Jon Witty is vice president and general manager of Sage Construction and Real Estate solutions, which provides contractors, developers and property managers with a complete solution to manage an entire project life cycle with precision and efficiency. With more than 30 years of experience in technology, enterprise resource planning, project management and construction, Witty is responsible for driving Sage’s business strategy and initiatives in the construction and real estate market. Visit sage.com.
With today’s labor shortage, it is essential that construction companies streamline business processes and eliminate time-wasting tasks, so staff can focus on important work. Automating workforce management processes, such as timekeeping and payroll, is a great way to free up some misspent time and increase productivity. And it is becoming easier with the increased use of smartphones and tablets on the jobsite and remote time capture applications that can link your field information with your company’s payroll and accounting systems.
If you are still unsure whether automating these processes is right for your business, consider the following benefits.
More Accurate Records
Many field managers are still reporting time on a weekly basis. The information is often incomplete or inaccurate, as it’s often difficult to remember who did what and for how long, especially when reports are compiled several days after job completion.
Keeping track with paper timecards or a Microsoft Excel spreadsheet is also difficult and can contribute to additional errors. Furthermore, managers are often in a hurry, scrambling to review and approve timecards so that workers can get their checks on time, and are prone to mistakes. If the times entered contain errors, payroll staff is working with inaccurate information, and if you pay people incorrectly, you can face penalties.
You also have to consider that time and payroll are not always straightforward when you factor in things like certified payroll, overtime, tax rates and workers’ compensation rates. Automated time and payroll systems can take into account these different situations and multirate structures, reducing the risk for error while helping you remain compliant and even meet stringent requirements, saving money in the long run.
Better Business Visibility
Automated time capture and payroll provide contractors with an up-to-date record of labor costs, allowing for greater confidence in the data they have available. You can make better, faster business decisions when equipped with updated, accurate information.
Project managers can easily compare the labor budget versus the actual time put in while a project is underway. Having early visibility into estimated versus actual labor costs and hours allows contractors to make course corrections when work doesn’t go according to plan. Field management can speak directly with workers to find out what happened, quickly discovering and correcting paperwork if any overage requires a change order. The sooner you can start the change order process, the sooner you will be paid for it.
Greater Employee Retention
Scrambling to capture time not only causes unnecessary stress for those in the field, it also makes things more difficult for those in the back office. Accounting and payroll staff are often frustrated by the difficulty of collecting time data. When the information arrives late or is incomplete, they struggle to quickly process the payroll so that it can be distributed on time.
Making sure timecards are captured, approved and sent on the same day to the payroll department will make their lives easier and reduce time and money spent processing. Automating the payroll process further streamlines their workload and reduces room for error. Employees will be much happier and more productive when they have all the tools they need to complete their work without wasting unnecessary time, making them more likely to stick around, which is beneficial for all involved.
A Competitive Advantage
Labor costs are the biggest risk for losing money on a construction job, and for many contractors, it is often their weakest link in job management. With bid prices and margins extremely tight these days, everyone is looking for ways to better manage project costs and improve efficiency.
In the 2018 Construction Outlook survey Sage conducted with the Associated General Contractors of America, 67 percent of contractors surveyed said they plan to use mobile technology for daily field reports, while 59 percent reported planning to use it for employee time tracking and approval. Improving the timeliness and accuracy of your labor time and payroll processing can help keep your projects on time and on budget, and that translates into a competitive advantage.
Where to Begin
Any process change can seem daunting, but don’t be discouraged. You can always start small. It doesn’t have to be an all or nothing proposition right away.
Consider the following tips to help you begin transitioning:
- Get key stakeholders on board—As with any change to your business, it’s important to start by getting all key stakeholders on board. Identify employees who are fundamental to rolling out the changes and be sure to involve them in the planning process. If they see the benefits and are willing to learn, it will help solidify their long-term buy-in and make the transition much smoother.
- Invest time in planning—Investing the time to plan will save you time overall. Be sure to identify what it is you hope to accomplish and set clear goals. Communicate all changes to your team and set proper expectations. Not everyone will pick up the new processes overnight, so be sure to factor in time for training.
- Select the right tools—Once you know your goals, make a list of the technical requirements needed to achieve them and use that list to guide your software selection. Look for remote time-capture software that not only operates on mobile devices, but can automatically transfer time information into your payroll system. Payroll software can also automate tax payments, e-filings and direct deposits. Many options allow employees to view their pay and benefits information online through a self-service portal. Employees appreciate having access to this information, and it reduces the number of payroll-related questions for you or your staff to answer.
- Be realistic—Follow your transition strategy, but stay flexible. Your preparation will help to significantly reduce obstacles, but there will always be situations you can’t plan for or avoid. You might need to reassess your method as you implement changes. Identify what is and is not working and make changes accordingly. Having a clear strategy upfront and measuring your progress regularly will help to guide the process and accomplish your goals.
If you’re still capturing time using manual records, consider making the switch to automated. It requires an initial commitment of time and resources but is well worth the investment.