How to Increase Labor Productivity with Digitalization
Published on by Eric Goodman, Tyler Noel, in Construction, Consulting
Labor productivity has increased across all industries by 2.8% in the last two decades while the construction industry has only increased by 1% during the same time according to Reinventing Construction: A route to higher productivity, a McKinsey Global Institute (MGI) report. Experts believe that digitization could be the solution to closing this gap. Digitization can increase productivity, increase profitability and decrease the frequency of human errors when implemented in the construction industry. A few examples of processes to digitize include:
- Time Keeping and Payroll Processing – Implementing a mobile app or system that starts a time clock by facial recognition can help track time more accurately with less administrative burden to staff and supervisors. A system like this would prevent manual errors and the possibility of staff clocking in for one another.
- Paperless Documents – Converting all paper documents and forms into a digital version to fill out can ensure easy access across multiple locations and reduce time filing and searching. This puts all documents in a searchable database and eliminates having to scan in papers. This can cut down on costs of hours spent rummaging through old file cabinets or non-searchable PDFs.
- Live Field Data – Construction requires a lot of hours in the field and the knowledge gap between workers in the field and in the office can create problems and inefficiencies. Creating a digitized, live field database, usually in the form of a mobile app, can give other departments and supervisors a clear picture of how far along jobs are. This allows them to ask questions and properly monitor progress on jobs across the company. It also allows those in the office to better communicate with those in the field by sending HR or safety updates to company-wide staff or staff on a particular job.
According to MGI research, a company can achieve a 15% increase in productivity along with cost reductions of 4-6% by implementing the digital transformations above alone. Since we are now seeing a rapid decrease in skilled labor, for which the construction industry depends upon, now is a good time for companies to get the most out of their staff.
Additional Resources
Barnes Dennig, North Side Bank and Trust, and USI Insurance collect compensation, benefits, and benchmarking data from regional contractors every other year. Want to learn more or use the construction compensation benchmarking report to create a competitive advantage? Download a copy of the full report now.
Want to hear more about how digitization could benefit your company? Talk with a Barnes Dennig construction industry expert to go beyond the numbers in finding ways to build a more successful future. We’re here to help.
