How to Increase Productivity Without Increasing Headcount

The construction industry has the potential to boost its value by an impressive $1.6 trillion, but companies also face mounting pressures to stay competitive while keeping tight control of rising costs. Manual processes are no longer cutting it, and any organization hoping to reach that potential needs to adopt efficiencies that will enable them to do more work in less time without tacking on a ton of extra overhead.

Here are a handful of ways construction companies can modernize their processes and strengthen relationships to increase productivity without adding headcount:

Streamline Back Office Processes

It’s estimated that employees at construction companies spend 35 percent of their time on “non-optimal” tasks, such as searching for project-related information and correcting mistakes. That equates to almost two working days per week that could be better spent on higher priority activities that directly impact profitability instead of rework and repetitive tasks. To empower teams to work smarter rather than harder, companies need to help free them from mundane, non-optimal tasks and improve the back-office processes they rely on to do their jobs.

According to a McKinsey report, one reason for the industry’s poor productivity record is that it still relies on paper to manage its processes and deliverables, such as blueprints, drawings, orders, invoices, progress reports and punch lists. Eliminating paper – which easily piles up and is prone to falling through the cracks – is an important step in streamlining back-office processes. Digital data will help to eliminate paper and improve access to valuable information that, when properly shared, can reduce errors and speed project delivery times. Automating paper-based processes will also significantly reduce time. For example, companies can cut the time it takes to process one invoice from 10 days to just three days.

Utilize Technology

There are many ways that technology can help construction companies better manage jobs and costs, but employees may be hesitant to adopt new ways of working. According to 2019 Engineering and Construction Industry Outlook, companies who invest in digital innovation and embrace the support technology provides gain a clear competitive advantage over those who resist.

Technologies, such as cloud-based construction management software, take advantage of real-time data and collaborative sharing tools to help firms perform various tasks, such as managing drawing and specs and connecting them with RFIs, punch lists and photos to increase productivity, boost efficiency and ultimately add competitive advantage. Additionally, there are many mobile application extensions, like Procore and Buildertrend, that make it easier for firms to manage, access and share information remotely rather than wasting time money on travel back to the office.

Other solutions solve for time-consuming manual tasks, allowing employees to focus on more important work while eliminating the element of human error for more accurate results. Automated construction workflows help firms avoid expensive work redos, cut costs and mitigate project risks. Accounts payable (AP) and payment automation eliminates time-intensive paper-processes and enables tremendous operational efficiencies that provide cost savings, increased workload capacity and improved financial accuracy.

Strengthen Vendor Relationships

Forging strong relationships with contractors and suppliers is vital to productivity as jobs depend on reliable, committed workers. Adopting vendor management best practices will help strengthen relationships with suppliers, build loyalty and earn trust. This includes providing simple onboarding processes; clear visibility into account status and payment; flexibility to choose preferred method of payment (Check, ACH+ or VCC); and prompt, accurate payment.

Mutually beneficial relationships require open, honest communication, and a commitment to working toward shared goals. Relying on manual systems for managing the relationship—such as housing data on local hard drives and spreadsheets, and resorting to unscheduled travel to job sites to stay in contact—is time consuming and inefficient. Improved processes will help to solidify these valuable partnerships.

Preparing and Positioning for Success

Increasing productivity doesn’t have to mean more hires for construction teams as work volume increases. By adopting new ways of doing business, leveraging the support technology provides and strengthening relationships, construction companies can efficiently manage more work, and protect their bottom lines – all with the same staff they have today.

Automating the AP and payment processes is one of the most impactful moves construction companies can make, ridding their AP teams of trivial processes that take up a lot of time, allowing them to focus on better margins. AvidXchange is the leader in AP and payment automation. Connect with us today to see how your company can save valuable time and resources.

Written by Jim Campbell, VP of Construction Sales at AvidXchange for Construction Dive

Trenton H. Cotney

Florida Bar Certified Construction Lawyer

Cotney Construction Law, LLP

3110 Cherry Palm Dr., Ste. 290

Tampa, FL 33619

www.cotneycl.com