How to Build Health and Safety Costs Into Your Residential Construction Estimating Software
Apr 27, 2022 12:00:00 AM
If you work in the construction industry, you already know that health and safety regulations are strict and getting stricter all the time. That’s not unreasonable. While most on-site injuries for construction workers are slips and falls, the nature of the construction business means there is a high potential for more severe injuries. Making sure your people go home safe every day is a moral obligation, but there are also severe financial penalties and even potentially criminal prosecution for employers who don’t do enough to make that happen.
So, there’s no doubt that there are many reasons why you should comply with health and safety regulations – but how do you ensure you cover those costs? Here’s how you can build health and safety-related costs into your residential construction estimating software.
1. Stay Up to Date with Regulations
I wish we could tell you that health and safety was a one-and-done thing, but we all know that it’s basically a full-time job.
Regulations and recommendations change all the time, and there are federal, state and local laws to worry about. They also vary depending on the type of work you do.
So, if you don’t have a full-time health and safety person on your team, it’s a good idea to set aside some time every couple of months to make sure you’re still complying with all the regulations that apply to you.
2. Invest In Quality PPE
PPE, or personal protective equipment, is equipment and clothing that is used to keep workers safe on construction sites. This could be anything from steel-toed boots to hard hats, dust masks or work gloves.
Some of these items are usually bought by your employees, but there are probably some that you are supposed to supply.
Make sure that you keep records whenever you issue PPE to your workers and buy quality equipment that meets all the relevant quality standards and requirements. It costs a little more, but it will last longer, is legally compliant, and is a lot cheaper than paying medical bills or worker’s compensation when something happens!
3. Keep Detailed Records
Health and safety record keeping is a lot like insurance. It’s something you need, but you hope you never have to use it.
Your health and safety record keeping should include any training you provide to your team, when you issue safety equipment and what you provide, and what your health and safety policies are. You should also have records of vehicle and tool inspections, so you can prove that all of the equipment your people use is in good working order and safe to use.
In most cases, you won’t ever need to show these records to anyone.
However, if you have a serious injury or incident on a construction site, it might be very important in proving that you met your obligations.
Make sure that you keep track of the time you spend on health and safety management and record-keeping. This should also be accounted for in your health and safety costs.
3. Track Your OHS Spending
If you’ve never built any of your safety costs into your pricing, you might not have any records of what you’ve spent. So the first thing you need to do is calculate how much you spend on health and safety.
Go back through your accounting records for a period of six months to a year, and add up what you’ve spent on:
· First aid kits
· Health and safety and first aid training
· Personal protective equipment for your workers
· Medical bills for any injuries or incidents that did occur
· The cost to keep records and maintain your OHS program
· Any documents or record-keeping devices and apps you use to manage your health and safety
Any health and safety-related costs that you spend any time or money on should be included in this list.
4. Calculate Your Average Monthly Costs
Once you’ve gone back through your records to find and add any health and safety-related costs, you will have a total cost for the period you have calculated. Now you can divide that total by the number of months you have based the costs on, and this will give you your average monthly expenses.
Now consider if there are any changes you need to make to your health and safety practices and find out what those will cost you per month. This can be an estimate or an allowance if you’re not sure. The beauty of using the best remodeling estimating software or construction estimating package is that you can change and adjust labour allowances when you need to.
Of course, your cost is not the same as the amount you pass on to your customers, so this is a good time to add your usual labor and overhead markup onto your base costs. The amount you’re left with is what
your company needs to add for health and safety compliance every month, but the job of adding it to your residential construction estimating software is not done yet.
5. Calculate the Cost Per Crew
If you’re like most construction companies or contractors, you probably have more than one crew that works on your various job sites.
So once you have a monthly health and safety cost, the next thing you need to do is divide that amount by the number of crews you’re running to give you a rate per crew.
If some of your crews require more or less health and safety gear and training, you can adjust this amount proportionately, as long as the total for all your crews covers your monthly costs and assuming that all of your crews work every day.
6. Get a Cost Per Hour
The final step in the process of adding health and safety costs into your residential construction estimating software is to calculate the cost per hour for each kind of work or work crew.
Now that you have a cost per crew per month, this is a simple matter. The average month has 22 working days, and if you base your rates on that, that means that you simply need to divide the monthly rate by 176 hours per month, and you will get the hourly health and safety cost allowance per crew.
You might be surprised at how little this figure actually is. When you look at your health and safety compliance costs as a lump sum, they might seem high. But when you break them down per crew hour, they’re not that high for most residential construction companies.
Now all you have to do is add your health and safety costs to the rate you’re charging for direct labor and overheads, and you can be sure that your costs are covered.
Residential Construction Estimating Software Makes Estimating Easier
One of the reasons so many contractors find that residential construction estimating software or remodeling estimating software makes their lives so much easier is that you only have to do calculations like these once. You can also adjust the rates you charge by a few dollars (or more) any time you need to, and your quotes will automatically use the new rates.
CostCertified worked hard to build the best remodeling estimating software out there, and we’ve made it so easy to create unit rate and assembly pricing libraries. So quotes that used to take you hours can now be done in minutes – even if you offer your clients options and upgrades.
Our software makes it easy to build time-related labour and overhead costs into every quote, and if you calculate your health and safety costs like this, you can build them in and pass them on too.
So health and safety doesn’t need to be a grudge purchase. It’s just another thing your company needs to deliver the great products, services and results your company is known for in your industry.
CostCertified makes estimating easy and delivers the best quote experience for your clients. So book a call here and find out how we can help you too!