Running a construction company can be a lucrative business. Depending on what kind of construction they specialize in, a company can land massive contracts and set themselves up for huge potential earnings, should they do a good job.

One thing most people do not realize about the construction industry, however, is how much labor actually costs. Even the most basic construction worker makes a decent salary compared to the average low-level workers in most other industries.

This is because construction work is some of the most physically demanding work, and labor unions have managed to raise the minimum wage for this kind of work to a significant level. Fortunately, for construction company owners and anybody else who profits off lower labor costs in the industry, there are more than a few ways to bring the cost of labor down.

How to Reduce Labor Costs During a Construction Project

Without cheating their employees, construction companies have learned some really inventive and ingenious ways to reduce labor costs without sacrificing an ounce of quality. If you are someone looking for clever ways to slash your labor costs during a construction project, let us look at 3 ways you can do exactly that.

1. Estimate Your Costs Before Anything Else



construction workers

This might seem like a no-brainer, but it is not so cut and dry in the construction industry. For example, there are typically two types of contracts drawn up for construction projects, fixed-price, and time and materials contracts. By taking into consideration your employee turnover rate and cost of labor, you can make the best choice for your business.

If you have everything planned to a tee, a fixed-price contract might be better suited for you. Assuming you hit your milestones on time, the price for a fixed contract will not change as it might in a time and materials contract. This can motivate your team to get things done on time without lagging.

2. ICF Construction

One great way to reduce labor costs in the construction industry is to use a very different system for building a project. ICF house construction, for example, is one popular building method taking the industry by storm. ICF, otherwise known as insulated concrete forms, uses a different method of construction than typical concrete-based buildings.

By using hollow concrete-hybrid blocks that are interlocked together, ICFs are able to save builders a ton of money. This is because these blocks are installed much quicker than your average concrete construction job. They come pre-made, meaning you will not have to spend precious hours molding and laying bricks down piece-by-piece.

The construction time for an ICF job is noticeably less than other types of construction, and the final product is not only on-par but in many cases surpasses that of buildings put together using more traditional methods.

3. Thermo-Brace® Sheathing


Thermo Brace Sheathing


In lieu of typical OSB sheathing, consider using Thermo-Brace® sheathing from Barricade®. This lightweight structural sheathing is able to lower the overall cost of construction for builders while meeting or exceeding the buildings codes for that local area in many cases.

Thermo-Brace is a thin sheathing for walls that features a composite core. This core is able to provide your walls with more than enough strength while offering additional resistance to moisture. Because it’s extremely cost-effective and lighter than typical OSB sheathing, you’ll be able to install it in a much shorter time-frame.

Assuming your workers are paid by the hour, this is an incredibly efficient way of reducing labor costs while providing just as much, if not MORE value to your customer.

Cutting Labor Costs is Easier Than It Looks

Just because the average construction contract is worth a lot of money, doesn’t mean you have to settle for whatever you’re making now. There are always ways to improve your bottom line and cut costs in any industry, and construction is no different. There are a few ways to improve your profit margin without sacrificing your reputation as a construction company.

It is always a smart idea to take full stock of your capabilities and your project timeline before you begin, that way you can enter into a fixed-price contract for a cheaper price and make sure your team is able to meet every deadline. Doing so will not put you at the mercy of a time and materials contract, which can cost you more and more the longer a project goes on.

By using all three of these tips we discussed, you should be able to cut your labor costs by a decent margin, while maintaining your reputation as a solid and trustworthy construction company.