Labor Planning at Tessiers Mechanical Contractors bolsters Productivity

Tessiers Mechanical Contractors can control two things on any given job: labor and materials. The unfortunate truth is that labor is one of the biggest liabilities on any project, too. For example, 10 years ago a 1:1 profit fade to profit margin ratio was common.

“We saw a lot of that was due to labor,” Vice President Bill DeNet said. Faced with that reality, Tessiers made a decision.

“Why not implement a platform like RIVET?” DeNet asked. “[Labor] is our greatest area of opportunity.”

After prioritizing a Workforce Management platform and doubling down on process discipline, Tessiers has seen a massive shift in job profitability and Labor Productivity.

“We were 1:1,” DeNet said. “The past four to five years, we’ve been 10:1 in profit gain to profit fade on jobs. A lot of that comes from our labor savings.”

Tessiers has been kicking around South Dakota for 105 years. The company has worked everywhere from Texas to Oregon and all over the Midwest, lots of it hospitals and manufacturing facilities. To support that footprint, it has a handful of offices spread across the region.

Sioux Falls is home, and, with the exception of the Rapid City location near South Dakota’s Western border, its other shops are an hour’s drive away, give or take: Mitchell, Brookings and, across the Eastern border in Iowa, Sioux City.

Watch the Tessiers leadership team video interview here:

Advanced labor operations requires a platform

Effectively and efficiently managing labor with one office is a challenge for most contractors. With a distributed workforce like Tessiers, keeping tabs on everything would be impossible without a Workforce Management platform built for self-perform contractors. RIVET empowers the team’s project managers to collaborate across their disparate locations, and head off labor shortcomings earlier.

“You’re seeing it before it ever gets to the platform,” Operations Lead Shawn Kast said. In turn, this means Productivity killers aren’t as much of a factor anymore. “Guys have adjusted their Forecast and, by using their true actuals, they’re adjusting Forecasts down.”

Kast described a common situation that only happens when you Labor Plan every job. When a Forecast is adjusted down and there’s 1,000 hours left on the job, the foreman will set the Forecast to half that. And then, they’ll tell the general contractor or customer what’s happening and why: to save on the project or maybe even increase profitability. From there the Forecast request goes to Kast for approval.

“We’ve had a lot of good, good jobs like that lately where we’re actually showing we’re gonna beat [our] hours,” Kast said. “So their Productivity is up.”

Scenes from the Tessiers warehouse and a job site in Sioux Falls, SD:

Start with Labor Planning

Labor Planning every job also gives Tessiers early warning signs of where profit fade could occur due to over-allocating resources, as a team. Typically the red flags are schedule compression and equipment delays. It’s easy to get stuck in tunnel vision and only focus on your scope of work, too. The reality is that every other trade affects what a mechanical contractor can get done and when.

“That comes from sheetrock,” DeNet said. “It comes from walls. It comes from everything our equipment and material touches.”

Labor Planning at Tessiers is done before a bid is even won. Working that far in the future means that, depending on what kind of variables pop up along the way, “You’re controlling the narrative of how many people you need, what resources you can allocate,” Kast said.

“You’re being responsible with your workforce.”

DeNet agreed. Tessiers uses those schedules to determine whether or not the contractor will respond to a proposal request.

“We have to be responsible with [labor] so we’re not over-allocating resources and essentially running people out the door because we’re grinding them into dirt,” DeNet said.

“When we’re doing that,” DeNet said, “we know where our people are the most successful and most fulfilled on the projects we’re going after. We’re able to do what’s best for the business with the tools we have at our disposal.”

Tessiers’ impressive warehouse houses specialized welding and sheet metal teams:

Project leaders vs. project watchers

At a high level, RIVET influences the communication between Tessiers’ project managers and field leaders. On any given week, a field leader can see what’s happening on any given job. The expectation is that the two are discussing what’s happening with their Labor Plan as much as a month out.

“The idea of being a project leader and not a project watcher,” DeNet said, “that requires that amount of communication and a tool to influence that. So our field leaders can see where the roadmap is, and be aligned with the PM on what the plan is.”

Now it’s common for field leaders to tell Kast that next week they don’t need the four additional workers allocated to their crew. That half the amount will suffice.

“That is a drastic change from where we were a decade ago,” DeNet said. “We’re more productive with six than we are with ten.”

Sometimes it’s due to variables like the schedule, job site constraints or amount of materials onsite.

“But when it comes to planning our labor,” DeNet continued, “RIVET has been a critical asset for us to really improve the team concept between the PM and the field leader.”

Project managers, service leaders and field leaders rely on the RIVET latform for Workforce Management:

Project teams control labor costs

Now? PMs, field leadership and foremen make the manpower moves themselves because they can see the Labor Curve versus their actuals and start ramping down early. It happens on an almost weekly basis.

“The PM will know before Shawn does,” DeNet said.

Kast agreed.

“The PMs are highly involved in manpower, it’s not just me or [Bill] anymore,” Kast said.

All total, it’s as many as 12 people managing labor. They come to Kast with their plans for labor transfers and once the moves are made, he reviews the activity in RIVET. It frees him up to invest his time elsewhere.

“That’s one of the greatest wins,” DeNet said. “Now we’re removing that burden from one person and our project managers are taking that on because they know exactly what’s going on on their jobs.”

For project manager Paul Hanisch, the ability to easily sidestep a sometimes literal game of telephone between several foremen and project managers like himself is a huge accomplishment. RIVET’s baked-in information transparency makes a considerable difference too.

“Everybody can see what’s expected,” Hanisch said. Hanisch has worked in HVAC for 27 years, and has spent the vast majority of them with Tessiers. His labor look ahead runs between three and four weeks out, because if a two-person job needs six extra workers at peak, he needs that much time or more to accommodate the transfer.

“If labor isn’t figured out, it’s chaos and a lot of lost Productivity.”