Contractors are responsible for recruiting, hiring, training, and retaining workers. But when challenges arise, owners have the most to lose. The LRM, meaning Labor Risk Management Program, uses metrics-driven accountability to help select the right contractors, establish a culture of workforce investment and training, and reduce labor risk on projects.
For decades, industry has recommended that owners only work with contractors that invest in training and maintaining the skills of their workforce. The LRM helps owners effectively evaluate contractors for workforce training and development capability — facilitating more effective project labor planning, execution, collaboration, and measurement.
Determine which contracts or projects are appropriate for the LRM. The owner or general contractor commits to deploying the program for current or upcoming projects.
Deploy the LRM early in planning, before contractor bidding and selection. Include workforce development compliance in contract language.
Contractor’s project data communicates workforce training priorities and performance history. These data points – availability risk, cost escalation, quality/rework, productivity, safety, and CWDA score – enable owners and general contractors to gather key metrics and labor data to effectively evaluate risk before awarding contracts.
Using the contractor’s baseline project performance data, the owner and GC establish realistic, achievable goals, expectations, and outcomes for labor-related project performance and risk management. Risk information and workforce improvement metrics are reported on a structured timeline, with results continuously measured and benchmarked against expectations.
The LRM program fosters an innovative partnership between owners and contractors to enhance craft labor competency and measure progress at regular intervals. Owners benefit from improved project outcomes. Contractors benefit by increasing competitiveness.
Learn more about the Labor Risk Management Program — and how to overcome productivity and labor challenges — from this panel presentation.
Skilled labor shortages increase costs and timelines, resulting in lower quality work, more accidents, and missed objectives. Those shortages are increasing with a growing construction economy and aging industry.
Today, workplace safety is a mindset for most companies. But it wasn’t always that way. When owners declared safety to be a core value and business imperative, they established key contractor selection safety metrics. Construction sites became safer and zero safety incidents became achievable.
A standardized, institutionalized selection process for safety was the catalyst to change. Prequalifying contractors for safety performance avoided accidents, reduced the direct cost of each accident and lowered the costs of work disruptions, productivity losses, and workers’ compensation insurance.
Workforce development works the same way. When owners make workforce development a core value and business imperative, consistent and effective training programs will follow. Research from CII demonstrates an ROI of up to three dollars for every dollar invested in training (RT-231).
Safety and workforce development are related in more ways than one. Labor shortages cause an increase in safety incidents — and other key concerns — that is directly proportional to the severity of the shortage (RT-318). It’s time to take action. Owners are in a unique position to lead by making workforce development a priority, incentivizing good behavior, and preventing avoidable risk.