4 Key Tips for Steel Contractors to Optimize Labor Resources

The entire construction industry faces headwinds with the economy and labor shortage, but steel contractors are being hit especially hard. According to Procore and Dodge Construction Network’s survey, 58% of steel contractors said half or more of their work is negatively affected by lack of skilled labor, which results in cost overruns, quality issues, and increasing rework.

If you are a full service provider of steel fabrication and steel erection, or you specialize in one or the other, optimizing your existing labor resources will be crucial to executing on existing and future jobs. There are ways you can boost your team’s productivity without burning them out. And meet challenging demands head on so you can continue to grow your business amidst the labor shortage.

Here are four top ways to get started:

1. Eliminate manual methods

There’s a lot of work to do, and simply not enough people to do it — especially when low productivity tasks like manual documentation and communication are so common in the steel industry. Data shows that employees spend around 20% of their time on average tracking down information or documenting it on paper, or handling paper-based drawings and reports.

Steel contractors should eliminate these legacy processes that not only take more time to perform, but can also lead to other mistakes and miscommunications. It’s simply wasteful to have field and shop teams waiting around idly for a set of drawings to be printed — not to mention the impact on project schedule.

As if the resulting delays and overtime weren’t enough, in the steel industry, a single wasted afternoon is more than enough to significantly impact the critical path

2. Standardize processes

Manual methods are a problem across the industry, but steel contractors have it extra bad: 41% report more than average time (>20%) spent on low productivity tasks. These low productivity administrative tasks may not all be relying on paper but many of them are in need of standardization.

Creating a company-wide, standard process for common tasks streamlines workflows and allows field and shop workers to focus on quality fabrication or erection, rather than the busywork. The same applies in the office where a standard process can ensure data is consistent and reliable.

For instance, in documentation, a standard process for producing and submitting daily reports is essential to maintain regularity (and eliminating hearsay). Communication needs standardization too — not in how people talk, but how often and to what purpose. Change impacts and out of scope work, movement of labor resources, and new or updated drawings are urgent information that should be sent by a standard process and with predictable timing.

Project management processes are equally important to standardize, so every person and department is using the same scheduling, progress tracking, and job costing tools without having to access personal computers or local servers to get critical information.

A standard process allows labor to be allocated and deployed smoothly, because all projects operate the same way and if necessary, project teams can step in or out of multiple projects easily and know exactly where things stand. Standardization can even drive culture because people are able to take vacation or even retire with confidence that productivity won’t suffer.

3. Leverage construction management technology

A third of all specialty contractors are investing in construction technology to improve their productivity, and steel contractors lead the pack when it comes to adoption of and engagement with tech.

Construction management software is one such investment many have made: a central system where all teams can communicate and collaborate to drive operational efficiency. The right technology can help drive key business outcomes for fabricators and erectors alike; from reducing friction and errors when transferring projects from preconstruction to operations, to avoiding margin erosion from costly rework, payment delays, and missed change orders. 

During a project, construction management software eliminates manual processes and outdated document control, providing standardized solutions with cloud-based access and actionable insights. This means decisions in the office can be made with real-time data from the jobsite and vice versa; field teams are empowered with production data; company-wide insights into performance allow teams to drive and improve quality and safety standards.

Workforce management software ensures the right people are on the right jobs, matching skills to project requirements, at the right time. Real-time monitoring of labor resources also means projects stay on schedule and on budget: shifting schedules and requirements can be forecasted and responded to without missing a beat. Mobile-friendly timesheets and real-time labor cost tracking keeps hours accurate and avoids cost overruns.

A single source of truth for financial management helps everyone out, from project to accounting teams, ensuring financial accuracy of all job costs. Missed change orders are reduced or eliminated entirely with improved communication and visibility. 

Having an accounting system and a local server simply won’t cut it these days. In order to keep up with the speed and complexity of projects these days, your business needs to implement modern construction management technology to drive and improve business outcomes.

4. Increase retention efforts

More than a quarter of companies surveyed expect the potentially devastating departure of 50% or more of their workforce over the next five years. A third of the workforce is simply retiring and others are leaving for new industries. Steel erection and fabrication is a little better off than other trades… but only a little: 29% of the steel workers plan to retire (vs. 33%).

With so much skilled labor leaving, it’s more important than ever to keep the workers you have. And data shows that most specialty contractors are increasing their employee retention efforts in hopes of doing so.

The good news is that by implementing the previous three tips, your company is already going to improve the professional and personal lives of your workforce. 

  • Eliminating manual methods will improve team morale by removing cumbersome, tedious processes
  • Standardizing processes will allow teams to take vacation without compromising teams or projects
  • Implementing construction management technology will drive efficiencies and increase safety

A better, more predictable and modern workplace means your teams will get more done every day but will be able to get home in time for dinner.

Steel contractors face many issues today that directly impact the success of their projects, of which the labor shortage is just one. With so many market forces all of your control, it’s hard to grow and scale your business predictably but there are steps you can take with what is within your control — the above is a good start.

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