Can Labor Tracking Technology Save You Money?

It’s critical to weed out any waste or fraud on every construction project. 


Labor makes up an average of 40 percent of all construction project costs. And the more labor-intensive a job is, the higher that percentage goes. So it’s critical to weed out any waste or fraud, such as from intentionally padded timesheets, "ghost" workers invented by the person who writes the payroll checks, and disorganization or clerical mistakes.

The weak link in the timekeeping system is humans. Any process that is left up to people is vulnerable to errors and abuse, and timekeeping is no different. The solution: automated labor tracking technology.

Features vary from system to system, but the pivotal feature of most is the ability to determine how many employees — or subcontractors' workers — are on the site at any given time. This is achieved through strategically placed radio frequency identification (RFID) readers and the accompanying tags, or badges, workers wear.

Managers can see how a subcontractor is staffing the project — important because they sometimes bill for labor based on the number of workers — and whether employees are where they're supposed to be. If everyone is required to wear a tag while on the job, the problem of paying "ghost" employees or overpaying real ones for hours they spent elsewhere is eliminated.

RFID systems can also be configured so that an employer knows which section of a jobsite an employee is in. If, for example, if an electrician is spending a lot of time outside where trenching operations are happening, it could be a sign that he or she likes to socialize with friends on the excavations crew, or that the employee is working on something in error.

These systems are more than just trackers. Managers can set each tag by trade and other employee characteristics and import that data into job costing software to reveal how much time is being spent performing the work compared to the estimate. These insights can lead to better labor estimates for the next bid — or motivate workers to perform more efficiently.

Labor tracking tools also make it possible for employers to locate personnel in an emergency and make sure everyone is in a safe section of the jobsite during evacuations.

Down the road, there are sure to be questions about privacy, but considering the potentially large positive impact on the bottom line, the increased use of this technology is practically inevitable.


Kim Slowey is a writer who has been active in the construction industry for 25 years and is licensed as a certified general contractor in Florida. She received her BA in Mass Communications/Journalism from the University of South Florida and has experience in both commercial and residential construction.


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