Track labor hours and manage your business with automated payroll systems and labor management software
Electricians earn the highest wage of all the construction trades, yet many electrical contracting firms don't have a reliable method of tracking their labor hours. As a result, electricians may write down more hours than they actually work, which can undercut a firm's profitability.
To regain control of their businesses, electrical contracting firms are turning to labor management software. By recording the labor hours electronically, these companies no longer have to worry about paper time cards getting lost, torn, or trampled on a construction site. Software developers and manufacturers have developed new technology to increase a firm's productivity and profitability. Electricians can now swipe their identification badges through a time clock system, place their finger on a scanner, or type a password on a keypad. (See the Table on page C12 to learn about the different types of labor tracking systems.)
While many different types of automated payroll systems are available, this article will focus on two methods — clocking electricians in and out using electronic time clocks and tracking labor hours on handheld electronic devices.
Replacing time cards with electronic time clocks. After six years in business, Susan Vick, office manager for V&M Electric, a Bay Minette, Ala.-based commercial electrical contracting firm, grew weary of paying electricians for trumped-up overtime. Electricians would claim that they worked from 7 a.m. to 4 p.m., yet many of them were showing up late or leaving early. Vick verified her employees' labor hours by reconciling gasoline receipts with the hours reported on the time cards. After discovering discrepancies, her firm invested in an electronic time clock system to track the electricians' hours more closely.
“We bought one and put it on one jobsite, and in the first week the time clock paid for itself,” Vick says. “The electricians were apprehensive about using it at first, but after they got used to it, they didn't want to go back to the time cards.”
Tony Pappas, president of Exaktime, the Woodland Hills, Calif.-based manufacturer of the Jobclock system, says electrical contracting firms can save thousands of dollars each month by carefully monitoring their electricians' labor hours.
“Companies call us because of a couple of triggering events like a bunch of handwritten time cards that they can't read or a worker who is reporting five hours of overtime,” Pappas says.
While an electrical contracting firm may be concerned about one employee who is taking long lunch breaks, showing up a half an hour late, and cutting out of work early, they may be unaware of the other electricians who are costing the company 15 minutes a day. For example, if five workers earning $25/hr and nine workers earning $30/hr all report 15 extra minutes of work time each day, it will increase a company's payroll by at least $1,975 a month. Along with saving on actual labor hours, firms can also save on secondary costs like accrued vacation time, workman's comp, social security taxes, and federal employment taxes.
Because the system has an internal, rather than visible, time clock, the clock gets absorbed into the environment. The absence of a visible clock helps to deter clock watchers from hanging around and waiting until the clock strikes the next hour. Instead of flipping through a stack of time cards that all read 7 a.m. to 4 p.m., five days a week, office personnel will start to see hours like 7:10 a.m. to 3:52 p.m.
“It's not that the guys are dishonest, but they do get into sloppy habits,” Pappas says. “If you see the guy next to you writing 4:00 and you know it's 3:45, you're going to write 4:00.”
V&M Electric, which was founded in 1998 and specializes in commercial construction projects, uses the electronic time clock on four of its major construction projects. To track the electricians' labor hours, the company shackles a device, which is about the size of a hockey puck, to an area inside the jobsite trailer (Photo on page C8). Vick says in order to ensure the accuracy of the labor hours, it's essential to secure the clock somewhere on the actual jobsite. Although V&M decided to install its device on the inside of its jobsite trailers, the clocks can also be strapped to a pole, fence post, or even a Port-a-Potty because they're designed for indoor/outdoor use. Unlike fingerprinting, punch-in, or magnetic card systems, the clock is designed to withstand the adverse conditions on a jobsite. The system also doesn't require AC power, so electricians no longer need to tap into a client's power line.
To activate the device, the electricians carry small tabs on their key ring — a green tab to clock-in and a red tab to clock-out. The electricians are issued one red and one green key tab. If they lose them, they're responsible for paying for the replacement set. If they forget to clock-in, they write their hours down on a paper time card, which is verified by their supervisor before they're paid. When they arrive at the jobsite in the morning or return from lunch, they touch the green tab to the front of the clock. When they leave the jobsite, they touch a red tab to the time clock. If they're leaving one jobsite to travel to another location, they stop the clock with their red tab and start the clock again once they arrive on the new jobsite. Companies can also give their electricians yellow tabs to indicate travel time. The colors of the key tabs can also correspond to different activities like rough-in or finish work.
At the end of the work week, rather than picking up a stack of paper time cards, V&M's owner visits the jobsite to download all the data from the time clock onto a PDA. Vick can then print out a report to verify the information, enter the electronic data into the billing software program, and print out the paychecks for the employees. The data is stored in a standard Microsoft database, but it can be imported into Microsoft Excel, a Web browser, or a PDF format. Vick estimates that the clock saves at least two hours per week in accounting and data entry. Recording the labor hours electronically also makes it more convenient for the electricians. Instead of worrying about turning in their time cards, all they have to do is clock-in and clock-out each day, and by Friday, they're issued a paycheck.
Tracking labor hours on handheld devices. Electrical contracting firms are not only using electronic time clocks, but some companies are also tracking their labor hours on handheld electronic devices. Supervisors can keep track of their employees' hours right on the jobsite with labor management software designed for Pocket PCs and Palm Pilots. Because all of the data is in an electronic format, it can be imported into the company's accounting software.
For example, Accu-Tech Systems partnered with Bosch Power Tools to develop mJobTime labor management software, which will work with QuickBooks and MasterBuilder accounting packages and help small firms manage their labor crews. A new version of the software is designed for mid-sized firms and will work with software packages like Timberline, Wennsoft, and GEAC.
Rather than typing a lot of detailed information on a tiny glass screen, project managers are only required to fill in a limited number of fields. They can also select from pop-up menus and use default settings to speed up data entry.
Mike Soniat, president of Accu-Tech, estimates that 25% to 30% of the owners of small electrical contracting firms he's worked with already own handhelds. By using the software, he says companies can improve the accuracy and efficiency of their labor tracking by 80%.
“The traditional method of tracking labor in the field is very error-prone,” he says. “What's changed is that we can now record those things electronically.”
By investing in labor management products, electrical contracting firms are boosting their profitability and increasing their electricians' productivity. Instead of relying on traditional methods and falling behind the times, these firms are looking ahead to the future by embracing new technology.
Sidebar: Beyond Mere Labor Management.
General contracting firms often mandate the type of software that's to be used on a project, but in the case of the $75 million renovation of Denver's historic Quigg Newton Auditorium, an electrical contracting firm took the lead. Sturgeon Electric, a Henderson, Colo.-based subsidiary of MYR Group, helped to develop a project Web site to manage the labor force on the landmark project.
“Usually a subcontractor will not be leading the parade,” says Paddy Moore, senior project manager for Sturgeon Electric. “Instead we'll usually be following somewhere behind. We've been developing this software for two years, but we broke it loose on this job because it's an extremely difficult project. We felt like it needed all the electronic help that we could get.”
Moore teamed up with Bob Barton, president of Colorado Springs, Colo.-based T3 Consulting, to incorporate open source and off-the-shelf software into a Web-based collaboration suite to accommodate the archival of all of the project documents, including CAD drawings, changeorders, e-mails, photos, and video clips. The construction team has archived about 800 total drawings, a year's worth of project videos, hourly project photos, and 3,300 e-mails to date. All of the files are served from a secured off-site server, which allows the project team to access the documents 24/7 from anywhere in the world.
“If the trailer gets blown over or a hurricane hits the jobsite, they still have all their records,” Barton says.
The “Team Results” online portal allows the team to track the project's progress in real-time with a Web camera, up-to-the-minute labor management statistics, and interactive Web-based three-week look-ahead project calendars. Along with developing collaboration software packages, Barton and Moore partnered with such software vendors as Primavera, which offers a Web-based P3e scheduling software; E-Success, the developer of online estimating systems; and JobData, which provides handheld Pocket PC solutions. Two of the project managers are currently using the JobData system to record labor hours on Pocket PCs, but the foremen will also start using the software once the project approaches its peak construction level. The team is also checking labor productivity online with a chart titled “Total Productive Labor Hours,” which illustrates the amount of straight time, overtime, and double time employees are logging on the project. By keeping a detailed record of the project documents, the crew has been able to keep the job on time and within the budget.
“If you have an archive of the past, a good schedule for the future, and you understand what's going on in real-time, then you have an opportunity to manage a construction project at its highest level,” Barton says.