We hear it all the time: “We have more projects than we can get to.” “We don’t have enough boots on the ground to get the jobs done.” “We can’t take on more work because we’re struggling to keep up.”
The construction labor shortage has been a hot-button issue for well over a decade.
After losing over two million jobs during the recession of the late 2000s, the industry never fully recovered. Adding fuel to the fire is the fact that over 20% of the construction workforce is planning to retire by 2028.
With more stimulus funding on the way to help the industry recover from the COVID-19 pandemic, there’s a tidal wave of growth on the horizon and a major shortage of skilled workers to meet demand.
But that’s just part of the picture.
Increasing Material Costs
Coupled with the construction labor shortages are skyrocketing material costs. The same 2x4 that costed $2 before the pandemic hit is now $8.
The numbers are staggering:
Softwood lumber and natural gas prices have soared, up 79.7% and 76.2% (respectively)
Iron and steel prices have shot up as well, up 22.0% compared to the same time last year
Copper prices are up over 80%– a big hit to plumbing and electrical contractors
There are a host factors that have created the perfect storm for these input price increases, and many tied to the pandemic. COVID-19 closed sawmills and other production businesses for construction materials, and lumber production dropped 50% early in the pandemic due to a forecasted decrease in demand.
Add that to an already insufficient domestic production of softwood in the United States, and it’seasy to see how we got to where we are now.
What’s more, the forecasted decrease in demand turned out to be shortsighted. The phenomenon of “do-it-yourself” projects took off while everyone was stuck at home, and so did single-family home prices, increasing by an average of $24,000 due almost solely to lumber shortages.
You Can't Control the Industry, But You Can Control your Efficiency.
With all the factors at play – almost all of them beyond the control of a single construction company – how do you win?
You can’t control how many skilled workers are available for projects orpredict the rising prices or shortages on materials, but by making crews more effective on the jobsite, you can control one of the single largest costs to your company: labor productivity.
Picture this: construction labor costs are 60% of a project. You’re already operating on razor-thin margins, so even a 3-5% savings in labor productivity can lead to huge returns across your projects.
Besides that, your jobsites most are likely behind when it comes to updating progress and sharing that information with your back offices.
If you can’t see what’s happening on your jobsites in real-time, don’t know your production goals for the day or aren’t even sure which workers are on what project for a given day, you’re already behind.
The Only Way is to Adapt, i.e. Digitize.
We’re at an inflection point for construction companies: adapt or get left behind.
If you’restill using paper and pencil to track your labor and production units across your projects, there’s a huge opportunity to digitize and realize cost savings in the tens of thousands, hundreds of thousands or even millions of dollars across all your projects.
Here are just a few ways digitizing labor and production tracking across jobsites can lead to huge returns almost immediately:
You’ll get back 3-5% in construction labor savings – easily – by digitizing time tracking and eliminating rounding errors
You’llgive your jobsite supervisors back up to an hour per day of time in manual paperwork to focus on getting the project done
You’llcut down on back-office admin time by more than 50% by eliminating the need to enter in jobsite time data manually
You’llbe able to more accurately track labor and production cost codes on a daily basis so you can deploy your workers on the jobs they’re needed on
When you don’t have the resources to work harder, work smarter.
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1. “Importance of Measurement in Labour Productivity in Construction,” by the Department of Civil Engineering at Patil Institute of Technology (PVPIT) in Maharashtra, India.