How Labor Data Supports Productivity for General Contractors 

Labor costs make up a significant portion of most projects’ budgets. Even so, many general contractors (GCs) struggle to accurately track these costs as the project progresses. Far too many firms have notable latency when it comes to labor data, often waiting for billing from subcontractors to find out where this key component really stands.

Fortunately, things are changing. With technology, tracking and analyzing labor data is getting easier for general contracting firms. Whether they self-performing work, partner with subcontractors or both, having visibility into labor metrics helps the firm deliver projects on schedule and on budget — while protecting their margin. 

Why It’s Worth Investing in Generating and Tracking Labor Data

Keeping a finger on the pulse of labor costs requires work from the GC’s team. So does managing underperformers and rewarding high performers. Even so, all of this investment often quite literally pays off. 

If the GC has a self-performing arm, tracking, managing, and improving labor efficiency helps them move projects forward faster while keeping costs down. Whether they internally handle early project needs like carpentry and concrete or late-stage to-dos like paint and finish work, it all costs the firm labor hours. Optimizing the output for those hours improves their margin while helping the project stay on schedule. 

When it comes to managing the labor performed by subcontractors, the effort is equally important. Monitoring productivity helps the GC perform its key function as project manager. It can also benefit the trade partner. More diligent tracking can help validate performed work faster, which in turn helps the subcontractor get paid faster. In short, with good labor data, everyone wins. 

When the GC firm can track precisely what hours were spent and what was accomplished during those hours, they unlock the following benefits.

Better Estimates/More Accurate Bids

Estimators often use established benchmarks like RSMeans data to set labor productivity rates for the project. They might allot 30 hours to hang 1,000 square feet of drywall, for example. In actuality, though, it might usually take the GC’s self-perform team 35 hours. 

Tracking productivity data illuminates that difference for the GC, establishing a feedback loop to get that data back to the estimator. This allows them to hand off a bid with a labor budget that’s actually workable for the project staff. 

As the GC develops a bigger labor data pool, its estimating team can extrapolate further. It might learn that certain types of projects (e.g., high-rise construction) often cost roughly X in labor per square footage. That gives them a solid starting point that reflects what the self-perform team can actually accomplish. 

Better Project Tracking and Margin Protection

Once people start working on the jobsite, labor data becomes important in a new way. Analyzing how the project is trending against what’s been budgeted helps the GC assess the project. Is it on track to make money? Do they need to pivot in any way to stay on schedule or on budget? 

As margins get tighter, this kind of visibility gets increasingly important. 

Safer Jobsites

Moving quickly might seem like it would introduce safety risks. Actually, though, the faster someone can complete work, the less time they’re exposed to hazards on the jobsite.

The key to completing quality work quickly is planning. When the GC can figure out how to be more efficient with tasks, it helps them slow down in the planning moments instead of rushing through. In short, with proper planning, work can be done more efficiently and more safely. 

Lowered Burden During a Labor Shortage

Getting more done in the same allotment of time helps GCs offset the strain of a construction labor shortage. 

Getting a Clear Idea of Labor Costs

To monitor labor on a project, general contractors should measure:

• Percent complete, both in terms of:
• Dollars (dollars spent on labor ÷ dollars budgeted)

To provide more granularity here, the GC might decide to calculate each of these categories by cost code. 

Calculating those metrics helps the GC see if the right amount is getting installed in the allotted time, or if some course correction is needed. If the project’s concrete is 80% complete in hours but only 50% in terms of progress, for example, that’s a clear red flag. 

As the GC matures in its labor cost tracking and calculations, it can power earned value analysis for the firm. 

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Collecting Real-Time Data for Better Labor Cost Visibility

The challenge for GCs is that it’s not uncommon to have labor data lag of multiple weeks. They might wait for payroll to charge time to the job or for subcontractor monthly billings. But getting day-by-day labor data helps the firm keep its finger on the pulse of the project — and the sharpest GCs are finding ways to collect daily data.

On the subcontractor side, GCs benefit from tracking labor hours in near real-time. That could mean having a superintendent walking the jobsite, tracking subcontractors and the number of people they have on the site at any given time. If it all falls on the GC’s supers, though, they’re looking at late nights in the job trailer to record everything.

Allowing subcontractor foremen or project managers to enter this data directly with software — with the appropriate permissions — removes the burden of collection from GC superintendents. 

GCs can lighten the superintendent’s load on the internal hour-tracking side, too. Here, it helps to get the time tracking as close as possible to the entry point as is tolerable for the company.

Rather than having one superintendent track time for 100 laborers, for example, the firm might distribute that workload across a handful of foremen. Not only does this help with speed, but it also supports more accuracy since each team member has fewer data points to monitor. 

Ideally, the GC gets real-time hours and production data from the jobsite and pairs that with real-time financial data from accounting. This gives them the detailed labor tracking they need to be agile and make data-informed decisions for the project. 

Looking Forward: How Evolving Technology Helps GCs Track Labor Data

As technology gets more sophisticated, time tracking can often be offloaded from individual team members and onto devices and platforms. Some GCs establish a digital kiosk to check workers in and out, for example. Others put QR codes or embed radiofrequency identification (RFID) technology in hardhats, automatically scanning folks on the jobsite. 

At the same time, tracking progress on the job is getting easier, too. Reality capture technology can scan the jobsite and note what’s been installed. That gets particularly accurate when the reality capture tech ties to building information modeling (BIM) on the project. This gives GCs a holistic and automated progress check. 

Whether the GC firm decides to leverage technology, redistribute labor data tracking across its team (e.g., move some responsibilities from superintendents to forepeople), or request more labor logs from its subcontractors, there are a lot of ways to get better visibility into the labor on any given project. And that visibility helps the general contractor make adjustments as needed to deliver quality projects on time and on budget. At the same time, it helps them protect their margin against labor cost overruns. 

It comes back to controlling what the company can control, and labor being a more manageable category than many others. Deploying processes and tools to capture and analyze labor costs helps protect GCs in a world of erratic supply chains and thin margins. 

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