The steps to building accurate labor forecasting in construction

The construction industry is a labor-intensive market that relies heavily on the skills of construction workers. But with ongoing labor shortages in the industry, it is getting more difficult for companies to bid and take on jobs. Accurate labor forecasting is critical to predict labor needs, meet deadlines, reduce costs, increase productivity, and minimize scheduling errors. 

Labor forecasting involves mapping a lot of information to predict how many people a project needs. Gathering information from historical data, quantitative analysis, and assessments is time-consuming. But with this data, business analysts and CFOs can predict labor needs accurately to balance demand and supply requirements. Detailed forecasting prevents understaffing and overstaffing and allows construction managers to find an equilibrium between labor demand and supply.  

Accurate forecasting ensures you have the right personnel with the right skill set at the right time. Construction is a high-pressure industry where poor scheduling and staffing errors can lead to missed shipments, overtime costs, project delays, and deadlines.  

Benefits of workforce forecasting

When day-to-day labor scheduling and planning run smoothly in construction, the business can focus on other important matters such as growth, project optimization, and employee training. Proper and accurate forecasting enables managers to account for resource fluctuations, labor shortages, and changes in project time frames.

Staffing each project correctly enhances overall productivity. In construction, staffing shortages lead to burnout and low morale. But building teams suited to a project’s needs means employees can excel in their position, and the team can meet the project timelines.

Through prediction, you increase visibility into projected costs, spending levels, and expected labor outlays. There will be more clarity on staffing needs and plans in place for any potential blockers. Thanks to better planning, the company will be less likely to overspend on unnecessary overtime hours. 

Labor forecasting techniques

Historical analysis

With historical hindsight, you can examine trends and fluctuations that occurred in past projects and use this information to make better predictions on future labor demands and needs. Most construction managers conduct historical analysis to plan and make accurate labor forecasts. You can see when worker demand spikes throughout the year, how past teams performed, and map trends over time to identify how unforeseen events impacted work.

Research

Operations and finance can brainstorm regarding future labor needs. Managers can analyze current market needs and use their experiences in the industry to make accurate predictions. Managers are feet on the ground and can highlight slow and busy seasons, staffing needs concerning the broad labor market, and regulatory challenges that could affect staffing decisions.

Quantitative approach

Advanced labor forecasting techniques involve advanced software that uses qualitative and quantitative information to form trend lines based on various factors affecting the labor market. Statistical predictions performed in this software are the best tool when making human resource and financial decisions. Forecasting this way is essential for large organizations that need sophisticated insights into the construction labor market.

Data-driven labor forecasting

Construction gathers huge amounts of data from every job. Building out accurate labor forecasts using this data can be a massive, time-consuming job. Technology can be used in many ways to help make this mammoth task more manageable.

Forward-looking project managers should consider real-time project-tracking apps and RFID-enabled controls that automate personnel tracking. This helps to ensure that accurate labor data is collected and saved in the company’s database. 

With data collection tools, project managers can assess the number of onsite workers and know the specific areas where they work. Traditionally, construction managers would physically visit various sites and jot down the number of workers and where they work. Technology streamlines this process and captures the data electronically.

Accurate labor forecasting starts with accurate data capture, and from there you can use technology to make better predictions. Construction managers who embrace technology and use tools to monitor construction projects in real-time will be better set up for future projects. 

With better data collection, you can use a technology that can compile massive amounts of data and run complex equations to provide multiple scenarios for a finance team to analyze is more productive. Briq allows you to do this by taking all the data collected across your departments from systems and people and turning it into actionable insights and information. Your teams can build better, accurate forecasts from Briq’s outputs and start bidding on jobs with a clear understanding of your labor needs.

Briq is software built for construction financial professionals. We understand the specific pain points of the industry. Our software automates many construction processes and workflows to ensure your departments can focus on high-value work. To learn more about Briq, schedule a call with our team here.