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.
Revenue growth comes from new business, and in the contractor services industry the best source of new business is referrals and repeat customers. Keeping in touch with customers and providing prompt responses to inquiries can be a challenge, especially as business grows and there is less time for one to one customer contact.
Good systems will leverage existing resources and actually improve customer contact, thereby enhancing the customer’s experience dealing with your business. Chronicle users in the disaster restoration business have found that having an integrated system that includes customer relationship management capabilities allows for more proactive and responsive handling of customers and insurance adjusters. Karen Dehart of Lemon Grove, CA tells of how their customers have been pleased with the level of follow up and timeliness with which issues are dispatched since Chronicle was installed. “In the past, we worked very hard to please the customer and the adjuster both. In this business rapid response is a necessity if we hope to retain the adjusters and earn customer referrals. With Chronicle we are able to provide a level of service that is unmatched by our competitors, hands down. Our referral rate has steadily increased in the past several months, and we have found increases in job volume from our adjusters”.
Chronicle delivers information to the desktops of your staff that is always current, making it possible to provide accurate and timely responses to your customers. The communication log serves as a complete history of all correspondence, including e-mails, letters and even notations of phone conversations. A key component of theChronicle functionality is the document management system, which creates an on line library of every document related to a job, even those that need to be scanned. Finally, every job maintains a list of assigned vendors so that contact with the field is not slowed. We all expect to receive the highest level of service imaginable, although few companies can truly deliver. With Chronicle, it is possible.