By Mike Merrill

Construction leaders think they know their business like the back of their hand. But research shows that millions of dollars slip through the company’s fingers undetected every year. These seemingly invisible losses don’t stem from the obvious culprits; construction companies tend to be masters of avoiding direct losses, such as budgetary errors, broken equipment, and on-site injuries. It’s the hidden losses that hurt a business and can hold it back from achieving its greater long-term goals. These include missing out on new project bids, inefficient expenses, and client turnover, which compound to hurt future outlooks and the company’s bottom line. 

In a recent conversation, Jeffrey Nesbitt, the national director of consulting services at Clifton Larson Allen (CLA), shared how contractors need to be on top of their hidden costs. Otherwise, it could mean millions of dollars in losses. “There is the cost of doing nothing,” says Nesbitt. “That’s both fiscal money lost, but more importantly, I think it’s opportunity and visibility.” 

So how can your business get a handle on these hidden costs? It begins with proactively identifying the opportunities that could get you ahead. Oftentimes, this requires taking a hard look at your business processes. The most effective way to do that is with accurate and timely data that reveals where those more obscure gaps are. Here are three areas of your business where hidden losses can reside, and how live field data can help: 


If a company wants to ensure their budget stays on track, they need to accurately track their labor hours and quantities. Problems arise when the tracking isn’t thorough or timely, causing businesses to lose the ability to react to underperforming crews, labor shortages, or decreases in productivity. Companies that track non-productive labor hours like waiting around for another subcontractor to complete their work before starting, or waiting for equipment to arrive to complete the task, are better positioned to control their labor costs because they are collecting data in real time. By accurately tracking labor and quantities, construction companies can drastically reduce non-productive labor hours that reduce productivity and bloat the labor budget. 

Another thing to keep in mind is the benefit of real-time tracking. For instance, it’s exceedingly common for contractors to be in the dark on whether their project was profitable or not until weeks or months later when it’s too late to make changes. But accurate tracking shines a light on their project’s health in real time, so they have time to make adjustments and turn things around. This benefit extends to optimizing employees’ productivity and taking swift action for underperforming crews or employees. 


When contractors focus on improving productivity they often focus on their people. But they need to also focus on safety and equipment. That’s because things like equipment availability and quality, site conditions, and employee health directly impact how effective jobsite production will be on any given day. In the past, construction leaders have sometimes made ill-informed decisions based on inaccurate information using their best judgement, instead of data. Although sometimes quick judgement calls need to be made, this has been a difficult hurdle that required contractors to make decisions or predictions half-blind because they didn’t have all of the proper data. Today, contractors can enjoy access to live field data to give them the insights they need for safety tracking and equipment management to increase productivity instead of just maintaining a status quo. 

Any time a jobsite is shut down or workers are removed from the site due to exposure or injury it causes a ripple effect of hidden costs across the project. For example, delays, infractions, and investigations can wreak havoc on a project time table. Safety failures also hurt morale, decreasing worker productivity. 

Modern technology software tools allow safety to be proactively managed. Live field data visibility allows contractors to evaluate information as it comes in so they can quickly respond to any safety issues or violations, decreasing the chances of accidents and fines. Tracking employee locations as they move from task to task also assists in identifying where a possible safety issue or breach of protocol is so that the possible liability can be rectified and similar situations can be avoided in the future. 


With budgets tight and competition fierce, construction companies can’t operate in the dark. In order to survive, they need to have a strong sense of their historical performance, a solid understanding of the current state of their projects, and the confidence to make reasonable projections about future projects and business endeavors. When companies don’t have a grasp on these areas, hidden costs begin to add up, stemming from poor planning, uninformed decision making, and missed opportunities. 

The good news is live field data unlocks the flow of projects, shining a light on every facet of the jobsite –– it’s just a matter of leveraging these technologies to their fullest potential. Knowing that live field data has the power to connect the past and present to the future, these solutions should be used to help managers convert intangible losses into new opportunities.


Hidden costs hold businesses back from the success that their hard work deserves. Contractors must be able to predict rather than react to increased costs. Live field data lets contractors take this unpredictability and turn it into opportunities and greater profits. 

About the author:

Mike Merrill is co-founder of WorkMax by AboutTime Technologies and host of The Mobile Workforce Podcast. Mike has been an entrepreneur and business owner in the construction and technology industry for nearly three decades.

Modern Contractor Solutions, March 2021
Did you enjoy this article?
Subscribe to the FREE Digital Edition of Modern Contractor Solutions magazine.