Return on your people investment - Average Income per Hour Worked

One of our specialist areas at CRM is the Construction Industry. Over the recent months we appear to be having more and more discussions about a teams productivity and return on investment.

Your workforce is an asset and often one of your largest costs or as we like to view 'investment'. Therefore, managing the effective use of time is crucial in order to maximise profitability. 

One metric you can use is Average Income Per Hour Worked. You can break this down to a day average, job average or even reflect against an individuals performance.

To calculate your Average Income per Hour worked, you will need to divide your 'Income per Job / Day' by the number of 'Hours worked on the Job / in the day'.

This ratio calculation relates how much income is actually being generated on average for each hour your team are committed to a job. Don't forget to include non-site work such as any admin or travel time. Of course, you can go deeper with full job cost management, but this is a great snapshot of productivity and also a metric to help you reflect on your charge out rates.

From recent discussions and calculations with our clients, there have been a few surprises, especially some of the larger jobs or those that are more remote from the day to day management of the owners. Such reflection may influence your business strategy and the type of work you are looking to attract.

If you would like to discuss how we may be able to help your construction business, then please call us on 01865 379272.