Association of the Wall and Ceiling Industry Logo

Construction Labor Productivity: The $20 Billion Opportunity

FMI Corporation has released the 2023 Labor Productivity Study. The study explores current trends, challenges, management best practices and innovations for optimizing labor productivity.

Here are some of the study’s key findings:

  • $30 billion to $40 billion is lost annually due to poor productivity.
  • 79% of contractors could improve labor productivity by 6% or more with better management.
  • According to 60% of respondents, 11% or more of field labor costs are wasted.
  • Three of the top four internal factors influencing productivity are related to planning, communication and collaboration.
  • Regarding external challenges, participants cited low-quality design and construction documents, outdated and unrealistic schedules, lack of coordination with general contractors, and change order inefficiencies as their biggest areas of concern.

Many of the top internal challenges are within contractors’ control, and while the external challenges can feel daunting, better communication with partners can also help.
“Labor productivity is the economic engine of labor-intensive, self-performing contractors,” said Tyler Paré, head of FMI Consulting’s performance and operations practice. “Labor is also the largest, riskiest, yet most controllable variable cost. Managed well, labor productivity can significantly improve bottom-line margins. Managed poorly, labor overruns or exceeding labor budgets can wipe out contractor profitability.”

Browse Similar Articles

You May Also Like

The U.S. Department of Labor announced a final rule clarifying the rights of employees to authorize a representative to accompany an Occupational Safety and Health Administration compliance officer during an inspection of
AWCI's Construction Dimensions cover

Renew or Subscribe Today!