The Financial Impact of Workflow Inefficiencies on Construction Projects

Time is money in construction, and any workflow inefficiencies on projects have a financial impact. 

Project estimates are built upon how long it will take to complete a job. If your teams can’t finish jobs on time, your business loses money. 

Did you realize, though, that you might be setting your workers, and your company, up for failure with your internal workflows? “In construction, a surefire way of throwing hard-earned cash away is through bad processes and inefficiency,” writes the BUILD Magazine team. 

That’s why it’s so critical that your workflows are as efficient as possible.

Workflow Inefficiencies Negatively Impact Your Business’s Bottom Line

Inefficient workflows make it harder than it needs to be to complete tasks. When those tasks take longer than planned, costs start to add up and profit margins shrink, sometimes significantly.

“When a construction project lacks efficiency, the construction project’s cost could easily double or triple,” writes Jeff Collins, CEO of Innovative Management Solutions. 

Here’s how poor processes lead to higher costs. 

Inefficient Processes Lead to Rework

Doing the same work over and over again gets expensive in construction. Rework derails project costs because it isn’t accounted for in the project planning phase and there is almost nothing that can be done to recoup associated costs. As CBRE Senior Director James Hanley, explains, rework takes up time without adding value. 

Complicated Workflow Processes Result in Labor Waste

Administrative tasks are an unavoidable aspect of working in construction. Daily reports, time cards, field notes, change orders, and numerous other project documentation requirements all take time to complete. Exactly how long it takes to complete those tasks depends on how simple or complicated the submission processes are. 

If your company still uses paper or spreadsheets, you are complicating those processes and creating unnecessary labor waste. These methods are innately inefficient. The highly-skilled workers you have hired to perform project-specific work end up spending more time on complicated administrative tasks and less time on productive project work.

“The impact of labor inefficiencies on project costs can be significant,” writes the team at Ground Penetrating Radar Systems. “Delays and rework not only increase direct labor costs but can also lead to penalties for missed deadlines, additional material costs, and increased overhead expenses.” 

In fact, a labor productivity study conducted by FMI Corp. concludes labor inefficiencies cost contractors in the United States between $30 billion and $40 billion in 2022. And it’s getting worse with “almost half of respondents (45%) [seeing] declining labor productivity.” 

Process Inefficiencies Hinder Business Growth

No doubt you want to scale your business as much as possible. However, if your workflows are so inefficient that you are struggling to maintain profitability on your current projects, how can you take on additional work? 

Inefficient workflows limit your ability to grow your business because administrative tasks take up more time than they should. That’s time your teams could be spending on additional profitable projects but it’s wasted on bad processes instead. As a result, your business growth is stunted.

Construction Project Management Software Solves the Problem of Inefficient Workflows

To create more efficient processes and improve your company’s profitability, you need to implement a construction project management tool, like eSUB. The technology is specifically designed to enable trade contractors to perform administrative tasks more quickly so they can spend more time on project-specific tasks.

The tool mitigates rework by improving communication, cleaning up project data, and standardizing documentation submissions. It reduces labor waste by making it easier for workers to complete administrative tasks so they can do the work they are hired to do. In the end, these workflow efficiencies enable you to take on more work.

Schedule a demo of eSUB Cloud today to learn more about how it can help your business become more efficient and profitable.

Images used under license from Shutterstock.com.