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Direct labor
represents the single biggest cost within a typical
contractor services business. For example, labor comprises
over 90% of all costs in the average disaster restoration
operation. Ironically, small contractor services business
owners rank labor as the most difficult cost to control.
Estimates never seem to reconcile with the budget and
the budget invariably never matches actual.
"Chronicle makes
the labor monster conquerable" states Bob Roberts
of Rancho Cucamonga, CA. Bob has driven labor costs
down from a high of 28% of revenue to a low today of
15%. Bob's experience with using Chronicle
to control labor costs is not unusual. Bill Barbee of
Catersville, GA attributes a decline from 30% to 22% to the implementation of
Chronicle, as well, and he is just getting started.
The common thread here is Chronicle.
Both businesses were operating at very low levels of
labor productivity. The owners believed the incentive
system they had in place was unworkable, as there was
no easy way to monitor actual performance, and to match
actual labor dollars with the budget on one job or from
job to job. As Bob Roberts explains, "Chronicle
made it possible to manage a bonus program that was
based on achieving the budget every time. We use Chronicle
to set the budget and only pay monthly bonuses based
on that number". Chronicle tracks
actual labor hours by staff member for each job and
each activity. The system also maintains a cumulative
tally of each field associate's net performance across
all jobs worked. The system tracks both productive and
unproductive jobs, never letting bonuses outstrip allocated
labor percentages.
Phil Fitzpatrick of Escondido,
CA comments, "sure we could track budgets and estimates
in Excel® or one of the many estimating tools available.
We could also use a time tracking software exclusively
designed to track actual labor hours. What we have in
Chronicle is a system that has the unique
capability to track both actual and budgeted labor costs
and provide a cumulative picture of each associate's
performance against the budget". The cumulative
tracking of each staff member's performance makes it
possible to monitor inconsistencies in performance from
one job to the next.
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