Construction business owners are facing a dilemma that no one is talking about. The ongoing 10-year labor shortage has put them in a bind—but surprisingly, not exactly one you’d expect.
Most construction workers self-report their hours. They often estimate the time spent on each project at the end of the week rather than accurately documenting it daily and in real-time. Because it’s nearly impossible to try and retrace one’s steps back five days, inconsistencies can prove detrimental to a company’s bottom line.
Inaccurate reporting is costing owners hard-earned profits. One owner with 15 workers estimated an annual loss of almost $25,000 from overpaying on payroll. The use of analog time reporting has prevented management’s ability to cross-check their payroll expenses against precise documentation to confirm for accuracy (and integrity).
Even though this issue is tearing up owners inside, why haven’t many done anything about it?
For most, it’s a delicate topic. It’s proven risky to address this issue with workers, out of fear that owners could offend and lose their team in the middle of a 10-year construction labor shortage.
How Did We Get Here?
Management knows how challenging it is to track distributed workers and manage multiple projects simultaneously. Yet even in 2021, analog methods are a primary practice for most construction companies, regardless of being a known source of errors and inefficiencies.
Self-reported timecards are notoriously inaccurate for a number of reasons. First of all, workers can be negligent to accurately note their hours throughout the week before submitting via spreadsheets, paper, and even text messages. By the end of the week, they’re guessing—and maybe even overestimating—the amount of time they spent in the field.
Additionally, some workers neglect to track their breaks. A quick smoke break here or a fast lunch there really adds up on the clock. Reported time at the end of the week often doesn’t reflect these small pockets of time where workers mentally and physically check out, even momentarily. Clocking in early or clocking out late both contribute to inflated payroll as well.
If employees regularly overestimate their time worked—even by only a small amount—the total losses created for a company over the course of a quarter or year add up. In fact, we estimate that the construction industry in America is losing more than $7 billion annually in excessive payroll expenses due to inaccurate time tracking.
So, owners are faced with the dilemma between maintaining good relationships with employees and protecting their bottom line. How do you hold everyone equally accountable and eliminate time theft (both intentional and unintentional) without demolishing trust? While many owners have a hunch that time cards are coming in with inaccurate numbers, they have no tangible proof. The system has no accountability or strategic ways of tracking. And replacing the team with new, skilled workers could be nearly impossible, thanks to the labor shortage.
The Answer to Tracking Time Accurately and Eliminating Payroll Waste
As it turns out, there is a better way. Many business owners have turned to software to create a culture of transparency in their companies.
The answer to tracking time more accurately and eliminating waste in payroll involves:
● Reporting timecard data in real time
● Including a GPS audit trail of self-reported hours
● Automatically turning hours into wages to share with your payroll provider
By using an app on their phones, employees can improve accuracy by reporting their time more frequently. Supervisors can have confidence in self-reported timecards thanks to GPS-driven information about jobsite arrival and departure times.
The same type of apps can be used to compile and view info about travel time between sites, work progress, and job costs all the way down to the cost code.
The benefits of leveraging this kind of tech are two-fold. First, it minimizes the errors and inefficiencies intrinsic to the old systems. Second, it accomplishes that without requiring owners to make accusations or question employee loyalty. It is transparent. It’s clear. And it’s not debatable.
Solving this by creating a culture of transparency is a win for everyone.