3 Reasons Contractors Should Outsource

In theory, a construction project follows a tried-and-true process: Estimate a job, win the bid, do the work correctly, keep up with paperwork, and get paid – all on schedule and under budget. Unfortunately, a construction job isn’t nearly that simple or straightforward. In this article, we will reveal just how damaged that process is. The 2020 National Construction Payment Report: Spring Spotlight on Jobsite Coordination shows just how the construction industry has grown to accept a status quo that’s far from ideal; from coordinating work on the job site to chasing down slow payments, we implement systems and processes designed to improve workflow, communication, payment collections, and ultimately, your bottom line

How challenging is coordinating job site work?

Coordinating all the puzzle pieces on a construction project requires processes that support open, transparent communication and a high degree of collaboration. Those processes are required between contractors, subs, suppliers, field workers, and back office staff. Unfortunately, poor communication and planning are causing the process to break down – costing your construction business time, money, and reputation. Although plentiful, delays in a construction project are usually preventable. Communication and coordination between the general contractor and their office are notoriously difficult. We estimate that nearly 70% of contractors feel that poor job site coordination often causes projects to run over budget or past deadlines. This leaves much room to improve. How does your office process stack up against the status quo?

Wasted time

Research has shown that construction businesses are losing more than 1 full day of work every week due to inefficiency. Two-thirds (66%) spend more than a quarter of their work hours waiting for paperwork to be processed. These hours and days add up over the year, and can eat into cash reserves. Paying workers to wait or spending time coordinating working hours with their teams only adds to a contractor’s cash burden. The lack of jobsite coordination and efficiency between a contractor and its office ends up preventing contractors from doing the work they were built to do. Some contractors interviewed say that their company spends less than half of their time doing actual construction work, and 85% report spending more than 1/4 of their time tracking & reporting on project progress.

That’s a lot of wasted time! Spread the workload and designate your time to what you do best and let Virtus do the rest.

Loss of money

Communication is critical to the bottom line in an industry with super thin margins. Wasted time and energy leads to higher costs and lower profit. Research shows nearly 60% of construction businesses say that failing to complete a project on time and on budget due to poor upfront planning results in lower or delayed payments for their work. When we asked contractors about the factors most critical to getting paid on time; planning and coordination between the office and field staff came out on top. “Meeting timelines,” said one. “Passing building inspections,” said another. “Timelines and details.” and lastly “Doing it right the first time.”

Loss of reputation

Reputation and relationships are everything in the construction business. GC’s and owners want to make payments and keep the work moving forward, and subs want to do great work and get hired for more jobs in the future. At Virtus, we have found more than half of construction businesses (55%) say that failing to complete a project on time and under budget damages their reputation.

It’s common knowledge that construction projects rarely go exactly as planned. Change orders, bad weather, failed or delayed inspections , and other slowdowns throw a wrench into best-laid out plans. Every project manager has a threshold for how much delay is acceptable. Proper planning, resource allocation, and communication are paramount for contractors to ensure their work stays under that threshold. Jobsite efficiency is critical to maintaining relationships and protecting a business’s reputation.

The staff at Virtus Support Services have extensive experience with project coordination related to the construction industry. We work daily with general contractors, subcontractors, owners, and builders, in contract lifecycle management, payment collections, estimating and quantity takeoff management, and more, related to all phases and trades in construction. Right from the start, we will assist with the drafting of contracts, supply agreements, and credit applications and work with you every step of the way for efficient project execution. If a payment dispute should arise during the process, we will provide collection services and work to protect your interests to bring your project to completion. Contact us for further information!