Effective management is a critical requirement for delivering projects on time and within the stipulated budget in the construction industry. With over two-thirds of construction projects failing to reach the handover phase within the estimated budget, labor management in construction is mandatory.
Why is labor management important?
In the construction industry, labor management is essential because it decides the company's bottom line. The workforce is the most critical of all the resources utilized in a construction project. Laborers and skilled workers are required to keep units operation and projects on-site within budget and on schedule.
This makes labor management in construction critical and requires a strategic approach. Managers must engage with laborers and workers individually to listen to their requirements and prioritize their needs. The laborers are directly responsible for the success and growth of a company in the construction industry.
We share some helpful construction labor management techniques to help managers be better prepared to handle the workforce.
Tips for improving labor management in construction
1. Collaborate with the workers
Generally, a construction project involves several subcontractors who provide labor. Collaboration and good communication are necessary to ensure that all contractors are on the same page and there is an open line of communication with the workers.
Construction projects are usually large, and proper construction labor management is necessary for the overall efficiency and effectiveness of the project. If you can facilitate seamless collaboration between the different groups of workers, then you will successfully minimize the errors that arise due to miscommunication.
Also, any mistakes committed in construction work can be detected and corrected quickly and easily. It will prevent a domino effect that can cause project delays.
2. Prioritize the health and safety of laborers
The construction industry is often marked with mishaps and accidents unless proper safety measures are taken. Labor management in construction must prioritize the health and safety of laborers.
First, laborers must have reasonable working hours to ensure they are well-rested. A fatigued workforce will cause underperformance, and too much work will also reduce their cognitive abilities, which can lead to on-site accidents.
Construction works involved operating heavy machines, handling hazardous materials, and working at dangerous heights. All of these risks pose a substantial danger to workers' lives. Therefore it is mandatory to provide safety in the workplace. Project managers must have proper safety measures implemented at all construction sites.
Furthermore, workers must cooperate by practicing safety measures. Laborers are more likely to stay with a company that emphasizes their safety.
3. Choose a good workforce management software
Construction work needs long and tedious administrative work that involves accurately logging laborers' time on the site, over time, daily reports, and estimates, managing a large number of workers, ensuring workers are present on-site when logging into the system, and much more.
You will require reliable and efficient workforce management software to automate these tasks. Truein is a product of choice for many construction companies due to its robust, hardware-independent, and cloud-based time and attendance management application.
Project managers can control attendance, overtime, report creation, leave management, shift scheduling, and much more using Truein. Workers can download the Truein app on their phones and clock in on-site. The core technology utilizes geofencing and GPS-tracking to ensure that workers are present on the designated site when they record their attendance.https://www.youtube.com/watch?v=s58lVluWMLM
It is a highly efficient workforce management solution for the construction industry. It can save time and energy for project managers and HRs, reduce reporting and payroll errors, and decrease the overall construction labor management cost. Schedule a free demo today and try Truein in your organization.
4. Balance the skilled workers where required
Invariably, there will be gaps in the workers' skills when you hire them and what the project requires. An essential part of labor management in construction is creating an ecosystem to foster the development of the workers into skilled labor.
This will require you to optimize the workforce utilization rate. Simply put, it means putting workers in roles that will develop their skills.
5. Identify the issues that workers are facing
Construction site disputes can cause laborers to lose motivation. It can also create a hostile environment for workers, which must be avoided at all costs. The construction staff is a valuable asset for any company, and project managers must identify workers' issues.
With effective labor management techniques, it can be ensured that workers are not facing problems that are hindering their performance.
6. Give laborers all the tools and resource that is needed
Another aspect of construction labor management is providing workers with the tools and resources they need to do their jobs smoothly. When allocating a budget to acquire new construction equipment, ask project managers what tools and resources are required to speed up the progress of the projects.
Technology must be integrated with manual labor, which is why automated tools must be a priority. You must also think of the managers and provide them with tools to free them from repetitive paperwork and administrative tasks. Solutions like Truein free up management time for other responsibilities.
Labor management in construction is the stepping stone for a company. These labor management techniques in construction will take unpredictability out of the picture and improve your labor management approach.
What is construction cost management?Construction cost management is primarily focused on keeping the project budget within the planned limits and avoiding any increase in the total cost of the budget that can eat up your profits. Simply put, with construction budget management, companies can set a standard for all project costs ensuring that spending at any point stays within the pre-determined cost limits. Cost control on construction impacts all phases of a project, including planning, designing, estimation, change orders, hiring of laborers, and the finished product. Maintaining a reputation as a proactive, efficient, and accurate service provider in estimating and executing a proposed project budget is also essential. Construction companies have a lot to take care of when they take on new projects and maintain many requirements. It is easy to mismanage the costs, which is why construction cost management is essential. At the core, the main requirement of cost control in the construction project is to implement systems to ensure that the project is delivered within scope and on budget.
Mismanaged areas in construction cost managementIt is common for construction projects to get out of budget. According to the consulting giant KPMG, “Just 25% of projects came within 10% of their original deadlines in the past 3 years.” It shows that without proper construction cost management, companies can lose profits and end up in debt. Why is it that even with careful cost control in construction, only 25% of the projects can maintain a positive cost budget? The answer lies in the external factors that affect the overall construction cost of a project. As such, a construction project requires raw materials procured from external sources. Compared to other industries, it is impossible to stock the building materials, as they are procured and delivered directly on-site. According to market reports, the cost of construction has risen 10%-12% in the last year, which has pushed the prices of real estate. This increase in the construction cost is due to higher input costs from the supply-side constraints. The rising price of crucial materials like cement and steel makes it tricky to estimate the construction cost accurately. In 2022, the price of essential construction materials has increased by 20%. According to the real estate consultancy firm Colliers, “With rising material cost, developers will be compelled to increase prices as construction materials account for about 2/3rd share in the total cost of construction. With wholesale price inflation (WPI) and material cost, both seeing a double-digit rise, the construction cost can rise by a further 8-9% by December 2022.”
Planning a construction budgetThe best way to ensure that you are at the top of construction cost management is to plan it at the beginning of the project. Your construction budget is just like any other budget that anticipates and adds up all the costs so the project can be executed. Every construction project cost falls under one of these categories:
- Direct costs: Materials, labor, heavy machinery, and consultation fee falls under this category.
- General conditions: Also known as an indirect cost, it includes preconstruction costs, construction organization costs, and project operating costs.
- Overhead and profit: Overheads are the expenses associated with running your business, and profit is your earnings after all spending is deducted from project costs.
How to create a construction cost management plan?An accurate construction budget requires that you include the following steps:
1. Project research and analysisAccurate forecasting is required for cost control in construction projects, so you must review the historical data of similar projects. Meet with suppliers to anticipate fluctuation in essential material costs.
2. Project developmentResearch and project analysis help architects create the final design before it can be executed. A project manager uses this information to create a requirement list that includes materials and cost estimations. It is a crucial phase of cost control management because it guides your bidding. Depending on the cost estimations from the project managers, you can set the actual construction project budget to give to the clients by factoring in your profit margin.
3. Preconstruction and documentationThis is where the project manager speaks to the stakeholders to highlight the issues the construction project will resolve. The preconstruction phase is necessary to make stakeholders aware of any unexpected costs that can come up. This is important to ensure that contractors don’t have to bear additional charges if they are already discussed with the stakeholders.
Cost control in construction projectAs KPMG highlight that only one-fourth of the construction projects remain within the budget, it is safe to assume that a construction project has a high likelihood of getting out of budget. Here are the steps you can take for effective construction cost management:
1. Keep labor costs in checkThe construction industry is one of the largest employers of unskilled labor and contract workers. You must have adequate measures to monitor the productivity of such workers. Truein is a cloud-based, hardware-less time and attendance management solution that construction companies can deploy on-site. Workers can download the Truein app on their phones, and managers can set GPS-based geofencing attendance to ensure that workers are present on site. Truein provides segregated contractual workforce management to ensure project managers can easily manage full-time and contract workers. By tracking workers in real-time, you can ensure labor cost is justified. Schedule a free demo today and see Truein in action at your organization.
2. Monitor project statusThings might go wrong during a construction project, and the role of project managers is to avoid the blame game and look into the factors that result in costs getting out of budget. You can utilize the Five Whys Technique to explore the underlying problems.
3. Adjust key result areasIt is common for project managers in construction cost management to assume that cost correction will happen later. In construction projects, small mistakes here and there don’t wash up. Instead, they have a snowball effect on the overall budget. Project managers must adjust such minor discrepancies in project costs as they occur.
ConclusionWith construction cost management, every aspect of a construction project can achieve the best outcome. With successful cost control in construction, you set up your company for success time and again.
Running a construction business can be lucrative but it is one of the most human resource-intensive sectors. Gaining access to quality labor can be expensive. According to Statista, the US employment cost index has seen a significant surge of up to 0.7 percent in 2020.
Add the horrendous impact of the pandemic on the construction industry, companies are struggling to pay their employees and looking for ways to reduce labor costs without reducing headcounts. Without proper strategy and management on reducing labor costs, you can be left with less-than-optimal profits or worse debt.
Fortunately, there are some ways in which businesses can reduce labor costs in the construction industry. In this article, we discuss how businesses can reduce the overall labor cost in the construction industry.
Why is reducing labor costs in construction necessary?
In the construction industry, more than 61% of the final sales price of a project goes into building costs. These costs generally include the cost of labor and materials. For most of the projects, it splits 50/50 between the cost of labor and materials, but for some projects, it can be up to 30/70.
The construction services industry keeps the gross margin close to 19%, but that's on paper. Your profits can dip to a low if the costs of building the project are not appropriately managed. Little can be done about the building materials because you need materials to complete a project.
However, efficient management can lower labor costs without taking money away from your employees. Here are some ways to reduce labor costs for a construction project.
How to reduce labor costs in construction
Over the years, the construction industry has devised inventive and ingenious ways to reduce labor costs without sacrificing quality or cheating workers. Let's take a closer look at how it's done.
1. Estimate labor costs at the start of the construction project
Unless it's your first construction project, you will have a good idea of what labor costs will be involved in the project. To provide an estimate, you must use your previous experience with similar projects as a benchmark.
You have to consider employee turnover and the increase in the cost of labor. You have two choices - a time and materials contract and a fixed-price contract for the project. In a time and materials contract, you calculate labor costs per hour, and the material prices are flexible and can increase or decrease depending on the project's demand.
A fixed-price contract has a total value estimation for a set project. You have to deliver the project within the quoted price. While a time and materials contract pays more, as your client will pay the exact cost of the work based on labor rate and cost of materials, you can quote a higher price.
However, there is no structure to project completion here, and construction work progresses on the go. A fixed-price contract is more rigid, with well-defined documentation of specific phases and deadlines. Unless your project goes beyond the defined outline, the price won't change.
Some construction business owners find it risky, but this type of contract has defined expectations, and it's much easier to keep the project on track.
2. Review your site crew structure and see if you have the skilled workers for the tasks
In recent years the construction industry has been through a lot. First, the housing crisis of 2008 led to the loss of more than 2 million workers between 2007 and 2011. Then the global pandemic forced numerous construction businesses to suspend labor, close projects, and terminate employees.
All these events have highlighted the need for the correct site crew structure. Every construction business has a composite of employees. There are skilled and unskilled workers. Interestingly, many business owners do not understand how to reduce labor costs by giving the right task to appropriately skilled laborers.
You must review your site crew structure to ensure that the right people lead the teams. If you have put someone in the position of a supervisor who is better as a worker, consider providing them further training to make them better leaders. This is important to get quality work out of them.
Another critical aspect is ensuring your most skilled workers do what they do best. Don't cut on paying them for their performance. It might sound counterintuitive; how can you reduce labor costs when you are spending more money?
You are missing the point of quality work. Suppose if one of the supervisors in your team is excellent at electrical work but spends more time overseeing lesser skilled workers, you might be losing money. Their electrical work, such as wiring and lighting, might need redoing.
Think about how much it will cost you to redo the entire work. This is why giving skilled workers the right job can help you reduce labor costs.
3. Streamlining your workflow schedule
In every construction business, it is essential to streamline the workflow. The hard part is how you facilitate the workflow schedule.
First, you must ensure that your work flowcharts are created with realistic goals and expectations. Second, workflow schedule charts must be well-defined. They must explain the nature of work and mention which laborer fits best in which subgroup.
The workflow schedule must also clearly define the time for each task to get completed. Match over the days' progress of your construction crew with the workflow schedule chart. Discuss and ask for feedback from leaders to make the necessary changes to streamline the workflow schedule.
4. Go paperless
By digitizing documents such as workflow schedules and performance charts, you can make better decisions on reducing labor costs.
Going paperless allows you to stay on top of processes without visiting the site. Your supervisors don't have to waste their time completing paperwork. There is no need to enter data into a system manually. With automation, you can easily track the construction project's production at every phase.
Truein is an AI-powered face recognition time and attendance management software based on the cloud network. With this software, you can ensure workers are present on site through GPS and geo-fencing features. It tracks attendance in real-time, offers shift scheduling, and eradicates time punch errors. It enables you to pay laborers for hours they work accurately.
Being on top of material and subcontractor costs is not enough to make your construction business profitable. You have to manage labor cost-efficiently as it can take up to 50% of your revenue. We hope these tips will help you reduce labor costs.
In every industry, employee time tracking is a norm. It is a way to decide the workforce's productivity and ensure that employees are paid accurately for their work. However, employee time tracking is difficult in the construction industry as workers are spread across construction sites.
In the construction industry, workforce management is complicated as not all workers can be trusted to show up for work or honestly record their attendance. Contractors and supervisors use construction timesheet templates to manage how workers spend their time at the job.
This guide details everything about the construction timesheet template and its benefits and drawbacks. We will also explore how to automate construction timesheet keeping.
What is a construction timesheet?
A construction timesheet is a manual timesheet used for recording the working time of contractors and construction employees to calculate the number of hours worked and payroll. A construction timesheet template records the task performed, employees punching time, and billing costs.
Timesheets have been used in the construction industry for decades. These are excellent tools for tracking time, work, and payroll in any industry. The flexibility in the schedules is unique to the construction employees and contractors. Contractor timesheets are one of the best ways of employee time tracking in the construction industry.
While you can download a contractor timesheet template free online, it is essential to understand how to use a construction timesheet for maximum productivity. But before that, let's understand how a construction timesheet template is unique from traditional timesheets.
- First, construction timesheets record the start and end times for every activity instead of an exact number of work hours.
- Second, the work structure of the construction timesheet template is highly customizable lists because, unlike traditional client project tasks structure, the nature of construction work is different.
- Third, the construction timesheets use construction cost codes instead of actual task names as in traditional timesheets.
- Another distinguishing factor is that a contractor timesheet template is made around work and billing rates. As in the construction industry, profitability is the key metric instead of productivity; it is why construction timesheets are built to calculate costs and profits.
Why do you need a construction timesheet?
Construction timesheets provide a structure for a largely unorganized onsite workforce in the construction industry. Although construction workers deem timesheets as tedious and a way for their owners to micromanage them, in reality, construction timesheets can help expedite the payment process and ensure construction workers are paid accurately.
Since many companies also use contractor weekly timesheet templates to appreciate hard workers, they serve as a performance review tool as well. Here are some significant reasons you need a construction timesheet template.
1. To track the hourly pay of employees
Employee time tracking provides transparency throughout the construction business, and a project can be managed much more efficiently. When workers are honest and record their work time accurately, owners and managers can view how many hours they worked, more accurately.
It provides valuable data to track employees' hourly pay and precisely how much to pay them. The data is also helpful in giving feedback to the workers on their performance and helping them improve.
2. For tracking historical work log
Using construction timesheet templates, owners and contractors can track the historical work log, giving them a better idea of the actual cost of a job. It allows them to be much more efficient in forecasting the estimates of future jobs. A historical work log also helps to understand the nature of the job if it's similar to an old project.
It helps reduce overall profit losses due to underbidding on future projects and assists in securing future jobs by avoiding overbidding. Timesheets are valuable resources for construction business management.
3. To be compliant with the government laws
In the construction industry, workers are often exploited by long work hours without pay. Construction timesheets ensure that the construction business is compliant with government laws. You can ensure that you are paying labor accurately for their work hours.
It also helps to comply with the overtime rule and ensures workers are not forced to work beyond their shifts. Compliance is necessary for a business because it enables them to be on the law's good side and create a healthy work environment for the employees.
4. For automating the payroll process
Construction timesheets eliminate the guesswork from the payroll process. When you have accurate data on the hours worked and how many workers worked on the task, it becomes easier to bill and pay. The entire billing process can be expedited, and payroll systems become much more accurate.
Using a time and attendance management software like Truein, you can entirely automate the payroll process and drastically minimize the scope for human errors. Such tools allowed to import the timesheet data into the payroll software and automatically calculate billable hours by accurately converting minutes into hours.
How do you maintain construction timesheets?
To maintain a construction timesheet, you can use Google Sheets, Excel, or any other data-keeping application. Paper timesheets are more straightforward but are not as efficient as the free construction timesheet template we share.
We have created four formats of Excel construction timesheet templates that you can download and use without any modification.
A construction timesheet records the Date, Day, Task, Time in, and Time out data. While the construction daily timesheet template is the easiest to manage, the construction weekly timesheet template has an additional field to record the day. Bi-weekly and monthly construction timesheet templates are just an iteration of monthly templates for two and four weeks.
Download contractor timesheet template free:
- Free construction daily timesheet template
- Free construction weekly timesheet template
- Free contractor biweekly timesheet template
- Free contractor monthly timesheet template
Disadvantages of using manual timesheet in construction
While a free construction timesheet template provides an efficient way to manage the workforce and payroll, it is also prone to human errors. As manual timesheet keeping entirely depends on the honesty of the workers and contractors, there is scope for manipulation and time theft.
Paper timesheets are a logistical nightmare and can be easily misplaced. Due to severe disadvantages, a manual timesheet in the construction industry is not advised. Here are some of the common disadvantages of manual construction timesheets.
1. Discrepancies between actual working time and reported times
Manual construction timesheets are susceptible to time theft. Workers can easily record the wrong clock in or clock out time without being noticed. There is no way to discover the discrepancy until it's too late, and the project gets delayed because of time theft.
Workers can also participate in buddy punching; that is, a worker can ask his colleague to record time in his absence and report to work late and still get paid for a complete shift. The construction industry loses billions of dollars to time theft every year.
2. Not easy to track and schedule employees
Timesheets are just a piece of paper that cannot be used to make shift scheduling decisions or to track employees. Manual construction timesheets result in poor efficiency in workforce management. The construction industry often struggles with tracking employees working at remote sites. Without centralized data, it is not easy to track or schedule employees.
3. Lack of productivity and lots of manual work
Building on the point above, manual construction timesheets have no scope for automation. Managers and owners must go through a lot of manual work to calculate billable hours and set shift schedules.
Such manual workforce management leads to work productivity. It can take hours or even days to conduct payroll or set schedules when all the data has to be compiled and sorted manually.
4. No way to automate and directly calculate pay and overtime
Without any automation, there is no way to integrate the data from manual construction timesheets into the payroll software. All the calculations must be done manually to calculate pay and overtime. The task is not only mammoth and cumbersome; it often results in frequent human errors that require correction. It also results in inaccurate paychecks.
Truein: A better alternative to manual construction timesheet
The construction industry has also benefited from adopting automation like other industries. Time tracking and attendance software like Truein make it easier to accurately manage the workforce and pay them.
Truein is an AI-based facial recognition employee time tracking and attendance software used by some of the biggest companies in the construction industry. It offers accurate time tracking for construction workers based on GPS tracking and geofencing.
Workers can download the Truein app on their smartphones to record attendance accurately. This eliminates the requirement of additional hardware or paper timesheets at the construction site. By accessing the GPS within their phones, Truein can track the workers' location accurately and ensure they are at the site where they are supposed to be when they record the attendance.
Furthermore, it easily integrates with all popular payroll software, automating time tracking and payroll process. We hope you understand the essential construction timesheets and how you can automate the process with Truein.
The COVID-19 pandemic affected businesses in the worst ways possible. Revenues stopped, inventory was lying unused, debts increased exponentially, and many companies had to lay off employees to stay afloat. Interestingly, as the lockdown subsided and business operations returned to normal, companies experienced an unexpected labor shortage.
Hiring workers has become increasingly difficult because of ongoing mass resignations and employees seeking more flexibility. This article will be a helpful resource if you are looking for strategies to overcome labor shortage issues.
But, before we get started with the strategies to overcome labor shortages and retain employees, let's first understand what a labor shortage is.
What is a labor shortage?
The labor shortage is a term that indicates a gap between the labor needed in industry and the number of workers available to fill in the requirement. Simply put, there are more jobs available than the workers. It can be because workers are less willing to work in a position or a scarcity of skilled labor.
The pandemic accelerated the labor shortage issue as, during the last two years, 1 in 4 workers quit their jobs since the pandemic and have not returned to work. It is becoming a struggle to find workers to fill open positions.
Manufacturing, construction, hospitality, transportation, and healthcare are the most affected industries. If you pay attention, there is a common factor in all these industries-they require the workforce to be available in person during work hours. Also, most of these industries employ blue-collar workers and heavily rely on laborers to operate.
Why is there a labor shortage?
The labor shortage is not only because of fewer people willing to work; there can be several other factors contributing to your business' struggle with finding or retaining the right talent.
Be mindful that none of these reasons prevents you from retaining the workers.
1. Poor compensation
This reason is easiest to anticipate. Workers want to be paid more, at least what they are worth. Industries like construction, mining, healthcare, and manufacturing especially face labor shortages as the pay is less than in other sectors.
The limited wage is not enough to meet the increased cost of living and healthcare, pushing workers to look for positions that pay them better.
2. Lack of flexibility
Since the pandemic, employees have been more discerning of opportunities that allow them to have a better work-life balance. Workers now seek increased flexibility, but employers remain reluctant to offer the same.
According to a survey by Future Forums of 10,000 knowledge workers, employees want more flexibility in jobs and, if possible, location. As remote working is not an option for most of the mentioned industries, an evident lack of flexibility causes workers to look for work in other segments.
3. A question of purpose
For many employers, it may seem inconsequential, but workers are increasingly losing their sense of purpose at work. Employees who are not connected to their workplace cannot be passionate about their jobs. It eventually forces them to leave work.
If your company is facing a labor shortage, reevaluate the work environment, and if missing, try to create opportunities that will make employees feel more excited about their roles. Indeed surveyed workers who voluntarily left their jobs in 2020 and found that 92% of the respondents felt "life is too short to stay in a job they weren't passionate about."
If workers do not feel connected with the company's goal and vision, they may not be inspired to stay at the job.
8 Ways to deal with the labor shortage
1. Train and cross-train existing employees
The mass exodus of the workers can leave companies in limbo if those leaving are skilled workers. You must implement training programs to help workers across domains acquire common skills to keep business operations up if there is a labor shortage. Cross-training employees can help.
For instance, production staff can be trained to handle maintenance responsibilities if the situation arises. Cross-training does more than retain employees; it creates a sense of value and community.
2. Improve the work environment to reduce employees leaving the organization
As we mentioned above, the work environment is one of the main reasons why employees work or leave a job. You are walking in circles if you are wondering how to solve workforce shortage without addressing the issues causing employees to leave. Ensure that the work environment is positively inductive for employees.
For example, if you are in the manufacturing industry, your employees must feel safe at work with all safety measures.
3. Recognize and reward employees
Acknowledging workers' hard work and sincerity and rewarding them appropriately will boost their morale and keep them engaged. Make sure your employees are not feeling neglected, and their efforts are recognized and rewarded. Just offering perks alone is no more an incentive good enough to keep workers; you have to make them feel appreciated and valued as part of the team.
4. Make opportunities for them to develop and grow
Pandemic has changed the workforce a lot. Everything needs improvement – skills required for the job, where and how work is performed, and what motivates the workforce. To overcome labor shortages and retain employees, you must create opportunities for them to learn and grow.
Take a fresh look at the workforce and try to identify opportunities where you can introduce improvements. For instance, if your manufacturing unit relies on manual labor for production, you can introduce CNC machines for repetitive tasks and train the workers. This will present them with an opportunity to develop and grow.
5. Automate tasks
If your company has scope for automation, explore solutions for the same. The more automated tasks are, the lesser workforce will be required. In the wake of the rising cost of labor and the shortage of workers, several companies have considered automation to reduce the up-front cost of hiring or maintaining a large workforce.
Partnering with consulting firms to explore automation integration in the business processes will provide an answer to how to solve the workforce shortage. For example, you can use automation to help remove infrastructure bottlenecks and free up human resources to work on operations that contribute to the revenue directly.
6. Pay bounties to employees who bring new employees
Why not turn your workers into headhunters by offering them incentives for referring talent to the company? Instead of outsourcing the hiring process or relying on the HR team to solve workforce shortages, you can introduce a referral bonus for employees to bring in new talent.
At some of the most successful companies, 28 to 30 percent of the new hires come from employee referrals. If they can do it, so can you.
7. Be flexible with schedules
Flexibility is a requirement, not an option, to retain workers. Now employees seek a more positive work-life balance and opportunities that offer the flexibility to work. By creating flexible work schedules, you can let workers feel relaxed about their routine and not stressed. It will help prevent employees from leaving.
8. Use time tracking tools
Employees adequately compensated for their work time build trust in the managers and the company. Using time and attendance management tools to record attendance would be best. Such tools also free HR managers from manually managing attendance and shifts, a process often susceptible to human errors.
Truein is a face recognition attendance system that can help companies schedule shifts, track timing, and efficiently distribute workloads among employees. It can automate report generation, directly integrate attendance records with payroll software, and for remote sites and field workers.
There is no telling when markets will emerge victorious from the acute labor shortage facing businesses today. While the HR gurus can only make predictions based on surveys and studies, business owners need to make tough decisions.
The strategies we have listed here are helping companies across the globe overcome the labor shortage. We hope you, too, can recognize what's causing the labor shortage at your company and implement the appropriate measures to fill in the gaps.
The Indian construction industry is a major player contributing to the economy's growth. At the center of the focus of the government's initiatives to create world-class infrastructure in a time-bound manner, the construction industry is poised to receive investments of up to $1.4 trillion by 2025.
Without a doubt, the construction industry is crucial to driving the country's growth, but it needs some reforms too. The industry is the second-largest employer, with over 51 million workers. Furthermore, the construction industry created 45 million additional jobs directly or indirectly. It is easy to anticipate that there certainly will be management challenges with such a large workforce.
In this article, we will focus on overtime in the construction industry. We will take a look at the challenges and available solutions.
What are the construction industry overtime rules?
As the construction industry primarily has a workforce working at sites, time management is a complicated task to achieve. Keeping track of workers is a gigantic task.
It is important to understand what laws govern and protect workers' rights in the context of overtime. Here are the essential labor laws an employer must be aware of.
|Act||Provisions under the Act|
|Factories Act, 1948 Sec. 51, 54 to 56 & 59 of the Act include overtime wages.||Under section 59 of the Factories Act, it is clearly instructed that a worker who works for more than 9 hours any day or for more than 48 hours in a week will be entitled to receive wages in respect to overtime work at the rate of twice his/her ordinary rate of wages.|
|Minimum Wages Act, 1948||It also applied to construction workers. According to section 33 of the Minimum Wages Act, overtime wages must be twice the rate of the ordinary wages of the worker. Sec. 14 of the Act states that for workers, if the minimum rate of wages is fixed by the time period, such as by the hour, by the day, or by any such period, and if any worker works more than that number of hours, it will be considered overtime.|
|Contract Labour (Regulation & Abolition) Act, 1970||As per Rule 79 of the Act pertains to the law regarding overtime calculation for contract workers. According to the act, every contractor must maintain a Register of Overtime in Form XXIII. All important details like the employee's name, overtime calculation, hours of extra work, etc., must be recorded in the register.|
|Building and Other Construction Workers (Regulation of Employment Service) Act, 1996||Under Section 28 & 29 of the Act, it is mentioned that construction workers who work overtime as per the regulations mentioned above must be remunerated at the rate of twice the ordinary rate of wages.|
Companies struggling with managing overtime for construction workers can end up with losses. As the law requires to pay twice the ordinary wage rate, overtime can have substantial financial liabilities. Let's explore some measures to control overtime in the construction industry.
6 Tips to manage overtime in the construction industry?
1. Identify the issue
If unexplained overtime is reported in the company, it is essential to know why it is happening before resolving the issue. Overtime construction can result from several problems such as heavy project loads, poor time management, and staffing shortage. These are some of the issues on the management site.
Audit the HR and managers' logs to understand the staffing and work distribution. It is also not uncommon in the construction industry to find employees working overtime for the extra pay. You have to get a clear idea of the issues to decide how to manage overtime for construction workers.
2. Be aware of local overtime laws
The central government of India implements the labor laws we have listed above, but there are specific local labor laws that a company must be aware of.
For example, Maharashtra has tweaked the local labor law to allow longer working hours and overtime periods for workers. As per the rule, "With the exemption from Sections 51,52, 54, and 56, employers can allow labourers to work in two shifts of 12 hours each."
3. Track work hours with GPS construction time tracking software
As mentioned above, tracking employees' working hours is a significant challenge in the construction industry. Field workers are away from CCTVs, so there is no sure way to know if they are working or not.
Using GPS-enabled attendance systems, you can overcome this challenge. Truein is a face recognition attendance system with geofencing and GPS tracking features. It can be used to record overtime for construction workers through the app on their smartphones.
4. Cross-train employees
The skill gap is a problem that increases over time in the construction industry. If you do not have the workers with the required skills, it can slow down productivity. Also, if the company is understaffed, project tasks can take longer to complete. The solution lies in cross-training employees to take up multiple roles if there is demand.
5. Hire contractors
Building on the above issue, if the overtime construction does not seem to stop even after cross-training workers because of staff shortage, you need to hire contractors. Hiring an independent contractor workforce can compensate for the deficit, and the overtime can be eliminated.
6. Improve work allocation and management
If the HR managers regularly cram overtime at the end of projects, it indicates poor time management. When you fail to anticipate the project's timeline or resources, which will be required at the initial stages, the task becomes hard to manage as the deadline arrives.
The managers must spread out hours from the beginning of the project so that no overtime occurs later.
Unmanaged overtime in the construction industry can be a real nuisance. It can create revenue overheads that reduce the profits, but more importantly, it can take a toll on employee productivity and health. With efficient employee tracking software for construction idustry like Truein, unnecessary overtime can be eliminated and boost the company's efficiency.
Construction industry uses large scale manpower and has a unique challenge of dealing with the ever-changing contract staff attendance. We’ve helped construction companies get over their biggest bane with a practical solution, especially designed for them.
The current attendance scenario in the construction industry
Construction companies would agree that there are no fixed sites. New sites come up and old ones close down all too often. It is not practical to install machines to track attendance. Manual attendance by the security guard is the most common practice. The result?
Who is signing attendance for whom? Nobody would ever know. The actual site may have ten people, but the company may be paying for twelve. Small leakages like these in the contract labour attendance system can result in big cheques and losses eventually.
It can also have legal and security implications too as there is no real way of knowing who you are employing.
2. Manual errors:
Even in a perfect world where everyone is honest and truthful at attendance time, there is scope for mistakes. There can be date errors or spelling errors. Contract labour may not be educated enough to realize it and it may go completely unnoticed.
3. Reconciliation pain:
Manual attendance at the end of the day, week or month has to be converted into excels for payroll processing. It can be many days of unproductive work, further prone to errors.
How can construction industry have better attendance monitoring?
Truein face attendance is one app with many solutions for the construction industry. Let’s break it down for simplicity.
Your sites keep changing so you don’t have to invest in attendance infrastructure. Install any temporary stand to hold a tablet at the gate and let workers simply walk in using face attendance. Don’t have a closed gated site?
Truein face attendance needs no hardware. It works on any Android or iOS mobile too. The security guard can be given a mobile to take face attendance of contract workers on site.
2. No proxy:
What you see is what you get! A face recognition-based system cannot be fudged or overridden. Besides, Truein works in the most complex scenarios too:
- Construction site has low-light or works in night shift? Our system works.
- Construction site is in a remote location with no internet? Truein works offline too.
Truein works practically hundred percent of times so there is no scope for parallel systems like manual registers.
3. Fast onboarding:
When you have contract staff that keeps changing every day, you cannot afford to have a slow or long onboarding system. How about a one-click system? The new joinee captures his face from the kiosk or mobile and his onboarding is completed. Every other detail like reporting manager, contractor agency, shift assignment etc. can be managed in our web dashboard later.
If you want to restrict the attendance of a worker to one site, you can do that using our technology. We allow you to fence the attendance by marking the GPS location. He can mark his attendance only within those geographical boundaries.
All entries get stamped with location and time, so you have a verifiable audit trail at all times.
Practically no-fuss, quick and accurate system is what we have to offer.
What’s more? We have clients in the construction industry who have used our system for more than four years at multiple sites on a large scale. Tried and tested? You got it!
Testimonial from a leading construction brand
Girish Nambalkar from SJ Contracts says, “Using a face attendance system at construction sites was a big challenge. Team Truein calmly understood our requirement and provided required customization too. Truein is an excellent solution. As of today, we are using Truein attendance system at our 22 sites.
We found that Truein is more user-friendly and easier to use. The required reports ae also generated by the individual users irrespective of his location.”