BY BOB MIODONSKI
PUBLISHER AND EDITORIAL DIRECTOR
WHENEVER THE government releases statistics that boast about how productive American workers are compared with the rest of the world, I have to shake my head. Well, of course.
Most of the people I know are working longer hours at companies that employ fewer people than in the past. Working evenings and weekends has become part of the job, in many cases.
I remember as a kid hearing about the four-day workweek of the future, and how technology was going to make everyone's job more effortless. Then again, the price of electricity was supposed to dwindle to almost nothing by now, and all the toll roads would be paid for and free, right?
All that being said, productivity in your contracting company is an issue that deserves your attention. We've written about productivity in this space before. In fact, when manufacturers ask me about the biggest issues facing contractors, I usually mention productivity in the top three.
The challenge for many contractors is not one of working any harder or for longer hours; it's a matter of working smarter. The 2007 Contractor Productivity Survey from industry consultant FMI points out truths that may have been obvious to you if you hadn't been working too hard to notice them.
One truth you may well have noticed is how difficult it is to meet your labor budget on a project. Contractors spend more on labor than estimated, on average, according to FMI's survey.
The added man-hours wasted on the jobsite and the reduced dollars on the bottom line are just a couple effects that result immediately from a lack of productivity. FMI points out another longer-term consideration. With the difficulty in attracting young people to the industry, not improving the productivity of the people you already have will only hinder your growth.
When I talk to others about the importance of productivity to contractors, I base that on the amount of space we devote to the subject in the magazine and the number of workshops on the topic we attend at industry meetings. I compare it to the amount of attention the safety issue used to get.
Still, while you may be hearing and talking more about productivity these days, most of you still are spending more on making your employees safer than you are on making them more productive. Less than 30% of contractors have a formal plan to improve productivity, FMI says, even with the potential of savings in labor costs.
A bigger difference from safety is that the construction industry does not have one metric that everyone accepts to measure productivity. Allowing your employees to be more productive doesn't have to be a losing battle, however.
The biggest similarity to safety could be that the commitment to improve productivity must come from the top and be implemented throughout the organization. Better leadership and management, more training, changing behavior and improving processes such as job planning can mitigate the biggest obstacles to productivity, FMI says. That all has to start with you.
Your commitment will require more than throwing money at people. Just 19% of the contractors in FMI's survey report that financial incentives had a substantial impact on productivity, making it clear that bonuses without a game plan will not boost productivity.
And, to return to where we started, asking your people simply to work harder won't do it either. The contractors in the survey that report the most improved productivity had a much higher ratio of both project and field managers to revenue than firms that say they had substantially decreased productivity. FMI concludes that these results reinforce another obvious truth — it's much easier to under manage projects than to over manage them.
A typical response from contractors in the survey is that they have too much work right now to worry about improving their productivity. They're not going to turn down jobs to make their employees more productive.
Still, we agree with FMI's finding that if you make a long-term commitment to improve productivity by investing in employees and processes, you'll see real results in real dollars.