It’s exciting to see a construction project come to completion, especially when it’s on time and within budget. But sadly, delayed jobs that go way over budget seem to be the norm in the construction industry.
So where’s the problem?
A lot has to do with poor construction productivity. So let’s take a quick look at:
- Why you should measure your construction productivity rates
- How to calculate it
- Tips for how to improve construction productivity
What Is Construction Productivity and Why Does It Matter?
Here’s the basic formula for determining a simple construction productivity rate:
Construction productivity = Output / Labor hours*
*Keep in mind that there are tons of ways to calculate productivity for every aspect of construction, but this is one of the simplest ways to calculate overall productivity for a project.
Here’s an example…
Let’s take two identical 2,400 sq. ft. 2-story homes. Each is built by a different contractor. One took a total of 2,000 man-hours to build, the other took 1,500 man-hours to build.
Which had a better productivity rate? Obviously the second one.
But think about what the second contractor achieved by having a better productivity rate.
- Fewer man-hours mean lower labor costs and a better chance of coming in under budget.
- Fewer man-hours to accomplish the same task also means they’re more likely to complete the project before the deadline.
That shows why increasing your team’s productivity is such a big deal! It leads to projects that meet deadlines and don’t go over budget.
Check out some more benefits of measuring your construction productivity in the next section.
Benefits of Measuring Construction Productivity
- Makes it easier to calculate profits and/or losses: If you don’t calculate your productivity rate, it’s difficult to know what’s contributing to your profits or losses.
- Shows you if resources and time are getting wasted: To increase productivity, you first need to know where you are least productive. Measuring your productivity shows you exactly where time and resources are being wasted.
- Helps you make adjustments to counter lost productivity: If a project starts getting delayed, your productivity rate will help tell you why. Then you know where to focus your efforts to get things back on track.
- Helps you determine the effect of tools and equipment on productivity rates: New equipment can be expensive. But when you measure productivity, you can quantify your return on investment by seeing exactly how the equipment helps increase productivity.
Measurable productivity builds trust and helps you win more projects: Provide clients with productivity reports and show them your team doesn’t waste time. This builds clients’ trust that the project will finish on time and within budget.
How to Calculate Productivity Rate in Construction
Here are several different ways to calculate your productivity on construction projects.
Measuring Construction Productivity: Compare your current labor hours per task or by unit with industry standards and with your past productivity.
Let’s say that on a past project your team installed 1,000 sq ft of hardwood flooring and it took them a total of 100 man-hours. That means one man-hour equaled 10 square feet of flooring.
On your current project, your team installed 1,000 sq ft of hardwood flooring in 90 man-hours with the same cost in equipment. Now, each man-hour equals over 11 square feet of flooring. Your productivity rate has gone up!
Calculating Productivity of Construction Workers: This is similar to the first method but looks at individual workers and their overall cost on the site. Use this to help you choose the most productive subcontractors and employees.
It’s also good for evaluating the overall productivity of higher-paid, skilled workers vs. lower-paid, unskilled workers.
An unskilled worker getting paid $15/hr might take 10 hours to complete a task and use $200 in materials. That means the total cost for that worker to complete the task was $150(labor) + $200(materials) = $350.
But a skilled worker getting paid $35/hr might take only 6 hours to complete the task and use just $100 in materials. Their total cost is $210(labor) + $100(materials) = $310. Plus, since they took less time to complete the task, your project can move ahead faster.
Measuring Productivity Using Construction Management Software: Manually tracking all the man-hours, wages, and material costs is tedious and takes a lot of time.
That’s why most modern construction firms use some type of construction management software. Not only does it help track productivity, it even helps you increase productivity!
A great example is Cedreo home design software with the CostCertified integration.
- Keep track of your home designs, estimates, and final costs.
- Easily update total costs and labor for each part of the total project — flooring, lighting, kitchen packages
- See the true cost for each stage of the project so you can track productivity and create more accurate estimates in the future.
Want to learn more about how to increase productivity in construction? Learn some pro tips in the next section.
Tips to Improve Construction Productivity Rates
Ready to improve your construction productivity? Then follow these 5 tips.
1. Improve Planning to Increase Productivity
Increased productivity starts with better planning. The better you plan ahead of time, the more productive your construction site will be.
So right from the start of the planning process, get everybody on board. Meet with the client, the architect, the general contractor, and anybody else who plays a key role in the project. Get their input on the projected timelines and ask for suggestions to help the project run smoother.
Plan work schedules carefully. Make sure key people know who is supposed to be on the site each day, what they should be doing, and what supplies they need to complete the task.
It’s also important to carefully plan material deliveries. With supply chain issues and extended lead times, this can be a real challenge. So make sure you order materials ahead of time so they’ll be on-site when the workers need them.
And don’t forget to plan for unexpected delays. Bad weather, change orders, and rework can throw a monkey wrench into your plans, so make sure to leave a buffer in your overall schedule.
2. Set Goals and Reward Crews When They Meet Them
While planning the project, establish clear benchmarks or milestones. Then set a specific goal date for meeting those goals.
This makes it easier for you as the project planner to track how you are doing with sticking to the schedule. It also gives your clients a clear vision of how long each stage of the project should take. And finally, it helps workers and subcontractors understand how their tasks affect the overall project.
Milestones also give you a way to reward your crews. Challenge them to reach key milestones ahead of schedule and then reward them for doing so. This adds an extra level of motivation to help keep productivity high.
3. Clearly Communicate to Avoid Delays
Avoid productivity losses by promoting open and clear communication amongst key stakeholders.
- Have a clear channel of communication — everybody should know who to talk to when they have a problem or suggestion.
- Help your clients understand the project’s scope and design. Use 3D visuals, (like ones you can create with Cedreo) to help them envision the final project. This clear vision of what you’re proposing leads to more effective feedback during the planning stages and fewer change orders during construction.
- Use cloud-based construction software to keep your entire team on the same page. Workers and subcontractors will know what tasks need to be done each day. And if there are delays and change orders, you can instantly update your team and collaborate to adjust to the changes.
4. Measuring and Improving Productivity Using Technology
The construction industry has been notoriously slow at adopting new technologies. That could be one of the reasons why construction productivity has stalled while productivity in other industries continues to increase.
Don’t get stuck in the past. Look for ways to leverage technology to track and improve your productivity. You’ve got so many options for doing that:
- Easy-to-use design programs can shave days or weeks off the project planning period.
- Estimating software helps you create more accurate budgets and timelines.
- Project tracking software lets you track costs, man-hours, and manage subcontractors in one place.
*One of the best options for residential contractors, remodelers, and designers is Cedreo home design software with the NEW CostCertified integration. Create an entire home design in just 2 hours, stunning project proposals, and accurate estimates with this all-in-one construction productivity solution!
5. Train and Develop Talent
Labor shortages in the construction industry are the new norm. Having to constantly deal with a limited workforce and training new employees can take a big bite out of your productivity.
But if you can improve your employee retention and help your employees develop their skills, your productivity will skyrocket.
Here are a few tips:
- Reward workers for improved productivity and quality work. This motivates them to improve their skills.
- Offer on-the-job training and courses workers can take to develop their skills and increase their earning potential.
- Choose your lead workers and foremen wisely. Look for ones who don’t just have the necessary construction skills, but are good managers.
- Offer employees growth opportunities within your company so they’re more likely to make it a career.
The Bottom Line
Your construction productivity doesn’t have to stall out. There’s a lot you can do to improve productivity on your construction projects.
- Learn how to measure your productivity.
- Identify areas where you can improve.
- Plan and communicate wisely.
- Use software like Cedreo with the CostCertified integration to streamline your project management.
Use those tips and you’ll finally start seeing more of your projects end on time and under budget!