Is Low Productivity Stunting Your Construction Business?
Written by Megan Hamilton
October 7, 2022
As a business owner, you may not see all these things happen since you’re not in the field every moment of the day, but you can see the effects of low productivity on your business.
Four red flags indicate your business could be suffering from low productivity. We’ll walk you through each one and give you a few tips on how to address it.
1. Your business is growing slowly or not at all
There’s nothing wrong with taking things slow and steady. We all know the story of the slow tortoise who won the race against the fast hare.
But here’s the thing: The tortoise won because he was in the race. You're not even in the race when your construction business isn’t growing.
When your business grows too slowly, you don’t have the long-term momentum to become profitable. You will not make it to the finish line unless something changes. That “something” is productivity.
The first step to increasing productivity is asking for wise counsel from people within your company.
Talk to the leaders in the field. After all, they’re the ones with their boots on the ground daily. What do they think would make jobs flow better? Can you resolve communication issues? Do their crews know how to do the work asked of them?
You have the power to use your team’s input to help the company grow faster. After all, even tortoises can kick it up a notch when they need to.
2. You don’t have the money to reinvest in the business
When you’re barely making ends meet, you don’t have the resources to reinvest in your business. And if you can’t reinvest, you can’t grow.
Trying to manage your cashflow as a contractor can be incredibly frustrating if you’re pulling in enough revenue that you “should” be able to reinvest.
Money doesn’t just grow legs and walk away. It’s leaking out somewhere. Meaning somewhere along the line your crew, your managers, or maybe even you are doing things that cost the business more money than they should.
Here are a few common examples:
- Your crew is making many mistakes on the job and having to do rework that drives up costs and eats away profits.
- Your project manager is mismanaging the job by not staying on time, not staying on budget, or not delegating tasks well.
- You’re stuck in an expensive cycle of paying for equipment you can’t afford due to machine breakdowns or, conversely, due to buying or renting equipment that’s too high-end for where your company is at right now.
- You’re having trouble projecting your revenue accurately, so your numbers on paper and in real life don’t match.
Again, get good advice from people you trust within the company. And honestly evaluate what can be done better at every level—including yours—so you can have money left at the end of the month to reinvest and grow your business.
3. Your leaders are frustrated
Leaders get frustrated when they don’t get the support or resources they need from the company, or when they feel like their crews aren’t taking ownership of the work.
That frustration can come out in a lot of different ways.
Most mature people will respectfully tell you how they feel—which is great because you want leaders who will be honest with you. However, not everyone is that direct or trusting. Some people will suffer in silence. Others will be vocal but in unhealthy ways.
Some signs that your leaders are frustrated include:
- Mentally “checking out” of their role
- Letting their performance slip
- Berating crew members or office staff
- Complaining (even if it’s not to you)
The ultimate sign of frustration is when your leaders up and quit on you.
Frustration and high turnover among leaders trickle down to the whole crew. It crushes morale. Teams and leaders develop an “us versus them” mentality that creates strife and misunderstandings on the job. Crew members feel disrespected and unequipped, which are two big reasons construction workers quit their jobs.
Don’t wait for your leaders to tell you how they feel. Check in with them regularly. And do what you can to help.
Maybe you can’t afford to give them everything they (or you) want them to have right now, but you can honestly tell them why that’s the case and work with them to create a plan and a timeline for how to get there.
Another way to help? Training. When you teach your leaders how to lead well and teach your crews how to do their jobs properly, productivity will skyrocket.
4. Project completion is too slow
Slow project completion hurts your brand—or in other words, it damages your company’s reputation. You won't get repeat business when you get a bad reputation for working behind schedule.
You also won’t get referrals. After all, why would your client recommend you to anyone else if you couldn’t do the job on time for them?
Lots of things can slow down project completion, like:
- Machine downtime
- Crew mistakes that lead to rework
- Turnover within the company
Now, sometimes things happen that are truly outside your control. But you can still mitigate most project slowdowns. The best way to do this is through good training.
For instance, if you train your operators to do walkarounds and take pride in their machines, they’ll have less downtime. With leadership training, your field supervisors and project managers will learn to communicate and oversee the project better. Or, offer job-specific training for your employees to help prevent mistakes and rework.
The signs of low productivity have multiple causes. The next article in this series will walk you through those causes and give you more insight into how you can increase productivity in your business.
Written by Megan Hamilton
October 7, 2022