Institution: Maxim Consulting

Addressing Inequitable Payment Practices

More contractors go bankrupt due to cash flow than because of profitability. EC contractors have little leverage to change owner and GC behavior on payment.



Addressing Inequitable Payment Practices explores various perspectives on payment practices, payment clauses, the impact of carrying costs, and recommended strategies to mitigate payment challenges.

Review how inequitable payment practices and clauses are significantly impacting specialty subcontractors’ cash flow cycle including:

  • Limiting company growth as new projects cannot be financed
  • Requiring staff reductions to lower overhead costs in order to avoid losses or reduce the inability to hire additional people
  • Delayed payment to vendors and material suppliers leading to higher materials costs, ultimately impacting future bid competitiveness
  • Reduced profitability caused by the cost of financing working capital requirements
  • Slow-paying jobs, hindering a contractor’s ability to take on additional projects
  • Possible bankruptcy

Learn specific mitigation strategies EC contractors can adopt to help address payment problems.  The report’s appendices serve as useful guidelines on state-specific payment laws and lien rights, talking points for owners and general contractors, and vendor education to help EC contractors understand how the issue impacts their pricing.

 

Electrical Contractors: Driving Through Business Growth Roadblocks

Every electrical contracting business will face challenges. The way you deal with them will determine your ability to grow your small business profitably. Small business owners wish their growth trajectory was ever upwards. Unfortunately, small business is complex, with many ups and downs in expansion. A multitude of factors influence and determine small business success, including finance, technology, staffing resources, sales and competitors. Most obstacles can be avoided and many issues can be managed to success. Unattended, these issues can steal our focus, sap our financial resources and, sometimes, derail our most important initiatives.

What can we do to remove these roadblocks so we can capitalize on our opportunities to succeed? This report contains strategies to help address the issues preventing electrical contracting business growth.


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Key Performance Indicators: Increasing Margin and Reducing Risk

A Key Performance Indicator (KPI) is “A quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance.” A KPI considers the business’s context, strategies, and values and is a metric that incorporates performance targets so companies can track their progress toward goals.

There is increased interest in KPIs, with many contractors either currently using them, trying to implement them, or expressing a strong desire to do. Despite growing knowledge of metrics and the benefits of key performance indicators, many contractors have not implemented them because they are unclear how and where to begin.

KPIs are critical both for determining a contractor’s success and making necessary adjustments for optimal success and profitability. The objective of this study was to research and provide a practical guide for contractors to use KPIs in their companies.

 

KPI Evaluation Tool: Take a deep dive into pertinent key performance indicators (KPIs) and see how your company measures compared to your peers within the electrical construction industry. Functional areas such as business development, estimating, finance, operations, prefabrication, purchasing, field installation and more are built within this benchmarking tool. Properly established KPIs are more critical today and with an understanding of how to use metrics to monitor performance, increase profit margin, and reduce risk will support optimal success and profitability.

Download KPI Evaluation Tool

 If you found this report useful, please help us continue our mission by contributing to ELECTRI:

Click here to contribute to ELECTRI International

PANDEMICS AND CONSTRUCTION PRODUCTIVITY: QUANTIFYING THE IMPACT

PLEASE FIND THE FINAL VERSION OF THE REPORT HERE

A pandemic can have far reaching impacts on the U.S. economy. Companies in once successful industries across the United States have felt the immediate impact of the current pandemic in the most devastating ways.

Early measurements of the impact of this pandemic suggest that construction productivity has been impacted by nearly 20%. A rule of thumb for self-performing contractors is that a 10% impact on productivity results in a 100% impact on profitability. As such, contractors need to consider seriously the impact of this study on their profitability and seek equitable adjustments that adequately compensate them for the impact.

This study is divided into three distinct sections:

  •  Part I – Pandemic Mitigation Tracking – specifically quantifies hours associated with preventative measures such as training, health screenings, cleaning and disinfecting, job site access and administration instituted to minimize exposure.
  •  Part II – Productivity Benchmarking – specifically quantifies the reduction in direct work productivity related to social distancing rules, staggered shifts, reduced crew sizes, increased personal protective equipment requirements and related job site regulations.
  • Part III – Business and Project Impacts – specifically quantifies ancillary impacts experienced by most contractors who participated in this study.

Here are supporting documents and videos to make it easier to consume the information in the report:

 

Pandemics and Construction Productivity Report – Initial Findings
COVID-19 has had substantial impacts on many segments of construction and contractors have limited tools to measure the effects this is having on their businesses. This webinar shares the findings of a 5 week intensive ELECTRI research study that shows productivity impacts measuring pre and post pandemic results due to new safety requirements. This webinar also introduces tools to identify and quantify impacts on productivity that will serve as a starting point for negotiations.

Sign in to view webinar here
View webinar slide deck here

 

Pandemics and Construction Productivity Study Overview
This video will provide individuals with an overview of the report findings relating to productivity impacts as a result of new PPE requirements and social distancing guidelines.

Pandemic Mitigation Tracking Overview
This video will provide an overview of the report findings relating to lost hours on job sites as a result of new safety requirements.

Pandemics and Construction Productivity Study
This video will provide further details to help quantify productivity impacts by task as a result of new PPE and social distancing guidelines.

 

Pandemic Business Impacts Overview
This video provides and overview of projects specific impacts that contractors are most frequently facing around the country.

Pandemic Business Impacts Contractors Interview
This video includes interviews with contractors sharing their personal stories of how their own jobs are being impacted by COVID-19.

Pandemic Change Order Calculator
This video will help contractors quantify their own project-related impacts by using the change order calculator which can be downloaded from the link below video.

Change Order Calculator:
Download Calculator

Frequently Asked Questions

If you have questions please reach out to your local chapter executive. If they do not have an answer to your question reach out to

Ryan Courtney – ryan.courtney@necanet.org

or

Josh Bone – josh.bone@necanet.org

 

PANDEMICS AND CONSTRUCTION PRODUCTIVITY: QUANTIFYING THE IMPACT – Final Version

A pandemic can have far reaching impacts on the U.S. economy. Companies in once successful industries across the United States have felt the immediate impact of the current pandemic in the most devastating ways.

Early measurements of the impact of this pandemic suggest that construction productivity has been impacted by nearly 20%. A rule of thumb for self-performing contractors is that a 10% impact on productivity results in a 100% impact on profitability. As such, contractors need to consider seriously the impact of this study on their profitability and seek equitable adjustments that adequately compensate them for the impact.

This study is divided into three distinct sections:

  •  Part I – Pandemic Mitigation Tracking – specifically quantifies hours associated with preventative measures such as training, health screenings, cleaning and disinfecting, job site access and administration instituted to minimize exposure.
  •  Part II – Productivity Benchmarking – specifically quantifies the reduction in direct work productivity related to social distancing rules, staggered shifts, reduced crew sizes, increased personal protective equipment requirements and related job site regulations.
  • Part III – Business and Project Impacts – specifically quantifies ancillary impacts experienced by most contractors who participated in this study.

Here are supporting documents and videos to make it easier to consume the information in the report:

Pandemics and Construction Productivity Report – Initial Findings
COVID-19 has had substantial impacts on many segments of construction and contractors have limited tools to measure the effects this is having on their businesses. This webinar shares the findings of a 5 week intensive ELECTRI research study that shows productivity impacts measuring pre and post pandemic results due to new safety requirements. This webinar also introduces tools to identify and quantify impacts on productivity that will serve as a starting point for negotiations.

Sign in to view webinar here

View webinar slide deck here

 

Pandemics and Construction Productivity Study Overview
This video will provide individuals with an overview of the report findings relating to productivity impacts as a result of new PPE requirements and social distancing guidelines.

Pandemic Mitigation Tracking Overview
This video will provide an overview of the report findings relating to lost hours on job sites as a result of new safety requirements.

Pandemics and Construction Productivity Study
This video will provide further details to help quantify productivity impacts by task as a result of new PPE and social distancing guidelines.

 

Pandemic Business Impacts Overview
This video provides and overview of projects specific impacts that contractors are most frequently facing around the country.

Pandemic Business Impacts Contractors Interview
This video includes interviews with contractors sharing their personal stories of how their own jobs are being impacted by COVID-19.

Pandemic Change Order Calculator
This video will help contractors quantify their own project-related impacts by using the change order calculator which can be downloaded from the link below video.

Change Order Calculator:
Download Calculator

Frequently Asked Questions

If you have questions please reach out to your local chapter executive. If they do not have an answer to your question reach out to

Ryan Courtney – ryan.courtney@necanet.org

or

Josh Bone – josh.bone@necanet.org

 If you found this report useful, please help us continue our mission by contributing to ELECTRI:

Click here to contribute to ELECTRI International

The Electrical Contractor as the Integrator

The low voltage market is more profitable than the traditional electrical market, in some cases twice as profitable or greater. This key finding comes from ELECTRI International research evaluating contractors who perform both traditional electrical work and low voltage work. Equally important, almost half of all electrical contractors expect the low voltage market to double in the next five years. The conclusion? The low voltage market represents a significant area of growth in revenue and profitability that electrical contractors are well positioned to enter to their advantage.

ELECTRI International commissioned a major research initiative to develop a guide for ways an electrical contractor could enter and facilitate growth as an integrator in low voltage systems.  Investigators from the Maxim Consulting Group confirmed that rapid changes in low voltage systems and the convergence of the information technology market are creating a need for a more highly-skilled contractor base and workforce across a broader range of low voltage systems.

With the growth of low voltage systems, the EC industry is responding by cross-training its electrician base with technical and engineering skills related to low voltage systems, as well as hiring new low voltage technicians.

The detailed manual helps guide contractors towards a low voltage systems strategy by answering three questions:  Which markets? Which verticals? What competitive differentiators?

The Electrical Contractor as the Integrator: Systems Integration Specialists as the Key

In 2018, ELECTRI International commissioned a study that reported the low voltage market is expected to double in size over the next 5–7 years. The study also found most traditional electrical contractors are well-positioned but ill-equipped to scale their low voltage operations beyond a complementary role to traditional electrical work.

With the growth of new low voltage power-based technologies and digital solutions, the low voltage
market has evolved immensely over the past few years. Today, electricians are no longer individuals just installing cables to turn lights on. Their work is increasingly sophisticated and wide-ranging. The low voltage market offers important job and business opportunities that are local and long-term, and it delivers a wide range of services and installations for an electrified and digital world.

However, the growth of the low voltage market has not been met by a corresponding NECA contractor growth. The average electrical content of a construction project for a high-rise building has grown from 10% to over 20% due to advances in electrical technologies such as smart technologies and low voltage systems. At the same time, the number of IBEW electricians and technicians has not kept pace with the growth of the electrical content.

THE EXECUTIVE ORDER IMPACT ON COVID SAFETY PROTOCOLS FOR FEDERAL CONTRACTORS

ELECTRI International, New Horizons Foundation, and John R Gentille Foundation jointly funded research from Maxim Consulting on the Executive Order Impact on COVID Safety Protocols for Federal Contractors. This research outlines the potential cost implications that contractors should evaluate on each project along with recommended actions to manage through the executive order. The research also includes sample contract change order language.

 If you found this report useful, please help us continue our mission by contributing to ELECTRI:

Click here to contribute to ELECTRI International

The Future of Line Contracting: A Workforce Transformation

In January 2020, ELECTRI International commissioned Maxim Consulting to conduct a research initiative specifically addressing the Future of Line Contracting. The study first evaluated major trends driving the transmission line market. Second, the research consultants collected in-depth contractor-specific information on ways to capitalize upon these trends.

When studying contractors, the focus was on the following areas:

  • Their market forces
  • Technology and Tool changes
  • Processes and Operations
  • People, Labor, and Competencies
  • Industry Changes
  • Regulatory Changes

This study seeks to help guide contractors towards a future strategy by answering three questions:

  • What trends and market forces are driving the future of line construction projects?
  • How do you retain the knowledge accumulated by linemen and workers who are nearing retirement?
  • What process and systems will you introduce to transform the workplace and fill those worker gaps more quickly?

future of line contracting video
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 If you found this report useful, please help us continue our mission by contributing to ELECTRI:

Click here to contribute to ELECTRI International