New to construction resource management? Here’s what it involves and how it helps construction firms thrive in uncertain economic conditions.
The construction industry is facing significant headwinds. Regrouping after lockdowns in 2020, the sector is now battling historic labor shortages and a global recession. Work is less certain, margins are squeezed, and staff are hard to find.
Against this backdrop, cost efficiency and effective resource planning are essential for any construction firm that wants to survive and thrive. But how? Enter resource management for construction.
Resource management in construction means taking a strategic approach to managing your workforce. To improve productivity and utilization, control costs, and reduce wastage today. And to enable timely, data-driven decision-making to secure a profitable tomorrow - from who to recruit to what projects to take on.
Many construction firms struggle with resource management due to using unfit-for-purpose resource management processes and tools. This article will explain the benefits of resource management in construction. And introduce you to construction resource management software to accelerate, automate, and simplify the process.
Construction resource management is the process of planning, allocating, and managing your workforce to deliver construction projects on time and within budget.
While construction projects use various resources - including raw materials and equipment - this article is specifically concerned with managing HUMAN project resources, their time specifically.
The purpose of construction resource management is to help PMs meet their project objectives in the most efficient and cost-effective way possible.
It achieves this by ensuring the right people are working on the right projects at the right time (resource allocation) and that they're being used to the best effect (resource utilization).
You don't have too many workers, twiddling their thumbs waiting to be useful; nor do you have projects at risk due to a lack of appropriately skilled staff.
Given that
this can be the difference between project success and profitability... or project failure and financial losses.
Resource management also supports senior managers to plan effectively for business growth and sustainability - by showing what resources, capacity, and capabilities are needed for their future plans.
New to the idea of resource management? We’ve got your back. Check out our guide to resource management to get up to speed, fast.
At an operational level, construction resource management typically involves:
At a strategic level, it can also encompass:
If you don't already have one, you should consider writing a construction resource management plan. Find out how to create a resource management plan here.
There are lots of challenges in construction that make resource planning and management particularly difficult. Here are just some of the barriers to effective construction resource management.
The construction process is particularly vulnerable to project changes. This can be down to anything from client changes to delays caused by the weather. Due to interdependencies between tasks, delays require firms to be agile and reallocate construction resources effectively - or face downtime and delays to project timelines.
Delays in the delivery of materials or equipment can have knock-on effects for project schedules. The availability of materials affects when different people and trades are required on site. A construction project just needs one material to be delayed to derail its entire resourcing plan. This reinforces the importance of construction project managers having the agility to reallocate resources fast.
Material costs are 27% higher than pre-pandemic levels and these rising costs can impact project margins. This is particularly relevant for firms working on fixed-price contracts signed over a year ago before the cost inflation became apparent. Resourcing may need to absorb this impact in order to protect narrowing margins - making utilization and monitoring more important than ever.
The construction industry is known for its labor shortage. In the US, for example, the sector will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor, according to Associated Builders and Contractors. In the UK, Brexit and the loss of EU workers are also exacerbating shortages.
According to the Construction Projects Association, skills will be a key constraint in the sector, saying ‘Whilst near-term the focus in UK construction is on materials and products available, the key constraint on construction output growth in the medium-term is likely to be skills availability and cost.’ Securing talent in a timely way is key to growth and sustainability.
Workers are distributed across multiple projects and construction sites in the field. This makes it especially challenging to get visibility into availability, capacity, and utilization. This problem is exacerbated if organizations have siloed resource information - such as individual spreadsheets - rather than a centralized resource management tool.
Hiring trends in construction are moving from permanent staff to agency workers, as firms struggle to secure talent. According to KPMG, temporary billings have hit a six-month high and permanent appointments are marginally down. Although this can increase agility, it reduces predictability and increases resource management complexity.
We’ve seen an increase in temporary or freelance staff recently,’ says one construction project manager we spoke to. ‘A lot of companies have been using agency labour as a cheaper alternative to a permanent labour force. With an increasingly aged workforce and fewer apprentices coming into the industry, this is having an impact on the decisions companies are making when resourcing and tendering for projects. I believe with more and more market uncertainty and the reduction in skilled labour, we will see an increase in the use of subcontractors on projects.
Against this backdrop of higher costs, more complexity, and fewer workers, effective resource management is more important than ever. And trying to manage your resources with spreadsheets or other generic tools isn't going to cut it.
Here are eight benefits of construction resource management (and of using the right tools for the job).
Resource scheduling software provides a central place to see all of your construction resources - their skills, capacity, availability, and cost to the business. This is so valuable when you have resources in the field on various construction sites. Or when relying on a more flexible, freelance workforce. You can easily see everyone available to you and choose the best-fit people for the projects at hand. And you can filter them based on job role, skill set, availability, and other tags.
Resource utilization is a key construction resource management KPI. It means how much of your resources' time you're using. You want to aim for high resource utilization because that means your project resources are being used productively - not waiting around for work to start. This helps control your staff costs, reduces wastage, and deliver better ROI.
As the old saying goes, you can't manage what you don't measure. An effective resource management process - supported by resource management software - lets you monitor and improve resource utilization.
When multiple projects want access to the same resources it's a risk to delivery. You either need to delay a project while you wait for resources to become available. Or you have to hire in contractors, often at a higher cost.
The resource management process lets to identify potential clashes in advance and mitigate project risks ahead. For example, through the timely recruitment of new staff (which typically means lower costs and fewer delays) or rescheduling projects until resources are available.
With construction resource management software, it's easy to see clashes at a glance.
We know construction companies thrive on pinpoint accuracy - measurements, quantities, materials. But sometimes project forecasting can miss the mark.
Take budget and schedule variance as an example. Nearly three-quarters of construction projects run over schedule or budget. We know that's not always the fault of the construction company. But resource management software can help when a curve ball comes your way.
With the appropriate tools in place, you can check how your project is performing against your proposed timeline and budget forecast. If it is running over, you can take steps to course correct.
Plus, over time, the data you collect in your resource management system will help you create more accurate, data-informed forecasts in future - so you can build more accurate project timelines and budgets.
In light of labor and skills shortages, construction firms need robust capacity planning processes. Capacity planning is concerned with forecasting how much capacity you have for future work - and ensuring you have the appropriate construction resources available to deliver it.
Insights from your resource management process are invaluable in capacity planning. They show what resources are most in demand and which are under-used. So you can make data-informed decisions about recruitment, training, and reskilling your workforce.
In the context of an increasingly flexible workforce, it helps you pinpoint the capabilities you need agencies to source on your behalf, and when.
Changes to your projects and pipeline are inevitable. Prepare for new projects, potential delays and changes before they happen. See the impact of various what-if situations with scenario planning.
Scenario planning is when you model different combinations of potential projects to understand what's optimal for your business. With the appropriate software, scenario planning is easier than ever. You can simply add projects to your platform and automatically see the impact it has on metrics like profit, workload, and capacity.
Equipped with information about the most profitable future path for your business, you can begin securing the workforce you need.
In an industry that is so vulnerable to project delays, agile resource allocation - and reallocation - is essential.
With visibility into resource utilization across the organization, you can dynamically allocate your resources where they're most in need. And move them elsewhere if projects are delayed.
For example, if one project has bricklayers idle due to bricks not being delivered, you can send them to another project that needs them.
If you're using spreadsheets or other manual methods to allocate resources, this is a complex and tedious process. It's hard to see and assess the impact of the changes you're making. With resource management software, all interdependencies automatically update, so you can see the best course of action for multiple projects.
Advanced reporting functionality helps project managers and senior leaders make better decisions. Instead of poring over spreadsheets and manually compiling reports, you can see bespoke dashboards that give you at-a-glance insights. Plus access easy-to-run reports for when you want to drill into the detail.
What does effective resource management look like? Get the Runn-down on what makes good resource management, great!
Construction resource management software accelerates, automates, and simplifies the resource management process. Exact functionality differs according to which resource management tool you're looking at. But - to give you an idea - here's what Runn offers.
Quickly create project schedules with intuitive drag-and-drop functionality to add phases, milestones, and schedule resources. Plot projects ahead of time to see how your plans will impact the business in the short and long term. See all your projects in one place, know whether you have the right amount of work in the pipeline, and if you have enough resources to deliver it.
Find the exact people you’re looking for, for every project, with a centralized resource pool and powerful search. Filter people by role, skill, team, tag, and more. Manage workload capacity with a heatmap of everyone’s availability. Instantly spot over- or under-utilization across your entire team, no matter the size.
Forecast where your business is heading to plan ahead with confidence. Know the future capacity for your entire company, teams, and individual people. Get real-time visibility of how future work impacts availability and monitor live insights for the near future. Drill deep into the numbers with Runn's in-depth people reports.
Get an accurate picture of your team's workload with a high-level overview of your entire resource pool in the long and short term. See at a glance how each project in the pipeline impacts your team and identify utilisation trends in your plans. Use insights to inform your recruitment decisions so you hire exactly who you need for the job, and know when to start hiring additional staff or contractors.
Stay on top of your projects and entire portfolio. See whether your projects are likely to land over or under budget so you can adjust plans before it's too late. Get forecasts of how much revenue, profit and costs your projects incur in the comprehensive project reports. See how much you've billed so far and what future profits look like.
Wondering what to look for in resource management? Check out our buyer's guide to resource management software.
Discover why so many businesses already trust Runn to improve how they manage their valuable resources. Say goodbye to spreadsheets and second guesses, and hello to confident planning and effective resource allocation.
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