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Stop Time Leakage & Save A Fortune

Aug 20, 2008
Would you believe it if you were told that time leakage is one of the biggest problems in the construction industry today, or would you be shocked? Either way, it may surprise you to learn just how much this adds up to in loss of income.

Let's say you have 100 workers - employees or subcontractors being paid an average of 25 per hour. And let's say each one works 48 weeks per year and that each one of them loses a very conservative one hour per week based on a forty hour week.

That would be a loss of 120,000 per year, not to mention the opportunity cost of 4,800 billable hours that you could have billed elsewhere. If you then add to this the time taken by the foreman and administrator managing timesheets, it's hard not to agree that - for every 100 workers - you could be losing more than 150,000 through time leakage!. This equates to >2.5% of the annual labour cost. In an industry where there is often a 50/50 split between labour/materials and where net margins average 5%, 2.5% saving on labour would add 1.25% to your nett margin.

I'm not going to tell you that you can save that much or more - only you know how the figures add up for you, but I wonder what happens when you imagine yourself saving a small fortune?

TIME LEAKAGE - MONEY DOWN THE DRAIN

Let's take a quick look at what time leakage is and how it happens. Time leakage is jargon for 'time lost', and there are many factors that contribute to it, including:

* Manually filling out time sheets

* Faulty short-term memory - when filling out a timesheet at the end of the week. People's memories seem to err on the side of additional time

* Foreman review and sign off of timesheets

* Transport of timesheets to head office from remote sites

* Administrators - entering time into payroll systems reviewing timesheets calling individuals and foreman to validate before finally signing off

* Reconciling timesheets with trips to the dentist, sick time, holidays and other absences

* Time recorded on site but not actually spent on the site

I wonder if you are a main contractor with many sub-contractors on a site and whether some of the causes of time leakage may currently be beyond your control. Or, if you're a sub-contractor, how some of these problems may be beyond your control as it may be that you don't always have your own foreman on site or you can't spend time on the site yourself as you have too many sites.

In either case, considerable amounts of money leak away with lost labour time.

In an environment where people and sites are transient, it's fair to ask:

* Can this problem be solved?
* How can I solve this problem?
* How do I stop the leakage and save money?

When you think about it, it becomes clear that a solution would have to include the following capabilities -

* Accurately track people entering and leaving sites
* Cater for sites of all sizes
* Communicate with head office automatically
* Track clock-ins - in real time
* Integrate data to payroll systems
* Be reliable, robust and scalable

Surely, the technology exists... so why is providing this solution still such a challenge in the construction industry? Primarily for this reason: One size does not fit all.

At least, not until now.

Consider this: A business may be characterised by small numbers of people (1 to 5) going to many customer sites or by large numbers of people working on small number of sites. A business may have small sites or large sites. You may be a subcontractor or a main contractor that simply wants to control labour costs, or you could be a project management company tasked with controlling labour costs. You get the picture.

And you may already be aware that, thanks to advances in technology, all these disparate requirements can now be solved with a single solution.

YOU CAN CONTROL LABOUR COSTS ON CONSTRUCTION NOW

Experience shows that the key to how you can accomplish this is the front-end flexibility that allows multiple and differing requirements to be integrated to a single back-end application. And what if it also provided both main contractors and sub-contractors a single solution while still allowing you to be in control of your own labour data?

I'm not going to say that when you have the ability to gather (in multiple ways) accurate data in the field that integrates the information with the head office, you have the problem solved, because you'll know that when you experience the savings for yourself.

* Large and small sites scan in using biometric devices that return data to the application in real time over the Internet or over the mobile network. No phone lines or broadband required. Such hardware can be easily moved from site to site.

* Individuals travelling to multiple sites can clock-in using IVR (Interactive voice response) or using their mobile device.

Because each method communicates with a central system at head office (ideally a web-based solution that is visible securely anywhere you have internet access), which means that head office gets a complete, real-time, integrated solution that gives you control to end labour leakage, you can start saving a small fortune.

As technology advances you will see the construction industry change, and while some companies will wait until forced to change to stay in the game, others will take advantage of the opportunity to evolve, to get the competitive edge now and put an end to 'wasted time'.

Because this solution has only recently become possible - with the convergence of improvements in biometric technologies, mobile networks, voice over the internet, functional mobile devices, and the desire to cut costs - you may want to speak with people like you who are already enjoying the savings before you decide to arrange for an audit and discover how much you can save.

I wouldn't advise you to get in touch and arrange for a 'time leakage' cost savings audit until you are ready to start saving a fortune!

Vincent Lynch
About the Author
Vincent Lynch is the CEO of Donseed Limited a provider of Workplace Management Solutions to the construction industry with offices in Ireland and the UK. Vincent can be contacted at vincent.lynch@donseed.com or see http://www.donseed.com
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