Strategies for Reducing Construction Costs
In Jim Veenbaas’ “10 Ways to Reduce Construction Costs” article, several points of cost saving advice are given to construction companies. Here is a summary of the 10 described ways to reduce costs.
Create a contingency fund – Contractors save when they submit low costs bids, and fall back on a contingency fund if they cannot cover all of their expenses.
Use IT – Technology can help workers communicate better and reduce the chances of miscommunications that would lead to costly problems.
Recruit from outside of the province – Local sub-contractors and workers can often be more expensive than hiring workers from other provinces.
Proﬁt from prefabs – Pre-assembling parts at the shop and shipping them to the site location leads to more control over costs because it ensures that weather does not cause delays and production can be closely monitored.
Bank on lower prices – At the beginning of a project, purchase as much material as possible to take advantage of the early-payment discounts some suppliers offer.
Put safety ﬁrst - Keeping workplace injuries to a minimum can significantly reduce WCB premiums.
Attract and retain workers – Keeping highly skilled employees will always be less costly than hiring new employees to replace them.
Choose design-build – The designer and builder work as one team and under one contract, to reduce administration, claims and litigation.
Manage better – A more productive company will also be more profitable. There are many factors that can influence productivity, such as lack of detailed planning, skill, experience, etc.
Identify potential problems early – Finding ways to identify problems before jobs are completed will help reduce the costs associated with finishing a job done incorrectly and having to redo it.
To read more on this topic, see Jim Veenbaas’ “10 Ways to Reduce Construction Costs” article.