HR Software Helps Track Contractor’s Growing Workforce

by: Smith and Howard

January 27, 2015

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Labor costs can make or break a project. Recently, the owner of a midsize commercial construction company learned that the right human resources (HR) management software can go a long way toward tracking and reducing these mission-critical expenses.

Tackling multiple jobs

During a regularly scheduled sit-down with his financial advisor, the contractor in question mentioned that his business was experiencing some unexpected financial challenges. The company had recently won bids on a series of municipal projects, which were now underway. These large-scale projects were substantially different in scope and specialization than the jobs the company typically handled and, as a result, there was a learning curve.

The contractor further explained that this new work, while strategically important to the company’s long-term goals, required many more workers than usual. Compounding matters, the business now had to manage a combination of skilled, nonskilled, part-time, full-time and contract employees. It was difficult for the company to understand exactly how much its labor cost was from day to day.

In addition, the contractor mentioned that his managers tracked the company’s workforce using spreadsheets that provided few details about its workforce utilization. Even more, this format only allowed the company to track hourly wages, not all the additional costs, such as taxes and benefits, in one document. Cash flow issues, the contractor said, might not be far off, and the financial advisor agreed.

Selecting a system

The financial advisor had a couple of ideas about resolving these critical issues. First, she suggested a close examination of the company’s revenue cycle to ensure its cash flow was under control. Second, and most important, she recommended carefully choosing and implementing an HR management system that would allow the contractor to truly understand every facet of his company’s labor costs at any given time.

The advisor recommended bringing in a technology consultant, who then worked with the company to create a list of needed functions, target budget-appropriate systems and schedule demonstrations with vendor sales reps. Ultimately, they considered three systems that all tracked data related to attendance, hours, wages, certifications, benefits, training, drug testing, safety reports and skills. But the products varied on their noncore offerings and price tags.

Seeing the results

After much thought and debate, the contractor bought and implemented one of the three finalist systems. Although there was a learning curve, the software eventually helped optimize the company’s revenue cycle through enhanced monitoring of labor costs. Within six months, the company was on pace to beat its profitability projections for the year and was even considering adding more staff.

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