Words of wisdom from Jamie – using labour constants
“Being a Better Business Through Labour Constants”
I am sure you have heard of labour constants and their relevance to your take off. It shows how much of an hour each task should take, based on the measure i.e. 0.5hr/m2. They capture all your respective trades labour to show where you and your teams time should be getting used in the job.
Your labour constants should always be based on the measure, rather than “couple of guys, couple of days”. This ensures accuracy regardless of how many people are on site, or doing said task, the time is allowed for.
These can also be extremely helpful with back costing your jobs. Whether you have gone over the build budget, or come in under it, it is massively beneficial to know where or when you got it right or wrong. Benefits of this are understanding if some staff are more efficient than others doing certain tasks i.e. you may have a crew who are extremely good at boxing up concrete, but slower than another crew at fixing weatherboards. Knowing this means you can allow these guys to stick to tasks they are stronger at, maximizing your efficiencies. From doing this you could also ascertain whether there are any benefits in further training your guys in specific duties to raise efficiencies across the board.
If the job has come in over the budget, by doing the above, you could identify if there was actually a legitimate reason why it has done so, and could be transferred into a variation. Alternatively, although we like to think this doesn’t happen within our systems, it may also highlight that old mate is having 2hr lunch breaks and 1hr smoko breaks, therefore costing YOU a lot of money.
Another beneficial use of tracking your labour constants is transferring hours into your construction programmes, which are often required as part of the tender doc’s, or simply asked for by the client. You can work out when you will have men available and place the hours accordingly to ensure your program is as realistic as it can be at that stage, therefore not leaving your client with any added delays or costs.
I also believe that providing your potential client with a trade summary showing that hours have been separated out, not only adds another level of professionalism to your company, but gives them confidence in your systems. This could ultimately be the difference between getting the job, or not.
At the end of the day, if we do not know exactly the amount of time each task should take, we can not know if it is being done in the time it should be, or whether or not it is coming out of your profits. Constants that are found in literacy are usually noted as “the average builder, doing the average job, under the average conditions”. This means that you can delve a lot further into customizing these, and your approach to pricing jobs, for your specific business.