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How Productivity Metrics Can Improve Jobsite Performance?

We use productivity metrics to analyze how employees’ work affects business objectives. These KPIs are vital for improving the overall job site productivity while reducing unnecessary waste. 

Although performance analysis is vital in any business, it is even more essential for construction companies. A lot of unpredictable things can happen in the field, with revenue and expense variables being rather high. 

Among other things, productivity metrics play a key role in improving employee well-being. They asses how a company can better allocate its resources while reducing the burden on craftsmen. In this article, we’ll talk about the benefits of construction KPIs and will go through some of the most important ones.

How to Measure Construction Productivity?

We can calculate the overall productivity on a job site by summing up outputs and dividing them by total inputs. Keep in mind that productivity is quite a vague KPI. While it shows you whether or not your business is doing things right, it doesn’t take into account various business factors.

This is why the input/output model usually doesn’t work. Instead, we utilize a three-part process. We take into account the company’s main objectives, and we select appropriate metrics that would reflect these objectives. As a third part, we take into account employee-related KPIs.  

How Do We Use Metrics to Improve Our Results?

Most construction businesses introduce their own standards for performance. According to these standards, they can create a workflow with deadlines, timestamps, and progress. But when companies assess productivity for sustainability, they’re able to enhance the approach to encompass entire organizations.

Through accurate result measuring, construction companies are able to significantly boost their revenues and improve their market positioning. These are just a few ways KPIs help construction businesses yield better results:

  • Enhance resource allocation and time management. 
  • Help in improving operational efficiency.
  • Detect potentially risky and underperforming areas and activities.
  • Increase the number of effective services and products.
  • Provide prompt feedback that will enhance company-level efforts.
  • Analyzing employee stress levels and overall well-being.

These metrics are vital for detecting and addressing potential issues as well as anomalies within the company’s activities. By reacting to what construction KPIs tell us, we’re able to minimize business losses. 

5 Main Construction Metrics to Monitor 

No matter whether you’re a small family-owned business or a large international corporation, you’ll have a unique set of needs. These needs will affect the selection of metrics. Your goal is to create an analytical model that will focus on aspects of productivity that are most relevant to your particular case. 

Although it’s always better to use as many metrics as possible, as they would give you a more comprehensive understanding of the performance, you’ll likely have to settle on a few crucial ones:

  1. Revenue per Employee 

Perhaps the most important performance metric is the revenue per employee. The KPI is crucial in construction, as it is often hard to track what each person is doing on the job site. 

Revenue per employee is measured by taking the total revenue over a period and dividing it by the total number of workers. Among other things, this KPI shows us if we’re understaffed or if the current employees are undermotivated. In many cases, it indicates a lack of jobsite control.

While this metric is fantastic, it doesn’t take into account individual performance. 

  1. Total Cost of Workforce 

The total cost of workforce, otherwise referred to as TCOW, shows us how much money we’ve spent on our workforce. Besides salaries, it also takes into account bonuses, training, taxes, worker benefits, and more. With this indicator, we can see how much money we’ve spent on our workforce compared to our overall operating costs.

TCOW helps construction companies enhance their budgeting and decision-making processes. If we’re able to minimize the value of this metric while having a high revenue per employee, we should consider increasing our workforce. Total cost of workforce shows how spending money on our workers translates to business profits.

  1. Employee Utilization Rate 

Another worker-related metric is the employee utilization rate. It shows how many hours our employees spend on productive activities in comparison to spending time on something that doesn’t generate profits. The metric is especially valuable when executing projects for clients, making it a necessity in IT, marketing, construction, and consulting.

We get this figure by dividing the billable hours by total hours worked. For example, if a person works 50 hours per week, and out of those 50, only 30 are billable, the utilization rate will be 60%. With this metric, companies determine if they’re using the available employee hours the right way. 

  1. Focus Hours per Day

This employee engagement metric is somewhat similar to the employee utilization rate. In fact, many companies use these two KPIs in conjunction. Basically, focus hours per day show us how many “focused” hours a person has each day.

Nowadays, companies use various types of time tracking for construction to determine each person’s input. These tools monitor what we’re doing at every moment, and whether we’re located on a job site. Through focus hours per day, we’re also able to learn more about bottlenecks and other external barriers hindering employees’ performance. 

  1. Planned-to–Done Ratio

The construction business is notorious for wasting resources. Although modern companies spend enormous money on planning their budget and other aspects of a project, delays in the field derail these plans. Planned-to-done ratio is a vital indicator in project management, as it analyzes our ability to stick with the initial projections.

We get this KPI by summing up the total tasks that need to be done and dividing them by the number of tasks that were actually finished. For example, if you plan on finishing 100 tasks and do 90 of them, you’ll have a 90% planned-to-done ratio. 

Last Thoughts 

If you’re serious about your business, you should introduce productivity metrics into your flow. These financial and operational indicators show you how your workforce is doing in the field, but also whether your plans are effective. 

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