In the construction industry, speed is of the essence. The faster you and your crew can successfully complete a job, the happier your clients, and the faster you can get paid. Add multiple jobsites (and the task of juggling several crews) to the equation, and efficiency becomes even more crucial to success. For the sake of profitability, reputation, and organization, construction managers must have the ability to quickly move from task to task … all while staying one step ahead of their team and keeping an eye on the big picture.
Unfortunately, some of the most necessary back-office tasks (like job costing and payroll) have the power to bring that forward momentum to a grinding halt. So, despite the fact that accurate job costing is the most effective way to determine whether or not you’re actually making money, and accurate, automated payroll is the most effective way to keep your labor costs on track, many construction managers are still using paper and pencil or spreadsheets to job cost and keep track of payroll data.
In the rush of business as usual, some opt to forgo job costing altogether and resort to inaccurate time tracking and payroll operations. They convince themselves that gut estimations, rather than real numbers, are good enough—and then cross their fingers as the job progresses.
Here’s the deal: Without job costing, you’re operating blindly. And despite popular belief, job costing, labor tracking, and running payroll doesn’t have to be a distracting, time-consuming, or complicated task. In fact, when you have the right tools in your virtual toolbox, you shouldn’t have to slow down at all—you just might even speed up.
ACCURATE-TO-THE-SECOND TIME TRACKING
Think of it this way; when it comes to job costing, what’s your biggest expense? Often times, it’s not your materials or your equipment. It’s your labor. And if you’re not factoring the true cost of your employees into your budget, your labor estimates are almost always going to come up overwhelmingly short, which means a serious loss in profits for your entire team.
To estimate the true cost of an employee, you’ll need to add up their cost per hour, payroll taxes, benefits, PTO, and any of the equipment, tools, or supplies that you’ve given them in an effort to help them perform their job. Don’t forget to factor in the hidden costs each employee carries: things like overtime, employee time theft, and the time it takes you to collect time cards, create invoices, run payroll, give performance reviews, and, of course, rehash those same numbers over and over again on paper or on a spreadsheet.
Suddenly, an $18 per hour employee costs somewhere north of $28 per hour—and if you want to make a profit on employee labor, you’ve got to knock that number up even further. When it’s all said and done, that $18 per hour employee really comes in at something closer to $41. Now, factor in employee productivity (knowing that no employee can be 100 percent productive 100 percent of the time), and you’re looking at a number even higher than that. When labor is such a huge component of your job costing efforts, it’s critical to make sure it’s accurate.
THE SOLUTION
From accurate-to-the-second mobile time tracking, to detailed reporting and payroll ease, online time tracking makes job costing easier than ever.
Here’s how:
You need a time tracking system that’s fast, easy, and more than capable of keeping up with the momentum of your jobsite (even if you have multiple locations). With mobile time tracking, workers scattered across multiple jobsites can clock in from their mobile device the moment they arrive on location. No need to guesstimate how long they’ve been on the job, or round to the nearest hour when they arrive—mobile time tracking gives you accurate, real-world numbers that you can actually use.
Tracking time against multiple job codes allows you to see exactly how much time is being dedicated to each specific task and identify which employees would be best suited (and most cost effective) to complete future tasks. Built-in GPS tracking promotes employee accountability (say sayonara to buddy punching or milking the clock) and allows you to see exactly where your employees are at any given time (a life saver for managers of multiple jobsites).
A mobile time tracking solution that integrates seamlessly with your favorite payroll provider knocks hours off your back-office tasks: No more deciphering shorthand, manually pulling numbers from paper time cards, or punching endless digits—effectively lowering the cost of your employees by lowering the amount of time you spend on payroll.
Finally, a system that allows you to create customizable alerts will enable you to keep your crew on track (and in budget), and up-to-date reporting (backed by real-world data) allows you to precisely gage your profits and estimates in real time. ■
About The Author: Jennifer Hetherington is vice president of marketing at TSheets. For more information, visit www.tsheets.com.
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Modern Contractor Solutions – February 2016
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The True Cost of an Employee
