Eliminate waste, increase productivity - A quick guide to Lean practices for construction professionals

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How to calculate and improve labour productivity in construction

Written by LetsBuild

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The construction industry has a unique problem when it comes to calculating and improving labour productivity: Every project consists of a wide variety of tasks that differ from site to site.

However, even with this challenge, there are some methods to calculate labour productivity in construction.

Free eBook: Quick guide to Lean practices for construction professionals

3 strategies to calculate labour productivity in construction

Labour output per day in construction is a common way to calculate labour productivity by measuring how much work gets done each day. However, there are various opinions about what factors affect labour productivity and the best way to track it.

These are the top three ways to calculate, measure, and track labour productivity in construction:

1. Calculating labour productivity with gross value added

A report from Whole Life Consultants Limited determined the best way to measure labour productivity as a whole is by using gross value added (GVA)—the total output of labour minus purchased services.

According to this report, the factors that affect productivity include both internal and external ones—factors your organisation can control and ones it cannot.

Internal factors that affect labour productivity include:

  • The time spent on each activity
  • The experience and skill level of workers
  • Planning and scheduling practices
  • Preventable delays

External factors that affect labour productivity include:

  • Supply chain issues
  • Economic changes
  • New laws and regulations
  • Competing companies

Lean construction techniques on site | LetsBuild

2. Calculating labour productivity by creating a benchmark

A study by Carnegie Mellon University (CMU) suggests measuring and tracking labour productivity by creating a base level of productivity for common tasks. It’s a simple but effective method—determine how long it takes for a certain number of workers to complete a certain task and use it as a benchmark for future projects.

However, this doesn’t account for a project’s work conditions. CMU suggests estimating the factors related to work conditions for each project and creating a sliding scale—the labour productivity index—to compare productivity between projects.

This study breaks down labour productivity into three categories:

  • Labour characteristics (experience, skill level, leadership, motivation, etc.)
  • Working conditions (site accessibility, labour availability, job complexity, etc.)
  • Non-productive activities (rework, delays, absentee time, etc.)

Further reading: Most common construction problems and how construction management software can solve them

3. Calculating labour productivity with the 17-factor model

The University of Warsaw created a labour productivity formula consisting of 17 factors. And while the researchers agreed that there’s no completely accurate way to account for every worker’s unique traits, abilities, and preferences, this mathematical model is quite efficient.

It accounts for the human factor and the different things that affect a construction worker’s productivity by looking into five categories:

  • How each worker spends their time outside of work
  • Weather conditions on the jobsite
  • Psychological conditions affecting each worker
  • The organisation, management, and safety on the construction site
  • Other factors, including the day of the week and the implementation of new technology

3 ways to increase labour productivity in construction

It’s important to look at labour productivity from the right perspective—while employees and contractors are responsible for achieving your organisational goals, they aren’t necessarily at fault for low labour productivity.

Improving labour productivity in construction starts by looking into why it’s low in the first place:

1. Understand why labour productivity is low

It’s not hard to assume that your labour productivity is low because of the workers—they’re lazy, they’re always late, they’re unskilled, etc. However, most of the time, that’s not the case; your employees are likely highly skilled and hard-working.

Start looking into external factors that might be affecting the productivity of your sites. Are workers waiting for materials to arrive, someone to fix their equipment, other teams to complete their tasks, etc.?

Visit the sites with low labour productivity, monitor the activities, and look for ways to increase inefficiencies and make improvements for your workers.

Read more: How technology can help you mitigate the construction labour shortage

Construction team | LetsBuild

2. Set realistic goals and work on communication

Setting goals that are unrealistic for your employees can directly impact your labour productivity—workers feel the need to rush, leading to mistakes and delays. Creating achievable goals also helps employees feel personally accountable, increasing both confidence and productivity on construction sites.

But goals mean nothing without effective communication, which significantly impacts your labour productivity. Communication allows workers to complete their tasks efficiently and properly explain any on-site issues to management to resolve what’s causing the decrease in labour productivity.

3. Invest in construction management software

One of the best ways to improve labour productivity is with the right technology to help your construction company manage its projects. Ideally, this software should allow for easy, real-time communication between teams—both in the office and in the field.

A unified system to connect your teams, automate reporting, stay on schedule, and reduce your administrative burden is the key to improving labour productivity in construction.

Gain complete control of your projects, improve your labour productivity, and deliver on time and on budget starting now—book your personalised demo of LetsBuild, and see how we can help you deliver measurable results immediately.