Balancing your bottom line in the construction industry can seem like a juggling act. Costs for labor, supplies and materials continually go up and down depending on factors completely out of your control. This uncertainty makes planning out budgets and bids a challenge – to say the least. To help cushion the blow of bloated and fluctuating costs, offset the costs you can’t control with the ones you can.
Rising Gas Prices
Anyone with a vehicle (and even those without) is aware gas prices are going up – and up – and up. Average prices for regular and diesel gas recently broke records in the US. And while there are a few things that are causing the increase, the main reasons are the Russian invasion of Ukraine and the rise of inflation, according to USA TODAY. US/European Union sanctions on Russia that hindered the country’s ability to sell crude oil is one of the biggest determiners for gas prices. Since Russia is a huge supplier of crude oil in a global market, prices have gone up. Even though the US doesn’t import all that much Russian oil, in a global market, scarcity anywhere drives up the price for everyone.
(Not to be upstaged quite yet, COVID-19 is still affecting prices as well. A large of number of mandates have been lifted recently, leading more people to travel, which always bumps up prices.) With GasBuddy predicting the worse is yet to come, with prices expected to peak in May, construction companies need to figure out a way to offset the rising costs during their busy season.
One way to address these rising costs is to start tracking your workers, vehicles and equipment to eliminate unnecessary trips and improve efficiencies. Using a time tracking app with GPS allows supervisors to immediately track workers and job sites, making supply runs and deliveries much more efficient. Plus, you won’t need to have someone drive from worksite to worksite collecting paper timecards.
Rising Wage Costs
Along with gas prices, the costs associated with employee pay have increased. Construction labor wages were up 4.46% from August 2020 to August 2021. This makes sense because companies have had to raise wages to attract workers. Labor shortages, due to a reduced number of workers entering the field, mass retirement of Baby Boomers and shortages as a result of the pandemic, mean construction companies must offer their employees more than their competitors to secure a strong workforce. While rising wage costs can’t be controlled, making sure you’re paying workers accurately for the hours they work and not absorbing the costs of accidental or purposeful time theft can benefit the bottom line.
If you’re still using paper timecards to track worker hours, you might be leaving your company open to time theft from buddy punching and inaccurate recordkeeping. Buddy punching is where an employee has a co-worker clock them in or out when they’re not at work. For example, an employee is running late and calls a co-worker who’s on time to punch them in as well. If you have an employee who has a buddy punch them in 15 minutes early, two to three times a week, that stolen time can quickly add up, artificially bloating your labor costs and undermining your bottom line. Using a mobile time clock app helps eliminate time theft with built-in security features, like biometrics.
Rising Supply Costs
Along with gas and labor, supply costs have also risen. From August 2020 to August 2021, material costs rose 23.1%, making estimated project costs skyrocket. And, depending on project timelines, you may have to eat those costs if you budgeted materials when they were priced lower. Rising materials costs can be added to future proposals but if your bids are too high, you might lose out to the competition. But construction companies still must remain profitable and automating other processes can help save operating costs.
Consider how much time it takes your payroll department to manually transfer data from paper time cards to your payroll system. It can not only eat up multiple hours a week but is prone to human error leading to inaccuracies. Implementing a system that relies on a mobile time tracking app instead of paper can streamline the process. Having a digital time clock app talk to your accounting and even workforce management software can save time which translates to saving money, plus paychecks will be accurate and on time every week.
There will always be variables that affect the cost of doing business in every industry, and construction is no exception. But adopting more efficient processes can help lessen the impact of uncontrollable costs. Construction and contracting companies may have an easy lever to pull by transitioning to digital time tracking. Eliminating unnecessary trips can reduce fuel consumption, reducing time theft saves on labor costs and streamlining payroll processing saves time and money.