Understanding utilization for general contractors

Understanding utilization for general contractors

In an industry where labor costs can account for 65 percent to 85 percent of your actual job costs, there are few metrics more crucial to success in construction than workforce utilization.

Time is the limiting factor for construction. No matter how efficient you are, there’s only so many hours in a workday.

Utilization lets you know how much of your workforce’s available time is spent on billable work.

Taking away vacation time and public holidays, most construction employees still get at least 38 to 40 working hours in each week, with 23% of “waged and salaried” employees working overtime hours.

Utilization is a measure of how much of this available time is actually used in productive work, and understanding utilization means you’re equipped with the skills to do more with less. It gives a great level of insight into your company’s profitability and construction workforce management, such as:

  1. A consistently high utilization rate means that your workforce is at risk of being overworked or spread too thin.

  2. A low utilization rate for an extended period of time means that you need to bring in more projects.

  3. Tracking utilization for each skill and employee type (project, manager. superintendent) helps you plan when you need to hire.

  4. Tracking utilization by different skill sets shows you demand for different services.

  5. Utilization above 100% can imply that too many projects have been taken on, or a need to expand your workforce.

Understanding your workforce utilization helps to better understand project costs, map demand for different skills and certifications, and develop your workforce.

How does an operations team poorly position its workforce? Some of the common causes ForConstructionPros identified are:

  • Tasking inexperienced workers to complete difficult jobs

  • Creating a “make-shift” crew without considering the individual members’ talents, skills, personalities, etc.

  • Putting people on projects that others are better suited for and skilled to address

  • Placing too many workers on a project or crew, thus increasing the likelihood that some workers will be standing around

  • Placing too few people on a project or crew because there aren’t accurate productivity rates

Some contractors do a great job of optimizing their workforce with knowledge and skills to strengthen performance, but for an industry in need of a new generation of workers, it would seem that treating your team as your most important asset might just help your struggle to fill gaps in your workforce with whoever is available.

Managing utilization

There are a few different approaches construction companies can take to manage their utilization.

1. Use better construction workforce management software

There’s only so much you can do with a spreadsheet before you begin to run the risk of errors and inaccurate data. Your construction workforce planning should be built on a foundation of accurate data to avoid overworking or underutilizing your workforce, while missing opportunities to develop skills and provide meaningful work.

Software solutions like Bridgit Bench were designed to provide clarity over your workforce plan and provide accurate data to equip you with the information you need to get the most out of your project teams. There’s no better way to judge how a project will perform than to look at your project history to see who key performers were and what impacted the success of those projects. Being able to access your entire project history is just one of the many benefits of improving your tech stack with better construction workforce management software.

2. Fit the right people to the right projects

This isn’t easy, and sometimes it’s impossible. The construction industry is in need of workers and sometimes gaps need to be filled, but it’s important that you make a strong effort to connect people to projects that will allow them to put their best foot forward. If your workers are good at what they do and are happy doing it, they tend to stay longer, work harder, and produce better results.

When the time does come and you have to put someone on a project role that isn’t a good fit, be upfront and work to support them by providing resources to help them see the project through.

Putting the right people, in the right place, at the right time

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3. Keep track of employee skills and experience

It’s similar to coaching. A coach will keep track of different players’ abilities and experience in different game-time situations so when a player goes down, or a specific scenario presents itself, the coach knows exactly which players can step into those roles for continued success.

4. Staff lean when possible

This isn’t a problem for most construction companies – as most workforces are spread thin these days – but there does tend to be a tendency to throw extra people at difficult scenarios and projects. This tends to lead to idle hands walking the job site being more of a distraction than anything. Knowing which people are suitable for which work helps to keep your teams lean and profitable, and removing those distractions helps keep them focused on the tasks at hand.

5. Minimize “on-the-bench” time

Bench time is simply hours that are worked that aren’t billable to a project. This could mean there isn’t enough work, skills and experience are lacking, the workforce hasn’t been delegated properly, or an error in the current workforce plan has led to people “falling through the cracks.” Tens of thousands of dollars have been lost within weeks simply because of mislabeled job titles in a spreadsheet. Bench time is unavoidable in most cases, but you can minimize it. Better construction workforce management practices can ensure that your teams are optimized for success.

In the case that skills and experience are lacking, use this time to train or provide the experience needed to utilize people later down the road, at even better rates.

Bridgit Bench is better construction workforce management software. It was built for construction and allows you to effectively track your workforce’s experience and skills while providing the clarity you need to find the right people for the right project. It provides visualizations and reporting that spreadsheets simply can’t. Leading general contractors across North America are better utilizing their teams with Bridgit Bench. Get an in-depth look at all the benefits Bridgit Bench provides. Also, find out about the latest news and updates for Bridgit’s new investment ventures.

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