How to increase profits without hiring new staff members

Hiring new staff feels like part of the natural progression for a business with growth aspirations. But what’s sometimes forgotten is how expensive it can be to bring in new people. 

The total costs of hiring a new employee – when soft costs such as time invested in training are considered – can end up being three to four times the position’s annual salary, according to research from workplace advocate the Society for Human Resource Management.

And it’s not the only way to improve the bottom line. Steel fabrication businesses that want to increase profits can make just as much progress investing in systems, technologies and processes that increase efficiency, reduce errors and improve planning, rather than hiring purely for the sake of it. 

Embrace advanced technology 

Digital transformation in the construction sector leads to productivity gains of 14 to 15 per cent and cost reduction of 4 to 6 per cent, according to research from McKinsey Global Institute. New technologies continue to redefine the construction process, providing steel fabrication businesses with streamlined operations and more profitable ways of working. 

Model-based software such as Tekla Powerfab provide a good example of how advanced technology can reduce errors and the time spent on rework.

Much of this has to do with accuracy. Designed specifically for the steel fabrication industry, Tekla Powerfab offers users real-time data and advanced modelling, improving estimates, project management, production and inventory control. 

When technology streamlines these processes, errors previously caused by miscommunication or information silos are nipped in the bud. Staff spend less time correcting errors and more time on activities that generate value. 

This need for organization and traceability was part of the reason why Bennett Steel, a steel fabrication business located in Northeast Oklahoma, turned to Tekla Powerfab. Production manager Jeremy Dittman says the advanced technology has brought a host of benefits. 

“It’s easy for anyone on our team to quickly view and understand a change order without the need to check with someone else,” Dittman says. 

“By keeping all relevant project information in one central location, we eliminate inquiries and information flows freely to everyone involved.”

Optimize workflows and processes

Construction businesses lose almost two full working days in productivity every week in time spent solving avoidable issues, according to research from industry publication Digital Builder, and these bottlenecks can be just as damaging to a project’s bottom line. 

The solution is to optimize workflow and processes, especially for steel fabrication businesses with antiquated, inefficient methods of sharing information and managing projects. 

Automation plays a role by removing menial, repetitive tasks. This process comes with the added bonus of automated tasks being much easier to track, document and report on, giving businesses a chance to evaluate results and improve. Manual tasks, on the other hand, are often subject to human error and can be more challenging to track. 

Automation optimizes workflow and processes so employees are not spending time on dull, repetitive, tedious work that is prone to errors. This could mean that rather than hiring a new employee, a business could direct an existing one to a task more likely to push the needle. 

Enhance planning efficiency 

By nature, planning in the steel fabrication industry is a complicated process, requiring precision analysis and a significant investment in time. The planning phases become even more complicated when the goalposts change, an error is picked up or new stakeholders are introduced.  

To make the right decision for a project, planners typically need:

• accurate data

• reliable status updates

• the ability to make changes

Advanced technology, such as Trimble’s production planning software, offers planners the tools to access the data required to make the right decision, understand the progress of a project and minimize errors that would typically result in hours wasted on rework.

As Dittman notes, this means if changes do occur, it isn’t the end of the world. 

“It’s easy for anyone on our team to quickly view and understand a change order without the need to check with someone else,” he says. “By keeping all relevant project information in one central location, we eliminate inquiries and information flows freely to everyone involved.”

Invest in training and development

Hiring new staff as a default solution to solving the productivity woes of a steel fabrication business also risks missing the opportunity from existing employees. 

Investing in training and development of existing employees can be 73 per cent less expensive than bringing new staff on, according to research from the Mechanical Contractors Association of America. The beauty of modern platforms such as Trimble Tekla is how easy they have made the development of existing staff through ongoing training and support. 

After struggling with previous software, the team at Bennett Steel was relieved to discover how easy the Tekla platform was to implement. 

“Tekla PowerFab didn’t come with the big learning curve you might expect,” said Bennett. “It was intuitive and simple. After a week-long implementation, everyone understood how to use it in their individual roles and was ready to get started.”

Leverage structural analysis and design 

Another area where investment in technology and process, rather than people, comes to the fore is structural analysis and design. The automation of this high-level analysis frees engineers up to focus on other concerns, such as safety, profitability and sustainability. 

Automation provided by platforms such as Trimble Tekla’s structural analysis and design tools delivers a host of benefits through detailed insights and accurate simulations, including:

• the ability to automate a rationalized design in seconds and share meaningful reports, schedules, and drawings with project partners in minutes

• better data sharing and situational analysis

• automatic model comparison to make changes easier to manage.

Pathway to profits 

Hiring new employees is sometimes necessary, but it isn’t the only way to increase profits. 

In many cases, it can be far more effective to invest in technologies and processes that lead to smarter, more effective ways of working.