People Utilization is possibly the most difficult "waste" to manage, and it represents those efforts that leverage our workers poorly, sometimes even setting them up for failure. Getting the best performance from your workers requires you to be strategic in utilizing their skills, talents and attitudes — all of which should produce greater results and profits. Employee utilization is a huge potential waste just waiting to unleash its nonproductive and costly consequences.
As labor costs can account for 65 percent to 85 percent of your actual job costs it certainly pays to be clearly focused on how you position your people.
Think about a few realities that have become common for many business owners today:
- It takes a new employee longer to become educated and acclimated to her new position before she becomes productive.
- Few contractors offer a formal one-to-two week orientation and training format, thus exposing new workers at times to unsafe and nonproductive work situations. This leads many workers to quit soon, not confident that the contractor respects or cares for them.
- An increased number of new construction workers are coming to the industry with fewer skills than ever before.
- Older and experienced construction workers are slowly leaving for less-physical work opportunities or are retiring. Experienced people are not filling the increasing “void” quickly enough.
- With fewer workers in the pool of candidates, contractors are seeing less talent that wants more pay than what the contractor wants to spend to acquire.
- Because less-skilled workers are coming to the construction industry, contractors are often left with stretching their current workers, over-extending some workers in situations that they have not been exposed to or trained to complete.
Now, while some of the realities can bring on a cold sweat just thinking about them, what are some of the actual situations in which a contractor can poorly position his or her workers? Let’s consider a few examples that perhaps you have experienced in your company or on a project.
- Tasking an inexperienced worker to complete a difficult job
- Creating a “make-shift” crew without considering the individual members' talents, skills, personalities, etc.
- Hiring a new worker and then just putting her to work without any orientation, training, etc.
- Putting workers on projects that others are better suited and skilled to address
- Taking a “people-pleaser” office worker and trying to make a “numbers person” out of him because your bookkeeper retired or quit
- Workers are making mistakes but there is little to no supervision to correct, coach and instruct on proper technique or to instruct on material, tool use, etc.
- Placing too many workers on a project or crew, thus increasing the likelihood that some workers will be standing around
- Placing to many or too few workers on a project or crew because the foreman or scheduler doesn’t know how to calculate productivity rates — which should provide a more accurate assessment of how many employees are needed
If people really are our “#1 asset” then it would seem likely that more contractors would do more to protect this “asset” and work to strengthen their performance, knowledge and skills. While some contractors do a great job of utilizing their manpower effectively, others struggle just filling the “holes” with whoever might be available at the time.
There must be a better way to truly improve utilizing your workers so that greater performance is achieved, producing greater profitability, resulting in greater customer and employee satisfaction.
The following are some leadership efforts to reduce the negative impact resulting in poor people utilization.
Utilizing your people the right way
1. Develop a company orientation
Trust me. Most employees want to know something more about your company. They want to know what the company stands for, where the company is going and what future plans do you, the owner, have that confirms you have a plan for success. An orientation session can address these and other thoughts and interests. Sure, you’ll include more of your “HR” issues, too, but don’t overlook sharing with the new employees what sort of contractor you are working to become.
2. Develop basic training classes fit for your company
While few contractors are writers of training literature ALL contractors must provide training to their workers. If you’re a seasonal contractor, use some of the offseason to provide training. If you are a 12-month contractor then have a few training sessions in your back pocket for those days when you can’t work due to weather or customer reschedule. There is simply no excuse for NOT training! Keep the training basic, easy to present and discuss, and as much hands-on focused as possible.
3. Create a “depth chart” of employee skills and experience
Even the high school football coach makes use of a depth chart that lists his team’s players, what skills they have and how much experience they possess. Sometimes called “first team, second team,” etc., the identification can provide instant recall to the coach in the middle of a hotly contested game when a key player is injured. The depth chart provides at a quick glance who should replace the injured player.
For the contractor, the depth chart might map out some of the following areas including:
- Equipment proficiency
- Tool proficiency
- Knowledge of material used
- Capability to make decisions
- Fast worker, methodical worker, slow worker
- Quick learner, slow learner
- Experience level in different roles
I used to use a simple rating of “1 -2 - 3” with “1” representing less than adequate, “2” representing adequate and “3” representing better than adequate. I rated each of my employees using this scale. It wasn’t “Einstein” in complexity but it got the job done in helping me figure out who I had working for me and even who could assist me in putting crews together for some projects based on what we would need to get the job completed.
4. Make sure crew leaders can calculate productivity rates for their crew
While most of our folks who estimate can calculate productivity rates, a surprising number of crew foremen cannot perform this rather simple math exercise. But think about it, how can you correctly consider how many workers you’ll need for a particular project if you do not understand what amount of labor is needed?
Too many “old school” foremen were use to simply always having seven guys on their crew. If they were sent to do a job that only required five workers, the foreman would still take all seven. Why? “Because I’ve always had seven men working for me.” Great heart but poor consideration for the actual financial impact of having too many workers on a job that was sold to use five workers.
Train your front line leaders to measure their crew’s productivity and update this a couple of times per month. An average rate will soon begin to appear that can help the crew leaders determine how to utilize their workers.
5. Work hard to fit the right people to the right job
Ok, this is not always possible, but you must exert some effort to position people in jobs that best fits their skill level, interest, personality and past performance success. The classic example in construction is making the best crew worker — the best craftsman — and your new foreman. In many cases this proved that sometimes your best workers don’t want to be the boss; they are very happy being the best craftsman.
Again, we can’t always place our people in only the perfect fit job but we do need to try to do so. It’s just a fact; if our workers are good at what they can do and are happy doing it they have a tendency to stay longer, work harder and produce better results.
If you must position one of your workers in a role that really isn’t a good fit then be honest with the worker. Acknowledge that you understand his frustration or apprehension about doing the new role but that you will work with him, support him and provide some additional resources to help him through the process. This may not always calm his frustrations, but it just might provide you with some sort of “bridge of time” to find a better-matched worker for the job.
6. Challenge your field leaders to “man up” and lead, teach and coach
Today’s construction leaders must step up to the plate and practice being a leader. This new leader must lead, teach and coach regularly. We haven’t the time to send every employee out to a week’s “apprentice” class. Therefore, your field leaders must be more in tuned with taking the initiative to lead workers toward better decision making and problem solving, teaching more about how to perform work and then coaching their workers whenever there are challenges or mistakes on how to self-correct based on the company’s process and preference.
7. When possible…staff lean
The first step to chaos and jobsite anarchy is having too many people on the job. Because most of us are running a little thin with workers anyway this is not a huge problem. But there is still the temptation to overstaff a job if it poses some uncomfortable challenges or if we happen to have a few extra guys without something to do. Don’t just give your field leaders extra hands without a clear purpose for the extra staff. More often, a bit leaner staffing on a job keeps more people focused and busy rather than leaving a few guys with little to do. Idle hands often lead to laziness and lack of focus.
Remember, our people really are our most important assets in construction. So let’s treat them with the respect due them, as they are the executioners of work processes, strategies and customer satisfaction.
