Why a Labor Plan is a Critical Piece of Workforce Management
The job was too big to pass up. An auto plant in the Midwest was changing its production line. It meant work, nearly a year’s worth for our entire company. And it almost broke me.
Contractors get the job done, even if that job is set in a plant that stretches for more than one million square feet. Yet there’s a difference between getting that job done and doing a job well. And the difference, when it comes to workforce management, is whether or not you have a labor plan.
We Got the Work.
The notice went out that a major automaker was retooling a plant to shift production from sedans to SUVs. The amount of electrical work needed would be staggering. Our company’s estimating team started bidding and winning work. And then we kept winning work. And before you knew it, we had won more work.
I was the general superintendent at the time. I was responsible for all our projects and I popped by on a Friday evening shortly after we had started the job. I talked to the foremen and started to get a bit uneasy. So, I came back on Saturday and Sunday and we talked some more. The list of what we needed grew and grew.
Step 1: The Value of an Estimate
This is the moment when the first part of a proper labor plan -- an accurate estimate based on historical projects and the needed skill mix -- was critical. But our labor plan didn’t account for the collective volume of labor it would take to get this job done.
On Monday, I went to see the owner of our company.
“We need a lot more tools,” I said. “And I called the union hall and told them to send us men and not to stop until I told them to stop.”
“Wait a minute,” he said, trying to understand what I was telling him.
“This is what has to happen,” I replied. “Or we’re not going to get the job done.”
The next week was a blur. I tried to get as many tools and men as I could in order to try and right the ship. But in the middle of scaling up, I discovered a problem that threatened to derail the entire project before it had even gotten off the ground.
Step 2: Plan for Surprises
Without a plan in place, you don’t have the flexibility to adjust to changing circumstances. You’ve got your head down to get the work done. It’s hard to look up and look across the entire project. Construction workforce management is about proper resource management.
The automaker had put a challenging clause in the contract for working in the plant. None of the trades could work overtime. The only way I could attract people to the job was to offer overtime. Without overtime, I couldn’t get the people we needed. We were losing ground. We were losing ground every day.
With all of the trades in pretty much the same position, the owners of the contracting companies sat down with the automaker and told them SUVs wouldn’t be rolling off the line that fall if they didn’t grant us the ability to offer overtime. The auto company gave in. I walked out of that meeting and I threw up from the stress.
Step 3: Know the Cost of Labor
With labor counting for roughly 40 percent of your job cost, labor scheduling is where you can lose or make up a lot of revenue. The key to saving money is to understand your labor cost in relation to the other project costs and the stage of construction.
As the calendar turned to summer, I was still constantly hiring. I found nearly a dozen college kids, who ended up making a journeyman’s rate. A lot of them worked as many hours as they could and banked more than $50,000 that summer. Not all of them went back to college. Some are still working as electricians.
The whole plant was filled with construction workers putting in 80 to 100 hours a week. Every construction worker was walking around like zombies. A task that would normally take four hours was now taking two days to finish.
This was a productivity issue I couldn’t solve because I didn’t have the people to do it. I just did the best I could to manage around it. There were several nights I slept in our job trailer just to try and get the work done.
Step 4: Know the Cost of the Job
You’re going to finish the work; but it’s important to understand what finishing the projects costs you in dollars, time and opportunities. Construction labor plans are a critical part of staying on budget.
We shut down our entire company and pulled every electrician and service person we had to work in the plant. It was like a war. I lost 25 pounds. Although it didn’t hurt too much, I had 25 pounds to lose.
We worked for four months straight to get the job done. About a week before the plant was scheduled to go into production, I knew that we were going to make it.
I called my boss to tell him. I broke down and started crying like a baby because the stress and burden had lifted.
This is an extreme example of what happens when you don’t have a labor plan. Contractors are really good at putting their head down and trying to will their way through something.
They’re really good.
They know how to get things done.
And that can make it easy to think you don’t need a labor plan because you’re just going to get through it anyways.
If a job is going to turn south, it usually becomes apparent at around 60 percent complete. That critical meeting about overtime in the auto plant? That happened in July, two months before the plant was slated to be up and running.
That should have been the peak, the moment when we began to return labor to other jobs and scale down. Instead, we were in catch-up mode and had to keep adding people. Every day that goes by is less time you have and you just get crushed.
When a job does turn south, it begins with a light sprinkle. Then, it starts to rain a little bit harder. And the next thing you know you’re in a full-scale monsoon and it keeps pouring rain until the job is done. It’s horrible and it happens more often than a lot of people would believe.
Get yourself an umbrella. Make a labor plan.