How much of your profit is going down that proverbial rat hole?

Let's begin with the most expensive waste and abuse of your dollars:
    1. How many actual work hours do you get each day for your eight-hour paycheck? 'Our industry average for all trades is six-and-a-half hours!'

    2. What is your total labor cost per hour, including wages, benefits, insurance, labor burden and company overhead?

  • Contractor A with 10 employees
    15 hours per day @ $35 per hour = $525
    75 hours per week @ $35 per hour = $2,625
    3,900 hours per year @ $35 per hour = $136,500

  • Contractor B with 20 employees
    30 hours per day @ $35 per hour = $1,050
    150 hours per week @ $35 per hour = $5,250
    7,800 hours per year @ $35 per hour = $273,000

  • Contractor C with 50 employees
    75 hours per day @ $35 per hour = $2,625
    375 hours per week @ $35 per hour = $13,125
    19,500 hours per year @ $35 per hour = $682,500

  • Contractor D with 100 employees
    150 hours per day @ $35 per hour = $5,250
    750 hours per week @ $35 per hour = $26,250
    39,000 hours per year @ $35 per hour = $1,365,000

    The math is easy. Multiply your total number of employees by the number of hours you lose each day. Multiply that figure by your labor cost. Five times that number will show you what you are wasting each week. Your annual total is the real shocker.

    Assuming your total labor cost is $35 per hour and you are losing one-and-a-half hours per eight-hour day, let's look at some painful examples:

    These are just averages, but you can do the real math with your company's numbers. Surely you have better uses for all that wasted profit!

    Typically our biggest contractors are also the biggest losers. In addition to having far less control of actual working hours, their math for a large number of employees becomes ridiculous. They are wasting more profit than most companies make.

    We are not limiting this excessive waste of valuable dollars to our plumbing and mechanical contractors. All of you who visit your jobsites should check your watch at starting time, coffee break starts and stops, lunch breaks and quitting time. Count those wasted minutes and look around to see how many of the other trades are controlling their work hours.

    You should also consider how much extra manpower you could save in today's critical, skilled-craft crisis. Seven employees working a full eight hours could perform more than eight who are working only six-and-a-half hours. Do the math!

    Managing The Jobsite

    Construction is a very competitive, free-enterprise, profit-making industry. All of that wasted profit belongs to the contractor and those hours are definitely controllable. But you cannot control how many hours each employee works from your office or with frequent jobsite visits.

    Common sense (which is not too common) tells you that your jobsite foreman is the only person who can control how many hours each employee works, as well as how much he or she does and how well he or she does it.

    The big question is, why don't they do it?

      1. It is not because they don't care. You would not have selected him or her to run your job if he or she didn't care.

      2. Many foremen are disgruntled over minor grievances that dampen their efforts.

      3. Some foremen have a socialistic attitude that your company is rich and already makes too much profit.

      4. Most contractors do not negotiate a “scope of work” written job description.

      5. These contractors do not keep score of above and below agreed-upon performance and reward accordingly.

      6. Their foremen are too busy to worry about how many minutes each employee loses each day. No one ever showed them the math.

      7. More than 90 percent of America's foremen in all trades were never taught or trained to manage employees. In addition to motivation, safety, productivity, discipline and quality control, your foreman must be constantly aware of excessive fines for OSHA violations, unfair labor practices, discrimination and sexual harassment.

    This is a terrible injustice for any contractor to expose a proud and diligent craftsman to all of these management responsibilities without proper training. You could compare this to expecting a foreman to install the mechanical system in a new hospital without ever seeing a code book.

    Having worked jobsites with these diligent foremen for more than 30 years, I changed careers in 1970 to spend at least one full day training foremen and potential foremen. Some of this training involved seminars with trade associations and some with customized programs for individual contractors.

    Our one-day interactive program shows each of your foreman how to properly discipline and maintain the respect of their employees and their peers. Scorekeeping performance files will then guarantee you are getting eight hours of work for their eight-hour paychecks

    In addition to this much-needed discipline, we stress the importance of:

  • Knowing the plans, specs, shop drawings, as-builts, contract language and codes.

  • Having the proper tools, equipment and materials on site and delivering prompt returns.

  • Timely jobsite paperwork, job logs, cost codes and delivery tickets.

  • Cooperation and compliance with the customer, design team and inspection agencies.

  • Coordination and horse trading with the other trades.

    Can you afford this training for all of your management team? Do the math!

    Most trade associations charge their members about $200 per attendee at our foreman seminars. Our total fee, including all expenses, for an in-company seminar is only $2,000. These can be conducted on Saturday or from 1 p.m. to 9 p.m. on a work day.

    When you compare these training costs to your math for whatever profit you are now losing, you can easily see that you really can't afford not to train your foremen.

    Keep in mind, there is no such thing as too much profit!