Controlling Costs

Yardi Construction Management

By Erica Rascón on Jan 25, 2017 in News

The National Association of Home Builders reports 200,000 unfilled construction jobs in the United States. That is an 81 percent increase in unfilled positions since 2014. The lack of skilled labor has contractors turning to creative solutions.

A Growing Problem

The shortage of construction workers hit hardest in July 2016. Sales for new construction reached the highest peak in nearly a decade. Builders scrambled to find crews to help meet demand.

Construction delays led to appraisal delays, which led to closing delays and a series of increased costs, lost time, and damaged customer satisfaction scores.

“There was frustration all around,” says Manuel Cabrera, Branch Manager with CalAtlantic mortgage. “The shortage of workers affects every facet of our business.”

Single-family isn’t the only sector feeling the pressure. In multifamily, a lack of skilled construction workers creates a similar strain.

Two factors surface as the main culprits of the labor shortage. The median age of construction work crews is 40. Contractors have had a difficult time replacing aging workers and attracting young talent. Changes in immigration policy also effect labor sources.

“The shortage of workers comes up at every meeting. The demand is great for business, of course, but when you’re short on skilled labor to fulfill that demand, then what?” asks Cabrera.

The dilemma will intensify. Contractors  project higher labor costs in 2017. Sun Sentinel reports that 73 percent of construction firms in the US plan to expand their payrolls this year, increasing pay and extending training for employees.

Creative Solutions

To mitigate costs hikes, contractors are exploring labor-efficient equipment and technologies. Building information modeling (BIM) and other construction software improve the precision of project planning and management.

Yardi Voyager Construction Management facilitates worksite management in a mobile-ready platform. Construction Management provides transparency and accuracy by comparing actual costs to job budget; offering confident forecasting and management of contracts; and detailed scheduling and fulfillment data.

Contractors can keep overhead costs low by controlling expenses and minimizing errors for optimal worksite job flows.

Prefabricated products also reduce labor costs. The materials and installation costs for FireRock prefab fireplaces are 50 percent less than traditional brick and mortar units.

ClosetMaid xpressShelf requires only one person to install and can be completed faster than conventional MDF shelving. The units are pre-finished and do not require caulking or painting.

Larger items, such as prefab trusses, offer the largest cost savings. Contractors can decrease the skilled labor required for conventional rafters and ceiling joists. Prefab trusses enable contractors to finish construction faster and with greater accuracy.

Construction product and service providers continue to develop solutions for builders with skeleton crews. While current offerings do not adequately replace skilled labor, they allow builders to accomplish more with less.