For week three of the MEP Masterminds virtual event series, mastermind of the week, Josh Bone of the National Electrical Contractors Association (NECA), led a discussion about the future of the electrical industry: Since the world has changed so much, what lasting effects will there be?
“I wanted to have a different kind of conversation,” began Josh. “A lot of our contractors are struggling right now, and they don’t even know it. They’re not measuring performance, and they’re taking a huge hit on productivity.” Josh wondered aloud: What’s the impact of social distancing guidelines and PPE requirements? Essentially, what’s going on?
“I dove into that research deeply,” Josh said. “I started talking to electrical contractors all over the country. I was shocked that some of them … aren’t measuring their success today.” When it comes to the impact of the pandemic, there have been many hours lost. But what about the lost productivity, too? How do we benchmark and continuously improve in an uncertain environment?
Josh shared some preliminary findings about this: according to his research, the pandemic has impacted construction productivity by nearly 20%. “A rule of thumb for self-performing contractors,” Josh added, “is that 10% productivity equals a 100% impact on profitability.” As the percent of productivity impact increases, the profitability declines until contractors are “looking at zero dollars in profit.” In order to combat this, Josh suggested, contractors need to “seriously consider the impact on their profitability and seek equitable adjustments.” Not measuring performance will do far more harm than good in the end.
Certain geographical areas have definitely experienced a harder hit due to the pandemic, and Josh mentioned that certain types of projects have as well. Activities like “close proximity work,” he said, were impacted most. While they may have been able to continue working on projects, workers still needed to follow social distancing, which affected their productivity and efficiency. “You can see there was a significant drop in Overhead Rough In,” he said. “It’s closer to 40% that needs to be looked at as a productivity hit.”
Discussion topics included what has been learned from filing previous change order claims, why it’s important to track productivity, how to define productivity, accommodating social distancing, how the pandemic has affected companies and technologies, and how to help minimize the impact on productivity due to new safety requirements. Representatives from a variety of companies who joined the virtual event agreed that more people have come to embrace prefabricated construction, cloud-based workflows and digitization. While many companies have been able to adapt to the pandemic, it’s been difficult to “have impromptu conversations to push things forward.”
Join in next week’s MEP Masterminds virtual event, “Mentoring Across Generations and Skills,” with MEP industry specialist David Francis. He urges workers to pay heed to people, no matter what age, craft or position. Learn to listen and ask questions, because most people enjoy passing along stories and experiences. You can learn more tips from David in a May Bridging the Gap episode titled, “Advice from a BIM Manager…” where he talks about increasing efficiency and profits.
Lessons learned come in many forms, like participating in the upcoming virtual MEP Force conference. Sometimes the smallest things can be the best teachers.