Ideas To Boost Productivity

May 27, 2004
/ Print / Reprints /
/ Text Size+
Tony Italiano
NASHUA, N.H. - Tony Italiano said there are many reasons why contractors miss their labor estimates when costing a job. As a result, this can cause contractors to lose money.

According to research recently completed by the Building Services Institute (BSI), contractors miss labor estimates because of equipment failure and human error; poor estimates; poor project mobilization and staging; poor coordination of resources; failure to communicate to the installation team the job's scope and tasking schedule; and poor field labor management practices.

"For one thing, you need to set everything up on the job for the installers," said Italiano. "You don't want your techs coming into the office. Productive time is lost."

Italiano added that labor cost overruns should be figured into the contract and any savings on these overruns should be shared with field personnel or given back to the customer. He said that this procedure adds to motivating employees to move the jobs along faster.

"We remove obstacles to the employee's success by implementing proper business delivery processes," said Italiano. "I even handed out cash as awards for such things as ‘best dressed employee.' These were great motivators."

He highlighted a field incentive plan, noting that it typically involves a 60/40 split, with 60 percent going to the team.

According to Italiano, average positive labor variance gains can run from 2 percent to 15 percent of the labor, which provides huge motivation to be more productive to achieve profits.

Italiano suggested that payouts from this plan be on a weekly, and not quarterly, basis. "The sooner you pay out money, the better," he said. "Cash is king."

He also added that non-field labor should have an incentive plan, too.

"These people are a true cost," Italiano said. "We have to pay them a little differently. Incentives should be based on a rating system."

Having a good rating system goes back to having an organization with job descriptions, according to Italiano.

"If you have a job description, you can formulate a rating system for merit increases," he said.

Publication date: 05/31/2004

Did you enjoy this article? Click here to subscribe to The NEWS Magazine

Recent Articles by John Hall

You must login or register in order to post a comment.



Image Galleries

Mini Split Installation

Twin Cities contractor Aabott Ferraro helped retrofit an older St. Paul home.


NEWSMakers: Doug Dougherty

Doug Dougherty, president and CEO of the Geothermal Exchange Organization (GEO) joins the program to discuss the latest happenings with GEO, including the drive to get included in state and federal definitions of renewable energy, plus the future of geothermal.  Posted on July 25.

More Podcasts


NEWS 07-28-14 cover

2014 July 28

Check out the weekly edition of The NEWS today!

Table Of Contents Subscribe


Some in the industry are calling for the EPA to halt production of R-22 as of 2015. What do you think?
View Results Poll Archive


2014 National Plumbing & HVAC Estimator

Every plumbing and HVAC estimator can use the cost estimates in this practical manual!

More Products

Clear Seas Research


Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications, Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.


Magazine image
Register today for complete access to Get full access to the latest features, Extra Edition, and more.


facebook icontwitter iconyoutube iconLinkedIn i con