Engage the Construction Team to Increase Profits
As Published in CE This Week on April 1

Marty McCarthy, CPA, CCIFP
Focused on You. Dedicated to Your Success.
May 6, 2019

I want to share the article that I wrote entitled " Engage the Construction Team to Increase Profits" which was published in CE This Week on April 1, 2019. 

While researching material for the article, I was alarmed to discover how much money contractors were losing as in non-productive labor activities. PlanGrid and FMI conducted a study in April 2018 of more than 600 owners of construction companies globally. In their report of the findings, “ Construction Disconnected ,” it’s estimated that construction teams in the United States will lose $177 billion in non-productive labor activities. Respondents indicated that they spend only 11.2 hours on optimal activities such as project execution and coordination. As few as 8.2 hours are spent on communicating with project stakeholders, and seven hours are spent organizing the jobsite and people.
The survey respondents claimed that poor project data and miscommunication on projects were responsible for 48% of all rework in construction, accounting for a total of $31.3 billion in rework in 2018 in the United States alone. The remaining 52% of rework was caused by other factors including design changes or issues, faulty or delayed materials, unforeseen conditions and more. Poor communication represents an annual cost of $17 billion to the U.S. construction industry and poor project data represents $14.3 billion.
Managers who focus on their employees’ strengths can practically eliminate active disengagement and double the average of U.S. workers who are engaged nationwide. Employee engagement is likely to improve in companies that do the following: 
  • Hire people who are in alignment with the company’s vision and purpose; 
  • Engage employees by acknowledging the importance of their contributions to achieving the company’s goals; 
  • Develop employee strengths. Focus on their innate talents instead of forcing employees to conform and do work that does not allow them to use their talents; and
  • Enhance employee well-being. 

Managers should consider coaching their teams instead of taking a “command and control” attitude. Employees want to know that management appreciates and values them. Employees also want to know that management genuinely cares about them as a person.

IT investments were intended to provide better access to data (58% of respondents) and improve productivity (57% of respondents). The study found that weak end-user adoption of technology is an issue. Although 75% of the construction companies surveyed give project managers and field superintendents mobile devices, only 18% of firms reported consistently using mobile apps to access project data and collaborate. Instead, devices are used for sending emails, texts or phone calls. 

Gallup’s report on the findings of their annual study, “The State of the American Workforce 2018,” found that only 30% of workers are engaged and inspired on the job, 20% are actively disengaged, and 50% are not engaged at all and are uninspired by their managers. 

Furthermore, Gallup claims that companies that invest in their employees’ greatest talents to optimize their performance are generally more profitable than those that do not. Gallup also found organizations that create a culture of well-being in their workplaces help employees become more engaged and thrive. Investing in employee selection, strengths and well-being, as well as engagement initiatives, can produce amazing results.

Click here to read the full article. 

Feel free to contact any member of our team with questions at 610-828-1900 (PA) or 732-341-3893 (NJ). You can contact me at Marty.McCarthy@MCC-CPAs.com . We are always here to answer your questions. 

CE This Week is published by Construction Executive , the leading magazine for the construction industry. 

Martin C. McCarthy, CPA, CCIFP
Managing Partner 
McCarthy & Company, PC 

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