With the construction industry undergoing a digital transformation in recent years, a strong emphasis has been placed on the importance of collecting accurate data to inform the decision making process at the company and project level. “Forecasting” has quickly become a buzzword and important criteria when evaluating construction resource management software. However, there is sometimes a disconnect between contractors in regards to what workforce forecasting is and why it matters to their organization. In this article, we’ll set out to define workforce forecasting and why it should matter to you.
What is workforce forecasting?
Workforce forecasting is the process of using historical and forward looking workforce data to predict, or identify trends in your workforce planning and utilization rates. This data is meant to answer important questions like:
Do we have the capacity to take on a new project?
Understanding your workforce capacity can help to identify future projects that may require an increase in the price you bid because you will need to bring on more team members to complete the project in the event that the bid is won.
Where can we take on more work?
Your forecasting should highlight dips in your workforce utilization rate and identify team members that are being underutilized. Time is money, and if team members are being underutilized, it’s costing your organization money. Accurate forecasting will help keep your team working at your desired capacity, and ensure no one falls through the cracks and becomes an expensive mistake.
How will a new project, or change in a current project, impact our workforce strategy?
Things change frequently in construction. It’s the nature of the industry that dates frequently get shifted and changes in project scope happen and adjustments need to be made. Being able to identify, in real-time, the impact that project changes will have on your workforce plan and strategy helps to make informed decisions in regards to how those changes are managed to remain as profitable as possible on each project. The same goes for new projects. Being able to see the impact on your workforce plan allows you to better plan new projects to mitigate risk and increase productivity and profitability.
Is my workforce spread too thin?
The flipside of underutilized team members is overworked team members. Being able to identify periods of high utilization can help to scale back project allocations where needed. It’s typical in construction to have your team working at a pretty high utilization rate, but running your team on high for too long can lead to unhappy workers, heightened stress on the jobsite, and potential safety risks. Workforce forecasting helps to identify these high utilization trends so that leadership can take action to right the ship ahead of potential conflict. Visit this page to learn more about the Bridgit Bench Forecasting Dashboard.
Do we need to hire?
Staying ahead of recruitment to mitigate future project risk can significantly impact your bottom line, especially in the current competitive hiring environment in construction. With nearly 5.1 millions construction and extraction workers expected to retire in the coming years, that competitive environment will only be amplified when looking for skilled workers. Accurate forecasting can help to identify projects that will require new team members to keep you ahead of the competition when the time comes.
“To get the most out of our budget, we need to know when we need to recruit someone to staff a job. Because we have greater clarity about what stage in the project we are on and when resources will be available for another project, we can be confident regarding recruitment decisions.”
— GRACE PALADINO, DIRECTOR OF HR AT SKYGRID CONSTRUCTION
Why is workforce forecasting important for construction?
Construction is a long game. With projects often extending for months or years, knowing exactly how a new project will impact your business, or how a dip in your workforce utilization will affect the profitability of your company is crucial to playing the long game successfully.
Today, more and more general contractors are migrating their workforce planning and forecasting to automated software. This push comes from a desire to plan, execute, and manage projects and their respective allocations more effectively and productively.
Not only does using an automated system to forecast your workforce supply and demand help to improve a company’s profitability, it can also help to enable collaboration within your organization. When everyone on the team has access to the same information it helps to ensure that your team is equipped to contribute to the decision making process and understand the impact those decisions will have on the workforce planning strategy.
Labor shortages are also a consistent challenge for the construction industry. The Bureau of Labor statistics has indicated that the number of job openings in the industry has almost doubled since 2014, with only a 14% increase in new hires. It’s important for general contractors to forecast their workforce needs and be proactive instead of reactive in regards to their recruitment process. The ability to identify gaps in the workforce early allows contractors to stay ahead of their recruiting, which can make the difference between a good and bad hire in such a competitive environment.
Digital technologies and construction software, like Bridgit Bench, provide real-time, accurate forecasting data and insight into utilization rates to make informed decisions around project bidding and allocations. This insight can help to keep the project pipeline on track and has quickly become a competitive advantage for general contractors that have migrated away from their manual processes and welcomed the digitization of core operations.
Bridgit Bench is the leader in construction resource management and workforce planning. Our solution helps operations managers better understand their workforce forecasting with clear-cut, highly visual utilization reports and allocation breakdowns on upcoming projects. The utilization reports can be filtered by team, division, region, or any custom people field. They can also be used to compare utilization by different people properties. If you wanted to see your utilization rate for a specific region and further compare by title, Bridgit Bench is the right tool for the job. The forecasting dashboard can also be viewed up to 5 years out to stay ahead of any potential drops in your workforce utilization.