One of the most overlooked resources for electrical contractors in improving their productivity and profitability is the estimate that was created for the purpose of bidding or negotiating the job in the first place. The purpose of generating an estimate is to calculate material and labor costs, yet too often this information is left aside in the crunch of getting the job started or the many other challenges of running what is inevitably a hectic business. Excuses aside, this information can be extremely helpful in tracking a job and even more beneficial in improving the productivity by setting goals which can motivate employees to higher production results.

With electrical contractors of all sizes, from 2 to 200 employees, it is usually the smaller contractors who are less likely to use the estimate to help them manage a job. Whether it is lack of time, lack of know-how, or even the lack of software tools to do this, it seems like the smaller contractors are more likely to miss this opportunity to make their jobs more productive and profitable. This doesn’t need to be the case because the concepts are important for all sizes of jobs and the know-how and software tools are available to any size of company.

Let’s start with the most obvious or at least more tangible information that comes from a bid. Most electrical estimating programs have the ability to sort the materials from a job in a number of different ways. A report that simply groups or sorts the similar materials together is a good starting point. For example, the following categories cover the majority of most electrical jobs: 1) Raceway, Fittings & Boxes, 2) Wire & Cable, 3) Fixtures, 4) Switchgear, 5) Wiring Devices and Covers, and 6) Underground. With subtotals for the material and the labor for each of these groups, it is easy to project manpower needs for each portion of the job. If an estimate indicates that the job requires 200 hours for the installation of the light fixtures, it is easy to plan how many electricians will be needed for the number of days allowed in the schedule. The material values are important as well. In these times of uncertain and skyrocketing pricing, as well as limited availability, it is important to know which parts of the job are the most costly so that purchasing can try to get a head start.

Most programs also allow the estimator to sort the materials in a job many other ways. It may be necessary or helpful to breakout the material and labor for a job for each floor, for each section or area, or even down to each room. Often, estimators or project managers will go back and edit the original bid or even re-enter it if they feel that a more detailed breakdown will help them organize, track, and run the job. Project managers may spend many hours re-inputting and/or reorganizing their estimate to prepare the types of reports that will help them through a long and complex job. Obviously, larger jobs have more potential savings for these efforts, but the principles apply to all sizes of jobs. Not being organized to startup and track a small job can be just as disastrous or even worse in that by the time you realize that the job isn’t going well, it is too late because the job is nearly or totally completed…

An even smaller number of electrical contractors use their estimates to establish goals to motivate their employees (or themselves). An employee without a goal will not be as productive as one who has a goal. It’s just human nature to work harder if we know what the goal is and can achieve a reward for attaining or surpassing those goals. An estimate has the basis for creating goals. Project managers often focus on the more general goals – the budgets for the material and labor for the more general categories discussed above. For motivating the actual workers, it’s best to break down goals to the smallest level possible. Instead of a goal of x hours for a section of the building, it’s better to establish a goal for the footage of pipe or wire which can be installed in a day, or even the number of outlet boxes per day.

Tying performance to goals and rewarding for performance is the most effective way to improve productivity. Rewards can be monetary, such as a bonus, a portion of the profits, or a raise; or they can be non-monetary, such as praise, recognition, a promotion, etc. Simple rewards like tickets to sporting events or a dinner are greatly appreciated by most employees, especially if the award is accompanied with recognition in the organization. Sometimes a job will lend itself to setting up competition between individuals or crews. The desire to win a competition will drive most people extremely hard. It’s human nature to want to win, whether it’s the monetary benefit or recognition accompanying that, or whether it’s just for the pride of winning or being the best. It’s almost surprising how little it takes to motivate people. It’s more surprising how seldom we utilize this.

There is a wealth of valuable information in an estimate. Start by using the information to organize and track your jobs. Then look at how this information can help you establish the productivity goals that can truly make your organization more profitable.

Click the link below to learn more about Electrical Bid Manager – Estimating Software:
http://www.visioninfosoft.com/products/electrical/ebm/index.php

written by Brian Hoffelder – Vision’s Software Training Professional
1-800-258-7752 x120