Are you losing profit in the last 20% of your projects?

Do you know when your labor is peaking on every project? Do your project teams and field leaders know as well?

It means you’re aware of your labor curve, and that you have a good labor plan for tracking to that point against your labor budget and project timeline. You know that, at your peak, it’s time to reduce the number of people on that job.

There is a common opinion that “construction is hard.” And it is hard. Everyone shares in the pain, and that’s the norm.

If your projects are lacking a labor plan, you’re unaware of the peak, and your projects are lacking an exit strategy, the impact might look like this:

• The job loses a bunch of money without transparency into how labor is managed. “I guess construction is hard with no other explanation.”
• Superintendents and project managers have no idea they screwed up and will blame the estimator.
• Everyone is working really hard, but no one has any idea what’s causing the overages.

A well-executed Workforce Management strategy can put checks and balances in place that help identify the problems as they arise. With that kind of clarity, you can pinpoint when project extensions have nothing to do with you, and instead are an issue driven by the general contractor.

Fast-forward to a job site in progress. You’ve just reached 80% complete. Gary says this is where the project is vulnerable and the discussions you have will determine success or failure. Are you going to keep your projected profit or experience the dreaded margin fade phenomena?

“This is where you go, ‘oh shit’, we’ve got a problem, and it’s too late,” Gary said. “You’ve created a disaster, and now you’re in the last 20% of the job, and you think you’re a lot farther ahead and the deadline hasn’t moved. Now what? You have no choice. You must add labor. Now you’re walking the plank. You must bring another supervisor and crew, they need to learn the job site, this is a big learning curve. Not only are you pumping people into this job, but they also aren’t 100% productive when show up. Now you’re throwing money at it because you have to get it done. Tools, equipment, labor, safety supervision. Everyone is pulling their hair out? asking what the hell happening. The easy out is blaming it on a bad estimate. This is typically simply not the truth. There is a lack of awareness that the labor was mismanaged or the people responsible for the poor discussions aren’t going to step up. It’s easier to blame the estimate.”

By having a labor curve for every project, your teams will be monitoring your labor up to the peak. This allows them to focus on controlling your labor budget prior to peak. When the peak arises, they need to know it’s time to reduce the number of people on that job. But how can you do that with a lot the work still available? Sure, they could keep their crews for an extended period. But why wouldn’t you do that?

When your project teams get to the peak, they need a punch list:

1. Make a detailed list (punch list) of what still needs to be done.

2. Assign labor hours next to every line item.
Make sure that assessment accurately accounts for logistics to complete tasks, not just the tasks themselves.

3. Determine the total number of labor hours needed.
Compare this to your budget to have a clear understanding of where you are and what you have left. You may find you already have a problem if your ramp up labor plan wasn’t well defined to begin with, and you weren’t monitoring your labor curve.

4. Set goals to get the work done in an orderly fashion.             

Obviously, Gary would recommend MEP contractors use the RIVET Workforce Management Platform for labor planning. But you need to be ready to use it properly.

With RIVET, you are now managing your labor in real time, with controlled transparency for everyone to see, which turns into a very high level of collaboration.

”There is no other way to monitor your labor in real time other than a platform like RIVET,” Gary said. “Contractors ask me, what do you mean real time? Do you mean within a day? Real time is real time, within a second. You get to be so proactive at managing your labor and you start to wonder what you would ever do without it. If you took RIVET away from the contractors that use it, they would struggle and most likely crumble. It’s becomes so engrained in the workflow processes that it’s hard to manage without it., Moreover, if you integrate it with your financials, it’s an indispensable tool.”