Turning a profit in construction is a balancing act. Rising construction costs, including materials, higher tariffs and the labor shortage have squeezed project budgets, forcing firms to look for smart ways to cut costs.
Still, margins are slim: According to the Construction Financial Management Association (CFMA), the average pre-tax net profit for general contractors can be as low as 1.4 percent. And Statista reports that construction as an industry has a 1-percent profit margin.
Considering today’s economic volatility, construction firms will be under even greater pressure to reduce high overhead. Although the cost of construction materials and labor can’t be controlled or easily predicted, construction companies and contractors can leverage the capabilities of jobsite cameras to dramatically reduce overhead stemming from the following four major cost centers:
Stolen equipment, materials and time add up to enormous losses in construction. In the U.S. alone, firms lose $300 million – $1 billion as a result of equipment and materials theft, and it’s estimated that workers steal about 4.5 hours per week from employers — six full work weeks annually. Add to that the cost of replacing stolen goods and productivity losses, and it’s no wonder construction margins are so low.
Although there are various measures firms can take to make jobsites more secure, nothing beats 24-hour surveillance via construction cameras. Advanced cameras offer motion sensors that trigger alerts if an incident occurs after hours, and the mere presence of cameras on-site deters daytime theft and buddy punching. Cameras provide undeniable visual evidence of security incidents to simplify investigations and insurance claims, helping firms recover losses faster.
2. Manual Processes
Construction firms can waste a lot of money on inefficient processes and systems, and it adds up quickly. For example, even in today’s increasingly digital world, TrackVia found that 47% of managers say critical data is still captured manually. That’s a problem, since 59% said they receive incomplete information about work quality when using manual systems, and 65% say that manual processes can cause them to miss revenue-generating change orders.
Manual documentation processes are error-prone as well as time-consuming, and too much of it can actually prolong project completion. According to PlanGrid, construction workers can lose up to two full working days trying to locate project information they need to resolve issues. And that’s not counting the time it takes to fix mistakes caused by not having the right information — 48% of rework is attributed to poor communication and inaccurate project data, adding up to more than $177 billion in labor costs.
By capturing video and photo documentation of all jobsite activity, construction cameras help firms reduce errors and manual processes and save thousands of dollars per project. Advanced solutions such as those from TrueLook integrate with project management software, as well, enabling team members to view and share live footage and photos, collaborate more effectively and keep remote stakeholders informed to speed decision making.
3. Incidents and Injuries
Injuries in construction from incidents such as falls, being struck by falling objects or electrocutions result in huge expenses for construction firms. In 2018, the average cost of lost productivity due to construction-related injuries was $1,100 per employee and resulted in 70 million days worth of lost productivity. In the case of a serious injury or fatality, the cost is much higher — construction companies can be at risk of citations, huge fines, and reputation damage. What’s more, firms can spend hours assembling evidence to assist with investigations and insurance claims.
Construction cameras combat the risk of injuries and other safety incidents by alerting project managers to potential risks in real time. If an incident occurs, they can provide visual records to the necessary agencies who can search them by time stamps to spot the incident in question and gather surrounding details. In the event of an audit or an investigation, camera logs eliminate guess-work and help facilitate a speedy resolution.
Construction firms must understand and track 29 OSHA regulations as well as numerous regulations set forth by other industry standards agencies. Inspections occur frequently — OSHA performed over 33,000 of them in 2019 — and fines for various violations run from $5,000 up to $40,000 each. Documenting processes and incidents to prove compliance in case of an audit can tax back-office teams as well, and create significant overhead.
Construction cameras reduce costs associated with compliance in numerous ways. Having cameras on the jobsite encourages workers to follow policies and procedures, reducing the risk of non-compliance and associated fines. Additionally, photos and video footage provide visual proof of compliance in case of an audit, helping to eliminate manual documentation work. All camera data is automatically uploaded to the cloud for safekeeping, and advanced solutions such as Truelook offer organizational features such as time stamping for fast and easy retrieval. With proof of compliance at their fingertips, construction firms reduce the chances of failing an audit, and eliminate much of the administrative overhead associated with compliance-related activities.
Emerge from Lockdown with a Cost-Conscious Mindset
As the world weathers the fall-out of the COVID-19 pandemic, profit margins for construction firms may be slow to recover, and the need to reduce unnecessary costs and overhead will likely intensify. TrueLook construction cameras can help. To learn more about the cost-savings and rapid ROI TrueLook cameras can deliver, read our ebook, “The ROI of Construction Cameras.”