In today’s construction market, most contractors’ feel shackled between the industries competitive nature and labor’s stifled work force. The marketplace is bulging with work and the industry capability to provide qualified and capable worker’s is extremely limited, actually, practically non-existent. Competition for quality worker’s and the contractor’s ability to retain such skilled craftsmen is more difficult than ever. With all of these external forces working together it is fair to say that this is probably one of the toughest environments today’s contractor has to survive in.

But there is always a brighter side to the picture. Even when you feel that all is lost, there are always great opportunities if we look inside an area that has been left alone – human productivity.

Construction work is labor intense. It takes people of all trades to complete any project. The majority of contractors still operate the same way they did 15 or 25 years ago. The basic believes haven’t changed but the times sure have. If any contractor can improve how they “manage” their labor productivity, he or she will automatically increase production results. It stands to reason. Improve the area of your business that has a profound impact on your production capabilities, and you have inadvertently improved your bottom-line. Since construction is labor intensive, any positive improvements will bring positive results.

To unleash job site productivity, and to do it successfully, you must first review some of your systems in place. Possibly your systems have been in place for some time, in that case you have probably become complacent with them. But times have changed and now your objective is simple. Review and replace whatever systems are needed to unleash productivity.

Step One: Take a hard look at how you compensate and reward your employees. Are you experiencing a high turnover of help? Why is this happening? Search for the answer and correct it immediately. The cost to you to bring in a new employee and train them, coupled with the initial loss of productivity due to the employee’s natural learning curve with your company, is more money than you think.

Employees are assets. They make or break you’re profitability on any project. If you’re experiencing a “revolving door” effect when it comes to labor, correct it immediately. You need to take a hard look at what you have to offer anyone that is interested in becoming part of your organization. Employees need to feel as though they are part of something worthwhile. They also need to know that their efforts to help you make your business a go, is recognized and appreciated. Analyze what you have to offer them, and research what other contractors offer. This benchmark information gives you a level playing field to build on. Look at your compensation, benefits, reward and incentive packages and future growth for your employees, especially as their skills grow with them.

Step Two: Take a look at how you schedule your work and your people. If construction work is so labor intensive, and it has been documented that almost 50% of field labor time is lost time, even a minor improvement in scheduling will provide major savings (in my own construction company our labor time studies found this to be true).

Let me give you an example.

A contractor has a job that has a labor cost of $100,000 and an anticipated profit of $25,000. With a factor of 50% lost time, that means that he has $50,000 of “lost time” in labor. If he can tighten his scheduling of work and “motivate” employees to meet the schedule and reduces the lost time by 20%, he has increased his profit by $10,000 or increased his planned profit margin by 40%!

Any improvement in scheduling work, materials, equipment and manpower will flow directly to increasing the project profit margin.

Step Three: Establish a “vision” for your company and project that the employees can buy into to. Maybe it might be quality work, completing on time, customer satisfaction, being numero uno or any other vehicle you can think of. Develop this vision into a company theme that everyone supports. Flaunt it by putting it on everything.

Another area that contractors overlook is the project sign. We all have one, but does it broadcast your “vision”. We could also start putting the names, and maybe pictures, of the key people who are making turning the project into a reality. Believe me, with their names and pictures on the project sign, it has got to have a major impact on how that project is being handled.

If an employee has an immense sense of pride, recognition and connection to the outcome of the company and project, each day will reflect that attitude. The problem with most of this industry is that we treat our workers as numbers or “just employees”. With our archaic people management styles, we “bleach” out any sense of belonging or “purpose”. We offer no rewards or recognition for improvement in an individuals capabilities or contribution, so why should they try harder or improve their level of performance. This, I believe, has also contributed to the downturn in our younger generation to learn a trade. It is only we, the owners and managers of this great nation’s construction companies that can ever improve our own workforce.

Take a hard look at how you “manage” your employees. What is it that you really offer them? A future loaded with improvements, or “just a paycheck”? Can you find a system of improvement, one that will build great pride in your company and in the work it completes, one that will attract the best to your company because they want to be a part of what you are doing. This is tremendously important to today’s contractor, and to the future of this industry. What is the alternative? Will we find ourselves in the future importing labor from other countries because none exist in ours?

Again, I strongly suggest that you take a look at your existing people management systems, what you have to offer your employees and how you will attract the best of employees in the future. The key to unleashing productivity is already in your grasp.



“Henry Goudreau is the founder and current President of HG & Associates, Inc located in Sarasota, FL. He is a 2nd generation contractor who built his construction company from a shoe string budget into a multi million dollar business. Currently he works with thousands of contractors a year teaching them how to build a profitable construction business. In 2001 Henry was identified as America’s #1 Business Resource For Contractors. Over 300 contractors nation wide have joined his Elite Golden Hard Hat Business Coaching program. In 2004 these Golden Hard Hat Members averaged a Net Profit Margin of 22%. First year members averaged a 138% improvement in their net profit margin while receiving a 5000% ROI. To find out what Henry and HG & Associates could do for you visit us today at: www.hgassociates.com”

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