KPIs for construction industry
KPI stands for key performance indicators, and it’s a way of measuring how successful something is. From a construction standpoint, KPIs help you understand how successful your project has been. As a result, you can use this information when starting new or corresponding projects.
What are the aims of construction KPIs?
Construction KPIs aim to help you see how each different organization performs within a particular project. There are three key areas to look at here:
- The quantity surveyor and general assistant
- Construction project manager
- Construction supervisor
Each area will be looked at to see how they all contribute to the overall success of the project. Of course, there’s a whole project goal to keep in mind as well. How do these people help achieve the product goal and retain customers in the construction industry?
What are the examples of construction KPIs?
There are almost too many construction key performance indicators to go through them all. But, we can look at a few common and important KPIs that help you measure success.
How productive is your laborforce? This is often a key indicator of how successful your performance is. Ideally, you need the labor productivity rate to be high. Why? Because it means that numerous tasks are being completed every single day. The less productive the workforce is, the longer the project will take to complete. As such, this can ramp up the overall costs.
Safety and inspections
Health & safety forms a key part of your construction KPI metrics. Can you deem a project a success if you had numerous incidents on-site? If lots of your employees are getting injured or phoning in sick, then how does this impact the overall success? Obviously, the more safety issues there are, the worse it is. They cause disruptions, which leads to a lack of labor productivity and slows down the entire project. It can also be costly as you need to hire new employees to replace injured ones and pay to deal with any safety problems. So, a low health & safety incident rate is an indication of a successful construction project.
Naturally, one of the best ways to see how impressive your performance is is by asking your clients. If the satisfaction rate is high, then that shows you were successful from the client-perspective. Regardless of anything else, you can be safe in the knowledge that you met their expectations and achieved their goals. However, this doesn’t necessarily mean the project was a total success as other things can come into play.
Construction time and cost
Speaking of other things, the cost and duration of construction are vital. Yes, your clients may be satisfied, and your health & safety was excellent, but how much did everything cost? Add up all of your total expenses to see what it cost to achieve your goals. Ideally, you want the cost of construction to be less than what you’re paid by the client. As a result, you’ve made a profit.
Otherwise, you will build something without getting any reward out of it. The construction time ties into this as it often goes hand in hand with the costs. As we mentioned before, the longer a project takes, the more expensive it is.
Impact on environment
The construction industry must be wary of how it impacts the environment. Having as little an impact as possible is the benchmark to aim for here. This means measuring things like the amount of carbon emissions produced during construction, the amount of energy used, the amount of non-recyclable waste generated, etc.
There are loads of other key performance indicators for construction projects, but we don’t have time to go through them all. In essence, you’re looking at all the different elements of your project and how they help you achieve your goals. Don’t just think about it from the labor perspective – think about the three key areas of management we spoke about earlier; quantity surveyors, project managers, and supervisors all play vital roles that contribute to the all-round success of a project.
How do you use construction KPIs?
When you’ve collected all the metric data, how do you use it? Effectively, key performance indicators help you improve your construction business. They can be used as a benchmark to compare yourself to other companies in your industry. In turn, this can aid you with things like customer retention, employee acquisition, and much more.
For example, your KPIs may show that you have a remarkably low accident-rate and high employee satisfaction. As such, this can be used to encourage new workers to join your team, improving the talent and quality of your workforce. The same goes for client retention – if you consistently have high client satisfaction and reach all their goals, then there’s more chance they keep coming back to you for their construction needs.
Furthermore, you can use KPIs to be more prepared for future projects. When you’re looking at your KPI dashboard and seen figures for all the costs and expenses, it gives you a better idea of how to prepare quotes for future projects. You can outline how much things will likely cost you based on the materials used, employees needed, and so on.
It also lets you create a more accurate project plan for future jobs too. As an example, you may have seen that you took a lot longer to complete a job than you initially thought. By taking this data, you can see how to improve productivity and layout a more accurate plan. As a result, you don’t end up in situations where you promise a certain end date but can’t achieve it.
In conclusion, KPIs are crucial in the construction industry. First and foremost, they let you see if your project can be considered a success or not. Did you meet client expectations? Were your employees happy? Did you have a lot of safety incidents? Was the project profitable? So many questions must be answered, and you can use KPIs to answer them. In turn, you can also prepare for future projects with more accuracy and certainty. Also, use your KPIs to measure your business against others, which lets you see where you stand in the industry.