Use Overtime Effectively
The successful contractor knows how to incorporate anticipated overtime wages into bidding and estimating. If you know a project will require 10-hour and 12-hour shifts from milling and paving crews, you will naturally work the regular and overtime hourly pay into the estimate. Where overtime might catch you off guard is when it’s unexpected.
Consider the paving crew who notices segregation taking place on the newly laid mat. If they’re focused on quality control/quality assurance (QC/QA), they’ll pause and trace the problem backwards until they discover the root cause and solve it. If that problem takes time to find or involves shutting down the plant for a block of time while someone knocks trapped material out of a chute, the opportunity for unexpected overtime cannot be helped. Weigh paying one crew’s overtime for one or two hours against a deduct on a section of pavement or, worse, having to come back, mill up, and repave a section of pavement a month from project completion.
Consider the paving crew that doesn’t track yield during a parking lot project and ends up requiring an extra truck—or two—as the job is winding down and dusk is closing in. Not only will the project supervisor find himself calling the plant to fire up for more mix, but he will also be looking for some light towers and someone to deliver them to the site. This means unplanned overtime and unplanned expenses.
There’s good news for the quality-minded crew and contractor.
A new study by Dodge Construction Network, Hamilton, New Jersey, and construction tech company Versatile®, Los Altos, California, found that unexpected overtime can be predictable and controllable through regular job site activity measurement. According to the study, overtime is predictable at an 88% confidence level if you use proper measurement.
Dodge Construction reported overtime is a persistent feature of construction sites; however, it is often unplanned and unpredictable. Despite the cost of overtime, its impact on skilled workers, and its implications for safety and other key factors on a project site, it is often applied to address immediate concerns rather than planned to maximize its effects. The study shows that to best understand overtime and its impact, data and measurement of job site activities is key.
“Unique insights derived from advanced data and analytics tools will empower construction crews to build better,” said Meirav Oren, the co-founder and CEO of Versatile. “Overtime can be a very effective tool on the job site. Through the power of data, general contractors gain the ability to minimize unnecessary overtime while maximizing its strategic benefits.”
To conduct the study, job site productivity and performance data was collected through Versatile’s CraneView®. This is a non-intrusive device mounted below the crane hook powered by artificial intelligence (AI) and the internet of things (IoT). Versatile analyzed data from a sample of project sites that deployed overtime to provide valuable insight into how measuring overtime can help improve productivity.
Key findings from the study include:
- 96% of days with overtime experienced a higher volume of non-productive activities during the morning hours compared to the volume of total activities during overtime;
- Crane use was 6-7% better during overtime than for the same activities performed during standard shift; and
- Overtime is strongly correlated to unscheduled breaks, with 63% of unscheduled breaks happening during the morning hours, or first part of the shift.
“The goal of this report is to encourage conscious, intentional measurement of site activities and objective analysis to determine true best practices,” said Steve Jones, senior director of industry insights research at Dodge Data & Analytics. “This approach can help every kind of contractor with useful, actionable perspectives based on facts, rather than commonly held myths.”
Check out the full findings of the study, “Measuring What Matters: Overtime Efficiency,” as a free download at www.construction.com.