As a construction professional, you’ve heard a great deal about productivity, particularly a lack thereof, in the industry. We are all too familiar with that infamous McKinsey Global Institute report. The gist?: labor productivity in construction has remained relatively stagnant over the past two decades.
With the constant battle of labor shortages still plaguing the industry, contractors are trying to find ways to get the most productivity out of their entire project teams while ensuring safe jobsites and satisfied clients. While it’s clear that construction productivity has suffered in the past, we have a more positive outlook. Since the launch of the report in 2017, we’ve been able to witness firsthand improved productivity in construction, driven in large part by innovation and forward-thinking companies who have clear digital strategies that enable their digital transformation.
“In recent years, we’ve been quick to criticize the construction industry’s safety record and low productivity trend. However, new evidence suggests the situation is improving; projects are becoming safer and the labour force is becoming more productive due to a commitment to innovation and process change." - Az Jasat, Senior Customer Success Manager at Autodesk
That’s not to say that we still have a long way to go. Contractors are on an eternal quest to continually make incremental improvements to labor productivity. Even a small increase has the potential to make a big impact on construction companies’ bottom line.
As we’re approaching the end of our 2020 Digital Construction Playbook, today we’ll take a look at strategies all firms can take to enhance labor efficiency. So far, we’ve covered a lot of essential topics in our series, including construction documents, RFIs, change orders, construction scheduling, and safety and inspection software. All of these topics are part of the seven key performance indicators (KPIs) identified by a study from Autodesk and Dodge Data & Analytics that are critical to project success. Interested to learn where you stand? Check out our Construction Health Check. Taking this free 15-minute assessment will provide you with a personalized view of how your firm benchmarks against other construction companies when it comes to these seven KPIs.
Without further ado, let’s dig into the leading digital strategies to improve construction productivity.
While labor productivity is increasing, on the whole, even minor inefficiencies can result in staggering costs. Take rework due to poor document control as an example. As that well-known McKinsey study revealed, lagging construction productivity cost the U.S. global economy $1.6 trillion a year. It’s safe to say that deceptively small gaps in productivity add up to exorbitant costs, which is why we all must work to close the gap.
But first, let’s go over the results of the report when it comes to construction productivity. In the Dodge study, contractors highlighted the top factors that they felt decreased productivity, helping to reveal the root of inefficiency issues. Take a look:
When it comes to the top factors decreasing construction labor productivity, the majority (62%) of general contractors believe it’s due to a lack of coordination and communication between team members. This figure is further supported by data from a recent FMI study, Constructed Disconnected. The report found that, on average, construction professionals spend 35% of their time (over 14 hours per week) on non-productive activities, including looking for project information, conflict resolution, and dealing with mistakes and rework. The combination of these findings suggests that better communication between all stakeholders, including access to accurate and timely information, is a critical component to improving productivity.
While 56% of trade contractors also cite poor coordination and communication as negative impact on productivity, over two-thirds (68%) claim that poor schedule management is the top contributor. This makes sense, as subcontractors’ work is more likely to be impacted by schedule changes on a daily basis.
On a similar note, the Dodge survey also asked trade contractors about their use of prefabrication – a process gaining traction to reduce jobsite risk and improve labor productivity and schedule maintenance. Today, only 14% of trade contractors reported prefabricating more than 50% of their work in the shop versus in the field. Despite this, 70% recognize that prefabrication at least moderately improves labor productivity.
The quality of contract documents is another productivity challenge identified by both general contractors (61%) and trade contractors (45%). Some contract types continue to impede productivity, impacting the bottom line of projects. When each party seeks to provide as much legal insulation as possible, it makes it more difficult for team members to engage directly with each other earlier in the project, increasing the likelihood of errors and discrepancies that lead to inefficiency.
For construction firms, continuous improvement is key to increasing productivity. The Dodge study highlighted some of the leading causes of productivity loss in construction. With these pain points in mind, companies can begin to craft a winning digital strategy to improve efficiency where it matters the most.
With this in mind, we’ve also reviewed some of the most innovative research on construction productivity and highlighted the best ways to set your projects and company up for success.
Chances are, your projects still rely on many (if not a handful) of manual processes that create unnecessary administrative work and are prone to error. Even if you’ve made significant steps to remove antiqued systems like paper, many companies are still heavily utilizing non-connected tools like Excel and sending documents back and forth through email attachments. Beyond wasting time, even companies like Fannie Mae know that “honest” mistakes from a manual system like Excel can result in millions and even billions of dollars lost. While stakes at your company may not be as high, if you’re not utilizing automation to control mistakes, you could still lose out on valuable time and profits.
When construction workflows are automated, it can reduce significant administrative burdens and streamlines communications and tasks. Automation includes notifying the relevant person when action or approval is needed – improving the speed of response. While automation certainly improves efficiency, allowing staff to accomplish more and faster, it also helps to reduce common human errors that can add up. With the combination of innovative people and technology, automation can help them streamline those issues better with fewer mistakes.
When it comes to increasing productivity, having a strategy with all project members adopting technology can be one of the fastest paths with the biggest payoff. In addition to looking for tools that automate important workflows, here are the key types of technology to consider when looking to improve coordination and communication:
Most of the tools listed above, particularly a connected construction platform, will help provide a single source of truth for all project information and data. However, the sooner the whole project team can access data and collaborate in a single place, the better. It goes without saying that improving planning will improve productivity. Nonetheless, when teams have one source of accurate data from the start, they are able to enhance communications, mitigate issues faster, and reduce mistakes and rework during the building phase.
Better yet, more data in the planning processes means contractors can leverage this data in future projects to continue to improve the efficiency of their operations. Once common documentation standards are set, teams should also strive to analyze data from previous projects to identify and eliminate barriers to productivity. By developing metrics to determine how accurate current planning processes are, contractors can then set realistic benchmarks to ensure improvement.
Do you have individuals or teams who are helping to push for more productivity and improvements on projects? Don’t let these efforts go unrecognized. It’s important to celebrate and support those who are making momentum to change processes and implement technology to drive significant business results. These are also the individuals you cannot afford to lose amidst a labor shortage.
As we mentioned above, the Dodge study revealed that only a small percentage of trade contractors are routinely utilizing prefabrication, despite knowledge of its positive impact on productivity. With a large project comes repetition, and prefabricating many repetitive elements can save immense time for your employees rather than having to build everything on site, opening the door to higher levels of risk.
In the study, participants revealed that the top obstacle to prefabrication is that it’s not considered during the design phase. If you’re looking to implement more prefab on your projects to improve construction productivity, ensure it’s a key focus at a project's earliest stages.
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