overruns and to make proactive adjustments to the workforce plan. For instance, if you identify a surge in overtime costs, you can quickly investigate the cause and adjust schedules or redistribute labor resources accordingly.

At the corporate level, the financial insights from Bridgit Bench help you make strategic decisions that affect the entire project portfolio. The ability to monitor labor costs and project outcomes gives you an understanding of how staffing affects financial performance. With this knowledge, you can drive cost-saving initiatives, such as optimizing the mix of permanent and temporary labor or reassessing the allocation of high-cost resources to different projects.

Bridgit Bench offers a comprehensive approach to labor cost management. Its tools for budgeting and monitoring allow you to maintain financial control, ensuring that projects remain profitable without sacrificing the quality of work or the pace of progress.

Nemanja Simic headshot

Nemanja Simic

Nem is a content writer at Bridgit. He started his career in business development, where he spoke to contractors daily, providing him with a deep understanding of the problems around workforce planning in the construction industry. Using this insight, Nem developed an approach to provide digestible, data-backed advice to help contractors get the most out of their workforce strategies.

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