A Sustainable Workforce Starts With You

Cutting Costs, Cutting Quality

In our current economic situation, when money is tight, most subcontractors face the same dilemma.  The owners are demanding the least expensive project cost all the while believing that the project will be built "Per Plans & Specs", and "On Time."  Each general contractor has their own set of safety and quality standards.  The sub then has to submit their proposal knowing the material costs are almost the same, the labor hours somewhat comparable, and the equipment similar.  Really, the main variables are overhead and profit.  Now that general construction jobs are limited, the profit is minimized or set at breakeven and overhead has already been cut to the bone, so where does that leave safety and quality?  It takes money for employee training sessions, meetings, and safety equipment. Quality comes from attention to detail and an employee mindset where craftspeople evaluate their own work and ask "would I buy this?"  This level of quality adds cost to a job, creating an unequal playing field when jobs are bid.  Desperate subs may decide that the easiest costs to cut are safety and quality.

Unfortunately, neither the owner nor the general contractor will understand what they have sacrificed until later when they see the job slow down due to accidents, insufficient manpower and poor quality.  You would think they would learn their lesson but this scenario repeats itself over and over.  I still remember a potential customer telling me they would "Manage the Risk" on a sizable job and then hiring the contractor who submitted the lowest bid.  I only wish I could have been around to say "I told you so" when later I found out about the poor performance on that job.

It will be left to those of us who value safety, quality and sustainability to quantify these standards, requiring all subcontractors to submit quality and safety program information as part of their bid.  Until these items can be quantified, I don't believe things will change.


Comments

Anonymous's picture

I agree that there are items contractors are asking to minimize or give up to get the costs where owners want them. However, this has been ongoing for a long time and will continue down that road due to the nature of our business. Someone always needs work really bad so they can keep their company running and their employees working so they do what they have to do to make this happen.

Our defense is to be selective with what we will do and who we will do it for. Compromising on safety is not an option as it is getting more and more important in everyone's eyes. As for the training sessions you mention most companies stopped having those many years ago because they cost the company too much money and people were not being retained so the company did not get the benefits.

Coming from three generations of construction and actually being in the business for 37 years iI have seen this same discussion as an ongoing issue. I remember setting around the dinner table hearing my grandfather, my dad and his brothers having the same discussions. Of course the only solution ever agreed upon was "we need to educate those guys". Well the education process hasn't worked because it is now the bean counters that are pushing for lower costs and they don't care what you have to do to get there.

It is not my intention to be so pessamistic but with all of our efforts to date the return has not been good. However, we must keep pushing to educate the owners, find better products for the same or less money, and instill a since of pride in our employees.

Anonymous's picture

David, no doubt someone with an MBA or marketing or research degree has already done a cost-benefit analysis on safety, quality, and sustainability in other industries, if not construction. Check out DOL, OSHA, Consumer Protection Agency or EPA websites for reports. The question is: what will get the folks interested in a quick buck to accept a longer-range ROI?

Jerry Wald, MPH

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