Construction Industry Payroll Issues

construction industry payroll

Thousands of dollars are spent every year resolving payroll problems. If the definition of insanity is doing the same thing over and over and expecting different results, it’s safe to say the way we’re managing payroll is insane.

Construction industry businesses need to make changes to how we document and track hours worked.

5 Steps Toward Construction Industry Payroll Diligence

Timecard fraud is a common occurrence in businesses that don’t have proper systems in place to monitor their workers’ hours.
Mena Entrepreneur

BuildCenter is offering a free template for “the perfect timesheet.” Here’s why:

  • Approximately $400 billion a year is lost to timecard fraud and lost productivity. 
  • Eighty percent of paper timesheets have errors.
  • Most construction timesheets lack the necessary information. This leads to thousands of dollars lost in overpayments, fines, and disputes.

Timesheet 4A Framework™ Solutions include:

  1. Accuracy – Basic timesheets have:
  • Start/end times
  • Hours worked
  • Breaks taken
  1. Tracking – Consider adding GPS to company vehicles for location tracking as a backup to timesheet start/end times. Other payroll tracking methods are punch clocks and phone apps.
    Punch clocks are old-fashioned, but you don’t have to employ hundreds of workers to make using one viable. Phone apps are another way to track start/end times and they have been the flagship for payroll tracking. Phone apps will likely become the payroll tracking standard for the construction industry as well as others.
  2. Approval – Reviewing timesheets as soon as possible is the best way to avoid disputes. “Manager approval is a key step that should be added before the timesheet reaches the payroll department,” says BuildCenter.
  3. Acceptable – When your timesheets are “acceptable” and compliant with labor laws, your credibility improves in disputes.
  4. Assignable – If you can use timesheet templates that are job-specific, even better. This makes it simpler to assign cost codes to projects you can use for customer billing. Later, this information will be important to review profit/loss on every project.

Business-Building, Customized Software Solutions

Construction Monitor software analyzes U.S. building and solar permit information. You can increase your business using our data. Contact us to learn more.

*Content is for informational purposes. Construction Monitor does not endorse nor recommend any software solutions, companies, or brands (except our own).

Taxes and Public Contractors

taxes and public contractors

“Public contractor” means a person…has entered or is attempting to enter into a contract for the provision of goods or performance of services with a governmental entity.LawInsider

Data from 2020 is automatically discounted because the year itself was lost in space, business-wise. It was a financial survival-of-the-fittest situation at best.

Public contractors are looking forward to construction spending increases in 2021 and beyond. More jobs mean more money. It may also mean more taxes.

Construction Industry Tax Breaks and Public Contractors

If you’ve been feeling picked on lately, it may not be paranoia. While Amazon often pays no federal taxes, there’s been a focus on construction industry firms with low tax rates. Four construction public contractors actually showed negative tax rates and three paid no federal taxes last year.

As an individual taxpayer, you would get a check from the government if you had a negative tax situation. It doesn’t work like that for corporations. Rather than a rebate, they often receive a tax credit for the next year.

In 2018, the corporate tax rate was 21%. Construction’s overall federal tax rate was 8%, while most public companies’ was 19.4%. Profitable Fortune 500 companies saw an 11.3% federal tax rate that year.

President Biden is proposing raising the corporate tax rate from 21% to 28%. The increase is to help fund his infrastructure rebuilding plan. Oppositional senators (and several manufacturing/construction representatives) say the one trillion infrastructure spending can be paid for without raising the corporate tax rate.

Opponents say the negative impacts could include:

  • $117 billion loss in gross domestic product the first two years
  • $80 billion decline in equipment investments the first two years
  • Approximately 600,000 jobs lost every year for 10 years
  • Wage reductions of $662/household

Ways public contractors decrease tax liabilities include:

  • Asset depreciation
  • Prior years’ losses – Companies could carry losses from 2018-2020 for five years w/ CARES (Coronavirus Aid, Relief, and Economic Security) Act
  • Research/development tax credits
  • Stock option compensation (deducted as an expense)

Look on the Bright Side

You may see a tax increase soon, but it will be a tax on your profits, which will also increase.

Construction Monitor is one of your resources for greater profits. We provide customized data to create business leads. Contact us today to find out how.

Construction Industry Material Prices

Construction Industry Material Prices

It’s not just construction industry news. Hardly a day passes without national and local news referencing the 2021 soaring materials prices. Our country’s financial well-being is driven by building permit applications, infrastructure construction, and more. The construction industry is a figurehead for economic measurables in this country.

Percentages of Construction Industry Materials Increases

Numbers don’t lie unless you’re Democrats and Republicans comparing the state of the economy. Even then, they don’t “lie.” Politicians use different numbers to support their required end results.

You can trust these numbers, shared by ABC chief economist Anirban Basu. These percentages peaked in May, so June actually showed some improvement.

Percentage of increases in construction industry materials:

  • 186.7% – Crude petroleum
  • 154% – Softwood lumber
  • 100.1% – Unprocessed energy materials
  • 90.3% – Natural gas
  • 75.6% – Steel mill products
  • 62.8% – Iron/steel
  • 31.4% – Nonferrous wire/cable
  • 18.3% – Fabricated structural metal/metal products
  • 12.6% – Asphalt, tar roofing, siding
  • 3.1% – Concrete/concrete products
  • 2.2% – Plumbing fixtures/fittings

The biggest price increases were in energy supplies, but softwood lumber skyrocketed. The National Association of Home Builders says lumber prices are adding about $35,872 to the price of residential new-home builds. However, that also adds $12,966 to multifamily rental homes, which translates into a $119/month rent increase.*

“Global supply chains should become more orderly over time as the pandemic fades into memory,” said Basu. Still, home sales are expected to rise. “This means project owners who delayed…construction for a few months in order to secure lower bids may come to regret that decision,” Basu concluded.

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As of June 23, the price (of softwood lumber) has fallen below $900 per board foot, down about 49% in less than two months. 

Using BIM, VDC to Improve Construction Bidding and Planning

BIM = Business information modeling
VDC = Virtual design and construction

Construction Bidding and Planning

Seven years ago, we in the construction industry pondered the pros and cons of BIM software. BIM was new-to-us at that point but the concept – and the term – was introduced in 1992. Today there’s no doubt there are many advantages to business information modeling and the software that drives it.

VDC followed in 2001 by the CIFE (Center for Integrated Facility Engineering at Stanford University of California). The institution strives to lead the world in academic research for architectural engineering virtual design and construction.

A Competitive Edge in Construction Bidding

“Construction has one of the most costly and time-consuming bidding processes of any industry, owing to the high complexity of projects,” said marketing pro Tyler Riddell. With BIM and VDC, bidders can include a visual, integrated model that includes product and material information.

Your bids will leave no doubt as to the level of organizational efficiency and collaborative abilities of your teams. Your accuracy in estimating costs will also improve, and that usually means greater profits.

Minimize Poor Construction Planning

BIM uses data and 3D modeling to strengthen design concepts for one or more construction project segments. We use it to portray how finished physical objects will appear.

VDC complements BIM. This application incorporates the BIM models into a start-to-finish project presentation. This application “gives each team member access to updated, real-time project information,” says the design software company ALLPLAN, “while optimizing engineering and construction.”

Trying to envision a finished project was difficult for many stakeholders, no matter how accurate the 1- or 2-D drawings and architectural presentations are. VDC can be used to reveal every phase of a construction project.

The software data factors-in:

  • Constructability
  • Costs
  • Staging
  • Turnaround times

BIM and VDC can reduce the issues associated with poor construction planning:

  • Everyone on the project team is able to “see” the end result and each person can speak to the design concepts confidently.
  • It proves the project is doable as-planned.
  • Labor costs can be reduced because you save time taking the design to a deliverable plus it helps you determine what and when labor is needed.
  • Material costs can be reduced because you’ve pre-planned and identified types and layouts. You’ll know when/what to order, staging required, and shipping times.

Ignoring the business management and development tools you have available can be more costly than you realize. Construction Monitor data can help you increase business. Get more information today.

Tips To Minimize Construction Business Hurricane Losses

construction business

If you’re not a boat captain or crew, you probably don’t pay attention to NOAA (National Oceanic and Atmospheric Administration) announcements until May. That’s when NOAA issues its hurricane season prediction for the year.

Apparently, the 2021 storm season will not be as cruel as 2020. But it will be very active. Again. The prediction is a 60% chance of an above-normal hurricane season.

Following a catastrophic hurricane, there’s a construction business surge from demands for damage repairs. There’s also inflated materials and labor costs.

Construction Business Damage Control: Be Prepared

If you have projects in U.S. coastal regions, now’s the time to review insurance policies. Some policies do not cover earthquake, flood, or hurricane damage.

Then, check with your contractors and subcontractors to confirm their insurance coverage. Next, review your open contracts to review the wording about weather-related delays.

Technology has made hurricane tracking much more accurate. When the first storm warning is issued, you’ll have a good idea of how much time you have to initiate hurricane protocols (the ones you developed before a weather-related disaster).

Here are some tasks to protect your jobsite against the threat of hurricane damage:

  • Assign a “storm leader” to coordinate crew assignments.
  • Document the project’s condition and work status by making a video/photographic record of the job site and surrounding properties.
  • Focus on reducing the storm’s impact; close structural openings, minimize flood risks from groundwater/rainfall, etc.
  • Protect materials and equipment that cannot be moved with netting, banding, anchoring screws, or other materials.

Returning to Work Safely Post-Storm 

Review OSHA’s Hurricane eMatrix guide for post-storm actions. The information will provide employee safety recommendations for returning to work.

  1. Inspect the jobsite.
  2. Determine the damage.
  3. Videotape/photograph the scene.
  4. Notify insurance and owner(s) before making repairs or initiating cleanup.
  5. Communicate who is responsible for repairs and cleanup.
  6. Check the structural integrity of buildings, formwork, scaffolding, etc. and secure/reinforce if needed. 
  7. Remove standing water.
  8. Before re-powering, check all electrical connections, junction boxes, and grounding. Pay attention to extension cords’ condition/placement.
  9. Document all storm-related damage, delays, and losses. Request subcontractors do the same.

Construction Business is Our Business

The marketing professionals at Construction Monitor want to share construction business-related information. But our business is encouraging you to develop your business. No company is too small to have a marketing plan.

Ask us about ways to develop business leads using building permit information. And stay safe this hurricane season.

Using up-to-Date Construction Cost Data

construction cost data

As we get older, it’s difficult to transition from some of the basic business principles and construction cost data we followed from other decades. They worked, time and again. Many of them aren’t working now. 

If you’re estimating costs using the same formula your company used in 2019, it’s just like assuming you can get a pumpkin-flavored coffee from a snow cone vendor in January for twenty-five cents. You’re using the wrong seasonal considerations and outdated pricing.

3 Reasons to Update Construction Cost Data

We wanted information fast and we got it. Now, we need to keep up with it or we’ll make costly mistakes. In a tight market, that’s exactly what we can’t afford.

Here are 3 reasons to upgrade your construction cost data:

1. If your construction cost data is out-of-date, your estimates will be off. Incremental changes are expected but they should be included in construction cost data sooner rather than later. When we ignore them, incremental changes can add up. The damage can be significant.

2. Inaccurate estimates based on out-of-date construction cost data leads to cost overruns. “Cost overruns can shut down a project altogether,” says construction technology company Gordian*. “From 2020-2021, 57% of construction material costs increased.” Multiply a material cost increase by the number of times you will order that material and you can see projects will realize lower profits.

3. Underestimating costs reduces your credibility. And that can negatively impact customer and contractor relationships. Accurate construction cost data is essential to your brand, from planning through delivery.

Construction Business Data Analytics

Consider the numerous political, global, and technological changes within the past 12 months. That’s why any long-term business plan is no longer realistic.

Robert Snow Means was a civil engineer who kept detailed tracking records for construction equipment, materials, and labor costs. He became a go-to for construction cost data in the 1940s. Gordian offers aptly named RSMeans construction cost data analytics as well as other technological services to the construction industry.

Construction Monitor data analytics are renewed every week. We provide you with customized, geographically relevant data that can influence business decisions and drive marketing strategies for your company.

Contact us today to develop the dataset that will best serve you.

*Construction Monitor does not endorse nor recommend any software solutions, companies, or brands (except our own).

Condo Collapse Could Have Been Avoided

condo collapse

Three more bodies were found July 5 after the demolition of the Champlain Towers South multifamily structure in Surfside, FL. As of that day, there were still 118 bodies missing in the rubble of the condo collapse.

Documents released by the town of Surfside revealed a 2018 engineering report warned of major structural damage at the condo. The condominium was built in 1981 atop what had once been marshlands and had been sinking 2 millimeters/year since 1990.

The condo association was planning to address the building’s issues. One construction company CEO told a Construction Dive reporter that “deferred maintenance” among condo associations is a common problem.

Law and Local Government Officials’ Lack of Enforcement Contributed to Condo Collapse

The demolition was initiated at 10:30 p.m. Sunday, July 4 using what engineers called “energetic felling.” The process used small but strategically placed explosives that allowed gravity to bring the building down safely.

Here are the pivotal points cited by The New York Times:

  • Champlain Towers South faced tumultuous years before the collapse.
  • Lax enforcement let South Florida towers skirt inspections for years.
  • One housing unit, Crestview Towers’ inspection was 9 years overdue. It was evacuated and the next day, another Miami-area condominium unit’s residents were told to leave and take valuables with them.
  • The company hired to take down the damaged Surfside building is known for the Seattle Kingdome implosion.
  • The remaining structure at the Surfside condo has been demolished.

Miami Beach had over 500 buildings due for 40-year recertification, and after the June 24 condo collapse, the city completed every inspection within a week. However, “Miami Beach isn’t going to assume…its building inspections and recertification processes are being done in the right way,” said Miami Mayor Dan Gelber.

Safety Can Never Be Compromised

When 6 condo collapse firefighter/rescue workers tested positive for coronavirus, it was not known if the workers had been vaccinated. Vaccination against COVID-19 is another safety precaution we shouldn’t ignore.

The investigation into the condo collapse will likely take years. There’s little doubt that several fails contributed to the disaster. But the families and residents of the Surfside Beach community may never recover from the heartbreak of that day.

For more information about construction business leads in your area, contact Construction Monitor today.

Materials Tracking for Construction Firms

construction materials

Construction firms using software for materials tracking have a competitive edge. And during the pandemic, one company managed supply chain challenges in such a way it increased productivity.

New York City’s HAP Construction shares steps to protect against contract loopholes for a more successful project lifecycle.

9 Steps Construction Firms Can Use

The construction company said these logistics were implemented during the pandemic, but they are strategies that will prove effective every year.

1. Before the project start date, make a list of all materials to be purchased:

  • Doors
  • Finishes
  • Fixtures
  • Flooring
  • Kitchen supplies/appliances
  • Lighting

Sort the list to give an exact location of where items will be used.

2. Order all needed materials as soon as possible. Purchasing items earlier allows you to avoid future price increases due to supply shortages.

3. Materials are shipped offsite for storage. Designate a logistics manager to:

  • Oversee all vendor purchase orders
  • Receive/log materials deliveries

This enables more oversight and materials control. It also allows project managers to reduce subcontractor surcharges.

4. Using architectural drawings, create a building map that designates where specific materials will be needed and when.

5. Following every materials delivery, the logistics manager should inventory items to ensure the correct quantities were delivered and materials are undamaged. The logistics manager then updates the master list, showing the materials are stored and ready for jobsite delivery.

6. All items in storage should be sorted according to building site locations. Perform a second check to ensure everything is accounted for and undamaged.

7. Label all boxes/materials with an individual QR (quick response) code. When pieces are ready for delivery to the construction site, the workers onsite can easily see where every piece of material or equipment needs to be.

8. When possible, all materials for each task should be delivered together. This reduces the number of deliveries and the number of trucks in traffic which lowers gas emissions.

9. Schedule jobsite deliveries after regular hours if possible. This frees hoists for workers that need them during the day. After-hours delivery also lets delivery crews get in and out quicker.

The time savings are measurable But it’s also morale-building when project workers and subcontractors can find the materials they need quickly and in the right spot. 

Logistics for better business organization are what construction firms value. Construction Monitor takes building permit information and customizes it, making it easier, faster to use. Contact us to learn how our data can transform your marketing strategy.