Field Notes

Insights and advice from the construction field.

How Can You Lower Labor Costs in Construction?

Engineer using laptop on construction site

Are you a construction firm owner who wants to lower your labor costs? The increasing prices of construction materials and energy likely have you looking for ways to reduce your expenses.

Fortunately, you can take steps to save on labor costs while improving efficiency and productivity throughout your construction firm. These suggestions can help.

Choose among these methods to lower labor costs in construction.

Find Creative Ways to Increase Compensation

Reward your workers for their hard work in ways that do not involve pay increases. One of the best methods is to offer additional vacation days for increased work-life balance.

Showing you care about your workers’ well-being lets them take more time off to engage in the activities they enjoy to help prevent burnout. Along with lowering labor costs, this practice elevates:

  • Company culture
  • Engagement
  • Performance
  • Productivity
  • Job satisfaction
  • Employee morale
  • Retention rates

Offer Cross-Training Opportunities

Provide your workers with training to develop their skills to complete additional tasks. Increasing your workforce’s versatility develops the flexibility and problem-solving skills needed to fulfill additional job duties and responsibilities. 

Elevating your workers’ versatility lets you take on more construction projects without hiring additional workers. This practice lowers your labor costs.

Change Your Crew Structure

Determine each worker’s skills, strengths, weaknesses, and capabilities. Then, assign roles that allow your workers to perform their best.

For instance, the supervisor might be more effective as a skilled laborer. Or, unskilled workers might be able to take on additional responsibilities.

Helping your workers fulfill their potential lowers labor costs and minimizes underperformance and project delays. These activities help deliver high-quality results within the timeline and budget.

Minimize Overtime Work

Working overtime increases safety risks and labor costs but not necessarily productivity. As a result, you should consider the following so you can take action to resolve the underlying issues:

  • The amount of overtime you pay out yearly
  • Whether the amount of overtime varies by the season, month, or type of employee
  • Consistent themes in paying overtime, such as a disproportionate amount on Wednesdays 

Along with cross-training your workforce to maximize efficiency and productivity, you should optimize each project schedule to minimize overtime work:

  • Review the project plans and other documentation
  • Determine what each phase of the project should look like
  • Schedule your workers accordingly

Elevate Employee Retention Rates

Maintain open communication with your workers about how they feel about their jobs and your construction firm. Taking steps to create an attractive work environment and encourage employee loyalty reduces the time and money needed for hiring, onboarding, and training.

For instance, focus on receiving constructive feedback to improve the employee experience. Also, resolve as many issues as possible to improve job satisfaction.

Along with lowering labor costs, increasing employee retention rates provides a variety of benefits:

  • Positive work environment
  • Worker relationships
  • Collaboration
  • Team cohesion

Work with a Construction Staffing Agency

Working with a staffing agency that specializes in the construction industry provides a range of benefits:

  • Gain access to skilled, vetted workers as needed
  • Reduce hiring, onboarding, and training costs
  • Pay for only the services used
  • Avoid paying for benefits, payroll expenses, employment taxes, worker’s compensation claims, unemployment claims, and related costs for temporary workers

Partner with Field Talent

Make Field Talent part of your hiring process to lower your construction labor costs. Get started today.