Analytics & Dashboarding

Guide to Productivity-Based Compensation in Construction

Guide to Productivity-Based Compensation in Construction

As technology has improved the productivity of construction contractors, it has also contributed to the disparity between the top producers and those at the bottom of the production ladder.

In every team, there are usually several employees who seem to have a natural ability to work more effectively and produce more with their time.

Under traditional compensation models, the top producers frequently express their frustration at carrying the brunt of the weight but still earning pay equivalent to the least productive team members.

This is where a properly implemented productivity-based compensation (PBC) program can reward top-performing employees, encourage smarter work, and guide team members towards a more entrepreneurial style of operating.

What is Productivity-Based Compensation?

With the advent of a highly modernized and tech-savvy construction industry, contractors have a new challenge in balancing the relationship between innovation, safety, team morale, and profitability.

Productivity-based compensation (or Results-based compensation, Piece-work, Pay-for-performance, etc.) is an alternative to traditional compensation (hourly or salary).

It uses performance analytics, department scores, and project reports to determine payouts for completed work.

In other words, the business only pays based on what has already been accomplished, and how well it was accomplished.

Productivity Based Compensation Contractor Websites

Many owners are looking for key strategies to keep their company on the top of their game, and productivity-based incentives are one of the best ways to maximize your company’s success. 

Rewarding employees on a performance basis is a proven way to motivate them to continue performing at their best. Yet, it’s important to incentivize them in ways that are meaningful, safe, and make sense for the company’s long-term goals.

How Productivity-Based Compensation Works

The traditional compensation system of salaries and hourly rates has resulted in the construction industry rewarding time spent on work over effectively producing work.

This doesn’t match the compensation structure of the business, where productivity, quality, and safety performance are the most critical in ensuring project profitability.

If a contractor performs well, they thrive financially.

If they perform poorly, they earn less profit or record a net loss on the project.

PBC aligns the employee’s compensation structure and incentives with the employers, and improves employee performance.

Profit sharing KPI Contractor Websites


How to Implement Productivity-Based Compensation

New pay structure systems can be met with resistance, especially from long-term employees who are used to receiving pay increases based on years of service.

This can be challenging to overcome, but in most cases, it provides an incentive for top-performing employees to take more ownership of their projects, excel at their craft, and increase their earnings.

PBC must be a win-win situation for the employer and employee, and you need to put yourself in your employee’s shoes (or work boots) and empathize with how they approach their work.

Focusing only on productivity, instead of looking at the plan holistically, is the first and most common mistake. You need to look at the entire cycle of your employee’s involvement in a project or product. From designing, crafting, to finishing, and from their first day on site, how they interact with the client and other trades, to their last day on site.

Building a system that encourages employees to consider the company’s long-term goals and values, while giving your employees the chance to take advantage of their abilities and earn more income as a reward for their refined skillset and quality output, is the ultimate goal of the implementation.

Companies Successfully Using Different Types of Creative Incentive Plans

Type of IncentivePercent of Companies Reporting Success
Skills-based compensation89%
Earned time off85%
Gain-sharing plans81%
Small-group incentives75%
Individual incentives73%
All-salaried workforce67%
Lump-sum bonus66%

Rice University, OpenStax


PBC has been shown to promote efficiency as well as quality, as the employee is held responsible for a properly completed task as a condition of their bonus pay.

Pros and Cons for Employers

  • Increased productivity

    By nature of this compensation system, employees who contribute more to the company and team are paid more, encouraging higher productivity.

  • It reveals opportunities for improvement

    PBC affords businesses the insight to find the areas of their business that needs to be improved. First, identify the low performers, and then analyze why they're performing below expectations. This process will discover areas in your business that need improvements, such as inventory control, shipping, estimating, and just about every other aspect of the business.

  • Increased employee retention and overall workplace morale

    High-performers want to understand what's expected of them, and understanding how they can achieve or surpass those expectations to earn higher pay incentivizes them to stay.

  • Attractive to high-performers and improves hiring quality

    The HR team should analyze the qualities of your high-performers and then identify those traits in hiring candidates to build the ideal team.

  • Company revenue & employee compensation alignment

    In companies without a PBC plan, employees may have trouble understanding what leads to a raise. Linking compensation and performance will provide clarity and a clear path towards career advancement.

  • Entrepreneurial mindset adoption

    Employees compensated on a PBC model gain the power to increase their wages by rethinking their approach to the work. They may conceive of a better execution plan than the one provided by management and will help deliver the project faster and more profitably.

  • Defective incentives with unintended outcomes

    Poorly thought-out incentives can lead to secondary outcomes that are undesirable (see Perverse Incentives in the Best Practices section below). Businesses must be aware of the consequences of incentivization and how employees will react to different measurements.

  • Internal resource constraints

    Operating on a PBC plan definitely adds stress to the business operations if incentives, departments, or managers are not aligned, which may cause friction between crews and/or departments. It can negatively affect collaboration and teamwork, as PBC tends to focus on an individual’s or crew’s achievements over the team's wellbeing.

  • Difficult to reverse

    Once a team has adjusted to the PBC plan and is seeing the benefits it provides, it can be difficult to revert back if it’s not working. If you find another compensation structure that would work better, you will face resistance and may even lose some of your highest performers.

Pros and Cons for Employees

  • Higher compensation

    Employees that are highly skilled, effective, and that work well in a competitive environment will thrive, and likely be the highest-paid people in their trade.

  • Task focus instead of time focus leads to better engagement

    When you provide employees with the objectives they need to meet to receive compensation, they have a much clearer idea of your expectations. It also shifts their mindset from “How much time is there left in the workday?” to “How many more sheets/walls/widgets until I’m done?”

  • Adds flexibility

    Employees that are evaluated on their results and performance are allowed more flexibility in their workday. You won’t need to focus on how many hours they work, how long their breaks were, or what time they got to the site. As long as they operate safely, deliver a quality product/project, and have a happy client, they have autonomy in their day.

  • It may demotivate lower-performing workers

    Not all people are meant to work on a performance-based compensation plan. Some employees may be demotivated by the success and results of the higher-performers. This isn’t necessarily a bad thing. You want the best employees on your team, but not all performance is measured the same. Some low-production workers may have brilliant design skills, or are able to communicate effectively with a client.

  • It can create tension among co-workers

    Some crews may be jealous of the rewards and compensation of the high-performers. This can create difficult situations where bonuses can create resentment between crews, where low-performers feel pressured to operate at a level that they aren’t capable of.

9 Best Practices in Productivity-Based Compensation

1. Define a set of standards by which the work must be delivered.

PBC encourages efficiency, so the crew may cut corners to expedite the work. Therefore you need a set of standards by which you will accept a finished project or product. You will need modifiers for things like client satisfaction, internal team satisfaction (Did the shop foreman feel respected? Was all documentation to payroll submitted on time?), and you will need non-negotiables that will wipe out any performance bonus entirely, such as missing safety documentation, negligent actions, and mistreatment of other employees.



2. Start small with a pilot crew and experiment with different variables.

By starting small, you can test the new program to get data on important metrics, incentive flaws, and that compensation is fair to all employees.
Some companies only incentivize the foreman of the team/crew and let them decide how the rewards should be distributed. Greedy foremen rarely last for long, and the generous ones garner the respect and admiration of their crew.
Other companies may pay out a percentage of profits to the whole crew, relative to their hourly wage, based on project performance.

Not every employee will view higher pay or performance bonuses as the ultimate reward. The company needs to recognize what drives engagement and productivity in its top performers and experiment with their system and rewards.

Productivity Tracking Contractor Websites

3. Make it fun.

If you want to implement PBC in order to motivate your teams, it helps to make it fun and exciting. Put up leaderboards that track performance, client satisfaction, safety ratings, quality ratings, and other metrics you find important to share.
(Tip: Read the Great Game of Business)
Include non-monetary rewards, such as lunches and dinners on the companies dime, or gifts and gadgets (e.g. a tablet, smartwatch, headphones, gift cards, sports tickets) that you display in the office that are awarded based on certain criteria. Ask for prize recommendations and requests. This gets employees excited and gives them something to work towards.



4. Include your team from the start.

Building an effective PBC model relies on both the employee’s and the employer’s ability to agree on what good performance looks like. When your employees are involved in the planning of the model, their ability to understand and adopt the model increases greatly.
Your employees are also the best source of knowledge on how to effectively measure good performance.



5. Think of best and worst-case scenarios.

Planning for extreme events, however unlikely, is critical to maintaining the plan during stressful events. Having a pre-defined process for dealing with extremes will prevent rash decisions from damaging your relationship with your employees.
For example, ask yourself the following questions:

If we severely underbid a project, how do we rectify that with the employees to ensure they are fairly compensated?

How do we compensate employees that resign/quit/are laid off before completion of a project?

In the event of an accident or safety infraction, how do we determine negligence? How does it affect their pay-outs?

On the bright side, your employees have the chance to become the highest-paid tradespeople in the country and feel more engaged in their work.
What does extreme success look like for you and your employees?
If one of your employees knocks it out of the park and is making +$100/hr, is that fair and equitable? If not, why not?
Figure out if it’s because of your existing beliefs about compensation, or if it’s a miscalculation in your system.

Trades for PBC Contractor Websites

6. Consider second and third-order consequences.

Familiarize yourself with the concept of Perverse Incentives.

A perverse incentive is an incentive that has unintended and undesirable results that is often opposite to the intentions of its designers.

A famous example is the “Cobra Effect”:
The term “cobra effect” was an anecdote of perverse incentives in India during British rule.
The British government offered a bounty for dead cobras. Initially, this was a very successful strategy as large numbers of snakes were killed for the reward.
However, enterprising people began to breed cobras for income.
When the government became aware of this opposite effect, the reward program was scrapped, and then the wild cobra population exploded when cobra breeders set their now-worthless snakes free.

Work to understand the cause-effect relationships of your decisions to the point where you can create decision-making rules in the form of “if/then” statements.
I.e. if X happens, then Y will happen.
Chaos increases the further you move from the first-order consequence. The more knowledgeable you are of a system will allow you to predict further down the chain of events.

Simple examples:
“If we solely incentivize productivity, then safety, quality, and documentation will deteriorate.
If safety, quality, and documentation deteriorate, then our reputation will suffer.
If our reputation suffers, we will lose work.
What can we implement to counter these effects?”



7. Make the system transparent.

Visibility into the payment structure should be readily available and easily interpreted.
Every employee should be able to see how their performance on a project affected their earnings, what modifiers were applied, and how they could have performed better.

The Expectancy Theory states that employees exert effort comparable to the reward they expect to achieve.
Accordingly, managing time to maximize productivity without a correlating increase in compensation can reduce employees’ motivation and job satisfaction.
Expectancy Theory states that employees will think of time-management improvements and boost their output to the extent that their compensation will increase as a result.



8. Keep it simple.

Most work can be classified into one of two categories:

Quantitative Performance: This is where productivity tracking is applied to observe metrics such as pieces installed per hour, square feet of drywall installed, paint hours, repair orders completed, etc.

Qualitative Performance: These are more intangible measurements that are difficult to nail down an exact measurement system for, but it’s not impossible. These metrics include customer satisfaction, employee satisfaction, job quality reviews, and department-to-department reviews to ensure collaboration.

Identify key metrics for each position under the PBC plan and categorize them accordingly. Ensure you have counter-metrics that prevent a key metric from being abused.
E.g. if you’re tracking productivity, you need to track safety, quality, customer satisfaction, and team satisfaction.



9. Err on the side of over-compensating your employees.

It’s absolutely imperative to hire and keep the best employees possible, so don’t scare them away by being too demanding of their results. You should base your productivity metrics on the LOWEST performing crew, and build from there.
Never make changes to the plan without consulting the crews (or leaders of the crews e.g. foremen).
Most companies pay as little as they can get away with paying, but this results in employees who will do the bare minimum, and this ultimately cripples performance and damages the long-term prospects of the company.




PBC aligns the employee with the employer in terms of objectives, as a skilled, motivated employee can thrive financially under a PBC system and only gets bonuses if their project is successful, which in turn makes the project successful for the company.
Also, it takes the mystery out of running a contracting business, as you know exactly how much profit each project will net.

Some would argue that the burden of program administration may overwhelm the benefits, but that depends on your metric collection system. The estimating department provides the data needed to calculate how much can be earned from a project, and the estimating department should also have a feedback loop that gathers post-project productivity metrics, which can then be supplied to management/payroll for disbursement.
This productivity tracking will in turn provide better resources for your estimating department to bid on projects.

As an employer, you have to be vigilant of the hazard that employees may excessively prioritize quantity over quality, so you have to implement a rigorous QA process and have a way to subtract compensation from an employee delivering low-quality results, presenting safety issues, or getting complaints from stakeholders.

Every company is different, and you can’t apply a cookie cutter to compensation. Instead, owners and managers need to create a compensation system that pays employees based on their overall performance and results that are specifically tailored to their business, their culture, and their industry.

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Analytics & Dashboarding

Essential KPIs for Construction Sales & Estimating Dashboards

Analytics & Dashboarding

kpi dashboard for construction companies

Benefits of a KPI (Key Performance Indicator) Dashboard

Project dashboards make project management and estimating easier and more efficient by showing continuous performance data at a glance.

When employees and managers have access to their project’s data displayed in a visual element, they gain:

  • Greater insights into their projects
  • Increased efficiency and productivity
  • Improved estimating accuracy
  • Better communication among team members
  • Continuous feedback on their performance
  • Real-time information for better decision-making

A dashboard is beneficial for everyone on the team. It keeps team members engaged, managers informed, and C-suites aware of what types of business decisions to expect.

With the right dashboard, everyone is on the same page and understands what needs to be done across the team to ensure project success.

kpi dashboard construction

How to choose your KPI’s

To build a useful sales and estimating dashboard that your team will use, you need to focus on your audience and think about the KPI’s that are relevant to them.

Ask yourself the following questions before you start building the dashboard:

  • Who is your audience?
  • Who will be consuming this dashboard?
  • Is this dashboard for a salesperson, a manager, or an estimator?
  • What actions do I want the dashboard to encourage?

Knowing exactly who is your target audience allows you to focus on the KPI’s that are most important to them.

Design your dashboard with a specific purpose in mind. If you try to cram as much data in the dashboard as possible, it will end up crowded and convoluted, which leads to confusion and miscommunication.
If you have more visuals of valuable data that you would like to display, consider creating a second dashboard that allows you to deep-dive into the data.

Having a comprehensive data platform like SalesforceHubSpot, or Tableau allows you to create dashboards that serve all of your departments in a scalable way. Anyone in your organization can subscribe to a Salesforce, HubSpot, or Tableau dashboard as well as create recurring alerts based on conditions they set. 

Project dashboards should be able to report on estimating and sales KPI’s such as Earned Labour Hours, Qualified Bids, Win Rate by Project Type, and many other useful metrics.

Some KPI categories that you can include on your dashboard include:

Project Activities e.g.:

  • Number and Value of Bids In Pipeline
  • Bids Currently Processing
  • Bids Submitted
  • RFI’s Submitted

Time Spent & Durations e.g.:

  • Average Time To Bid Submission From Lead Acquisition
  • Average Time Per Bid Submission
  • Average Time From Bid Submission To Award

Milestones & Targets e.g.:

  • Win Rate, by number of deals and value.
  • Bid Value Submitted
  • Bid Value Won / Lost

Resource Allocation e.g.:

  • Assigned Tasks
  • Bids In Review
  • Bids In Queue

Choosing the right visuals for your KPI’s

Strong visuals are hard to ignore. The key to a great dashboard is knowing which visuals to highlight, how to display them, and how to allow the user to move seamlessly through the dashboard.
Data that can be hard to grasp when presented in a table format can be easily interpreted by adding the right graphs and charts. Trends and movements can be highlighted by using colours and icons such as arrows.

It’s not enough to have the right visuals though. The elements of the dashboard need to be arranged in the right order so the question prompted by the first element is answered by the second element, and so forth down the chain of questions.

A dashboard that tracks data that no one is interested in, or that doesn’t provide a useful recommended action, is a dashboard that people won’t use.

A useful dashboard can be described as: Displaying the right metrics, for the right person, at the right time.

construction kpis

What’s the difference between a KPI report and a KPI dashboard?

The old method of using reports has several drawbacks. It requires labour to produce, it only provides a snapshot in time, which means the information is outdated by the time the receiver interprets the information, and it keeps information hidden from the producers of that information.
It is telling you how your team WAS performing, not how they ARE performing.

In large companies, reports can be behind by several weeks, depending on how many manual data inputs are required to assemble the report. This can lead to inaccurate, delayed, and inadequate decisions being made.

Meanwhile, project dashboards provide a real-time source of information displayed in a digestible way. This leads to less time wasted producing reports, faster decision-making, and more time dedicated to winning projects.

construction kpi dashboard

4 things to consider when you are choosing your Dashboard KPI’s

The Dashboard’s Purpose

The dashboard planning process is crucial to creating a useful tool for your team. This is where you need to think about its functionality, intended objectives, and hazards. (Yes, there are hazards associated with dashboards and encouraging the wrong behaviour.)

The most important step is achieving consensus within the team or department on what the most critical KPI’s are and how they should be tracked.

KPI’s are binary. They are either met, or they are not. Establishing what the criteria are for a completed KPI should be done before going live with the dashboard.

Every KPI encourages a certain type of behaviour. It is generally accepted that valuing the profitability KPI the highest can lead to disastrous behaviour within the organization that damages relationships long-term and may even put you in a problematic legal situation.
This is why you need a counter-balance KPI for metrics that may steer team members away from company values.
For example, if you have a KPI for profitability, you may want to include a KPI for Customer Satisfaction (e.g. Net Promoter Score) to balance the behaviour produced by the KPI’s.

Essentially, your project dashboard should be relevant to the user, encourage healthy and honest behaviour, and provide continuous feedback on performance.

Your Existing Data

Project dashboards depend on data. Clean, unadulterated data, and lots of it.

Start by cataloging all your data sources.

  • What data are your teams currently producing?
  • What data are your current systems (ERP, Estimating software, CRM’s, etc.) currently producing?
  • What formats are produced when exported?
  • Can you upload the exported data straight into the dashboard software?

Next, make a list of the KPI’s that are measurable with the data that you are currently producing.

These KPI’s should be agreed upon by the team before launching the dashboard. Consensus and unanimity are essential for getting the team to adopt the dashboard into their daily routine and provide valuable feedback.

Your Future Data

Building a dashboard produces a lot of useful questions.

“What would we find out if we added this metric to the dashboard and crossed it with our labour hours?”

“What would we learn if we compared suppliers across projects to find which trades worked most efficiently with a suppliers products?”

Understanding the backbones of your dashboard will help you build additional data sets in the future. Having your data export setup to produce a common format such as XLSX or CSV allows you more flexibility when merging data sets and looking for new insights.

The Actions The Dashboard Will Produce

Try to predict the actions that your team members will take after viewing the dashboard. Understanding the analytical, emotional, and procedural actions a team member will take allows you to build a dashboard that people love having around, and will provide continuous feedback on how to improve.

Some organizations like to encourage some friendly competition by including a leaderboard and win rates, and then rewarding the winners at monthly/quarterly/annual intervals. This can be great if you have a team of “aggressive” high-performers that already have a strong social bond, but putting this on a dashboard for a team that isn’t as tight-knit or competitive will just breed resentment for management for trying to pit people against each other.

Analytics isn’t all cold logic and calculated reasoning. KPI’s will need to be tailored to the culture of your team.

Now, on to the list of our essential KPI’s!

List of Essential Construction Dashboard KPIs

  • Earned Labour Hours – Bid vs Actual
    • Earned Labour Hours = Bid Labour Hours – Actual Labour Hours
    • This is a “quick and dirty” way of seeing how your estimating data actually matches field performance.
  • Value Added – Bid vs Actual
    • Value Added = Project Bid Value – Project Actual Cost
    • A critical overview of project performance. This would be a high-level element that can be interacted with to deep-dive into the actual costs and revenues of a specific project.

Construction Sales Estimating KPIs Construction Contractor Websites 1 We create high-performing websites for the construction industry.

  • Projects bid vs won by Project Type
    • Categorize projects by type (e.g. Commercial Retail Unit, Tenant Improvements, Warehouses, etc.).
    • Projects Won By Type = Total Project Type Bids Won / Total Project Type Bids
    • Understanding which projects your team excels at, in both estimating and field performance, allows you to strategize on which bids to accept, which markets to focus on, and where your estimating data needs to be improved.
  • Projects bid vs won by Client
    • Projects Won By Client = Total Client Bids Won / Total Client Bids
    • It’s important to know how often you’re being price-checked. Smaller teams will know this intuitively, but when submitting bids at a larger scale the intuition can disappear.
    • Another useful metric is tracking the dollar amount of projects bid/won. This lets you know if you are losing projects in a specific cost range.

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  • Qualified Bids
    • Qualified Bids = Accepted Bids + Qualified Declined Bids
    • Not all declined bids are the same. This can be detailed further by adding reasons for declining. Knowing the value of bids declined due to insufficient resources is important for planning expansion and preparing for growth.
  • Projects Lost by Reason
    • Categorize lost reasons (e.g. Price Too High, Strong Competitor Relationship, Bid Disqualified, etc.)
    • Understanding why a project is lost is the only redeeming factor in losing a project you wanted to win.
  • Value of Projects Lost by Reason
    • Are we losing projects mainly because our pricing is too high, or because or client lost the bid and we didn’t bid to their competitors? Are our bids being disqualified due to errors in our bidding process?

Contractor Websites Construction Dashboard Sales Insights 6 We create high-performing websites for the construction industry.

  • Profit margin by project type
    • In some cases, the profit margin is improved by stellar field performance, but sometimes it’s because the project was overbid but awarded anyway.
    • Using this metric along with “Projects Bid vs Won by Project Type” and “Projects Lost by Reason” allows you to understand the full story behind the profit margin. For example:
      • Your Weighted Win Rate is 25%
      • On CRU’s it’s only 5%
      • Your average profit margin is 13%
      • On the CRU’s you win, your profit margin is 28%
      • Conclusion: Something in your CRU estimating data is inaccurate
  • Estimators profitability by project type
    • Tracking individual estimator profit margin is useful to see which estimators excel at certain projects, and that will let you set up the right mentee-mentor relationships to improve the strength of your estimating team.
  • Estimators win-rate by project type
    • Same as above. Some estimators excel at certain projects, and if you’re a manager, that lets you allocate the right people to the right projects.
  • Bids currently in development
    • How many bids are currently being worked on will give you an idea of how much capacity your team has to take on additional projects, or if more resources are required.
  • Number of issues and mistakes found in bid documents upon review
    • Having a visual of the results of your bid review and QC process allows you to make changes in your estimating process to reduce mistakes and miscalculations.
Sales (and some marketing)
  • Activities
    • While I don’t recommend putting too much credence to this metric (results > actions taken), the number of sales activities per rep in a set timeframe can give you a signal of their productivity level. Some common metrics include:
      • Number of calls
      • Number of emails
      • Meetings scheduled
  • Number of Active Leads and Prospects
    • Maintaining a consistent amount of leads, in both quantity and value, is important for forecasting and maintaining good cash flow.
  • Current Market Capture
    • Current Market Capture = Qualified Bids / Accepted Bids
    • This is a quick way of estimating market share in your category.

We create high-performing websites for the construction industry.

  • Average Project Profit Margin
    • Average Project Profit Margin = Cost of Goods Sold / Revenues
    • Overall, how your estimating efforts are translating to field productivity.
  • Average Cost per Lead
    • Average Cost per Lead = Marketing Expenses / Qualified Leads
  • Customer Lifetime Value
    • Customer Lifetime Value = Average Value of Sale × Number of Transactions × Retention Time Period
    • This one takes a bit of work. You need to have some data already in place that is not readily available from your ERP or accounting department.
  • Qualified Lead Conversion Rate
    • Qualified Lead Conversion Rate = Qualified Leads Converted / Total Qualified Leads
  • Qualified Leads by Source
    • Categorize Lead Sources (e.g. Referral, Conferences, Word of Mouth, Directories, etc.)
  • Revenue by Lead Source
    • Use this metric to dial in on which marketing channel provides the highest return.
  • Opportunity-to-Win Ratio (By Number of Bids & Dollar value)
    • Opportunity-to-Win Ratio = Projects/Dollars Bid / Projects/Dollars Won

We create high-performing websites for the construction industry.

  • Average Deal Size
    • Average Deal Size = Total Dollar Amount Awarded / Total Projects Awarded
    • It’s important to know if the projects you are taking on are increasing or decreasing in size, and being able to predict changes in project size throughout the local seasons and economic cycles.
  • Sales Cycle Length
    • Some salespeople will have faster sales cycles than others. Analyze which cycles produce the highest number of winning proposals and figure out what they do differently. A faster cycle isn’t necessarily better. A salesperson may close deals faster than anyone else, but their customers may be dissatisfied in the long term due to missing details or pressure tactics. Sometimes a long cycle is a healthy cycle.
  • Customer Satisfaction
    • There are several ways of measuring your clients’ satisfaction with your services and their perception of your performance. (Net Promoter Score, Customer Effort Score, Customer Service Satisfaction, etc.)
      Start simple and scale up the survey as needed. Make it easy for your clients to complete.

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I hope you find this list of KPIs useful. I am looking forward to hearing your comments and opinions on building your KPI and dashboard process.
Can you find any other interesting metrics that should be considered for measuring estimating and sales performance?

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Construction Projects Analytics & Dashboarding

Guide to Construction Estimating & Takeoff Software

Analytics & Dashboarding

The construction estimating process is critical to the success of every project.
Modeling the costs and productivity requirements of a construction project requires contractors to create detailed cost estimates, project and delivery schedules, and construction plans.

Many software firms have attempted to create a seamless estimating experience and provide the tools to create a comprehensive estimating and takeoff process. This guide will cover the options that are available to contractors to allow quick, precise, and accurate cost & delivery estimates for their projects.

Let’s start with a brief review of the overall construction estimating, takeoff, and bidding process.

If you’re an estimating professional, and you just want to see our recommendations, click here.

Understanding Construction Estimating for Contractors

Construction estimating is part of the bid process, during which contractors and builders will typically compile a group of documents, known as the bid package, which summarizes the project details and key information. These bids aggregate the costs that the contractor expects to pay for the sourcing of materials and construction of the project.

The process begins with the project owner creating the bid package.

The bid package contains all of the information the contractors will need to create an accurate cost estimate, schedule, and delivery method.

The documents included in the bid package typically include the Invitation For Bid (IFB), project blueprints, location and schedule constraints, detailed specifications of the contract, which include general standards, contract terms, insurance requirements, and other information about the bid and contract.

Traditional Bidding Process


A takeoff (sometimes referred to as material takeoff or quantity takeoff) is the first step in the bidding process. This step involves examining the blueprints and bid documents in order to extract the required materials and labor required for the project.

The information produced from the takeoff is what is used to build the cost estimate and project schedule.

For a General Contractor, some examples of takeoff items may include:

  • Unit counts: E.g. Counts of light fixtures, concrete barriers, pipe fittings, doors, beams, trusses, etc. Anything that needs to be calculated in unit quantities.
  • Linear length: E.g. Total lengths of cable, lumber, wiring, trim, rebar, piping, etc. Anything that needs to be calculated in lengths.
  • Surface area: E.g. Counts of areas that require painting, drywall, roofing materials. Anything that needs to be calculated by its length times its width.
  • Cubic volume: E.g. Concrete pours, earthworks, insulation, asphalt, etc. Anything that needs to be calculated by length times width times height.
  • Physical weight: E.g. Gravel, sand, shipping requirements, waste disposal, etc. Weight calculations are often a byproduct of other takeoffs, and are useful when planning transportation and logistics.

Once a takeoff has been completed, we compile the data to create the cost estimates required for materials, labour, and supplies.

The process typically follows this schedule:

  1. Review Project Scope and Requirements
  2. Create a project schedule with deadlines and milestones.
  3. Identify in-house work and work that needs to be subcontracted.
  4. Determine labour and material costs.
  5. Include risk factors, contingencies, and profit margins.
  6. List project inclusions and exclusions.
  7. Submit bid to Business Development or to the client.

There are several tools available to estimators to help them build their cost estimate.

  • Estimating & Takeoff software – Manual takeoffs are resource-intense and prone to error. software creates a seamless process from takeoff to bid, with minimal chance for human error and several integrated checks and balances to ensure you have completed the takeoff and estimate accurately. 
  • Subcontractor database – It’s critical to have a good network of subcontractors that you can rely on for expertise and cost estimates. Some companies that provide takeoff software also provide a database of material pricing and general costs associated with a construction project, which can provide a helpful overview into the cost of the project before going out to source local pricing.
  • Pre-built estimate templates – Pre-built templates are critical to efficient takeoff and estimating processes, and they help you capture details that the IFB may have missed. Most estimating software providers have multiple pre-built templates for GC’s and larger sub-trades.
  • Item specifications – Many software suites will allow you to store item specs and useful data about materials and components. The information may include things like cost to purchase, cost to install, ANSI specifications, and local distributors.

The most common way of bidding is to prepare a hard bid (AKA competitive bid, hard dollar, fixed price, and others).

The GC sources material and subcontractor pricing, and then adds costs for their own supervision, site requirements (such as offices, sanitary facilities, dumpsters), contingencies, and profit.

Contractors with the most competitive bid, along with the best strategy and history/reputation, will likely earn the work. In the case of public projects (owned by government), the contractor with the most competitive bid is required to be awarded the project by law, provided their bid fully meets the requirements of the project.

Software Tools for Estimating & Takeoff Automation

Takeoff and estimating software refers to programs that help estimators extract useful material data from blueprints and IFB files. Some software will assist with generating material cost and labour estimates.

Typically, the software will support most file types for blueprints, such as PDF, DWG, SVG, DXF, XLSX, PNG, and other types of files.

With the suite of tools offered by the software, estimators can measure, calculate, and compile information quickly with fewer errors.

Features & Functionality
  • Tools for Counts, Areas, Lengths, and Volumes – The essential utility of takeoff software is the ability to extract materials, quantities, and requirements from digital files supplied by the project owner.
  • Collaborative & Team Takeoff – Having your takeoffs and estimates synchronized to allow for collaborative work is crucial for a large team where conflicting edits may happen. Most cloud-based services offer collaborative takeoff features.
  • RFI Creation & Management– In the event that insufficient information has been supplied or there are conflicting requirements in the project, an RFI will need to be issued to rectify the conflict. Some programs allow you to create, store, and compare RFI’s in a useful layout and dashboard.
  •  Activity Tracking – Knowing who did what on which bid is critical to a good estimating management process.
  •  Audit Trail – An audit trail is a step-by-step record which provides evidence of the history of document changes to its source and is useful to see who made changes to a document.
  •  BIM – Some advanced estimating software suites include BIM (Building Information Modelling). The purpose of BIM is to provide both a high-level overview of the project, as well as critical details, to ensure that the right information is included in the estimate.
  •  Cost Database – Most estimating software allows you to import your database of supplier costs, which is critical in building an accurate estimate that is suited for your local market.
  •  Customizable Reports – Management wants to see not only the results of a bid, but how you got there. You can build reports that compare similar projects, subcontractor pricing, typical amounts spent on previous projects vs current, and just about anything else you can imagine.
  •  Historical Database – Having a database of past projects that you can refer to and learn from is an estimating best practice, especially when you can compare estimated vs actual costs with the job cost report of the project you are comparing your current bid with.
  •  Project Templates – Pre-built project templates are useful when you are estimating projects that are similar to ones you have completed before. A 50,000 sq. ft. 3-storey CRU may have similar project requirements as a 60,000 sq. ft. 2-storey CRU, and you can save hours of work by reusing the template (with careful consideration of the project’s differences).
  •  Project Workflow & Schedule – Project scheduling is the process of listing tasks, milestones, critical path items, and subcontractor requirements with a planned start and finish date.
    Scheduling is often the most critical component of a project where you need to work closely with the operations team to ensure you are setting realistic deadlines and building optimal process flows. Proper scheduling ensures the project is completed on time and within budget.
  •  Projections & Forecasting – Estimating software helps you improve budgeting and forecasting estimates by aggregating cost requirements, benchmarking, and project forecasting.  Proposal Generation
  •  Subcontractor Management – During the bidding phase of a project, the GC needs to source a multitude of estimates from subcontractors. The more subcontractors and suppliers you involve in the process, the more risk and exposure the bid gets to failing specifications, inaccurate scope coverage, and inability to perform. Knowing which subcontractors are right for the project (not too large, not too small) is critical to the success of the project.
  •  Task Management Software – Historical task data can help you with process control and productivity when estimating new projects. When you have a reliable track record of successful estimates and bids, you can build new processes and analyze the historical information to help you create better estimates and more accurately predict resource requirements during the estimating process.
  •  What-if Analysis – A What-If analysis can be a time-consuming process of creating variations of the original project and analyzing the effects those variations have on the total project cost & construction time.
    What-If analysis replaces the painful process of learning by trial and error. If a predictable process or critical path breaks down during construction, the cost to fix, reorganize, or rebuild can carry additional costs and impact the schedule of the project. Using What-If analysis, you can create scenarios in which your operational team can quickly adjust to changes in the construction process or schedule, keeping the project within budget and scheduling requirements.
  •  Approval Process Control – Estimating software should allow you to customize and control the information each user can see and edit depending on their role in the organization. After the bid is completed, there should be an approval process that triggers it for review and submission to the client.
  •  Automated Quoting & Proposal Generation – Manual quoting processes are slow and inefficient in today’s world. Having a time-consuming quoting process scales poorly with your business, as the time it takes to produce winning bids is increased with each additional estimating hire. Using automation allows you to send out more bids in less time, keep track of incoming requests, and update data.
  •  Bid Management – Managing the different versions of your bids often includes making revisions to your takeoffs and estimates. Keeping track of changes and how they impact linked tasks helps you modify bids in an optimal way.
  •  Calendar Management – Everyone needs a calendar to track deadlines, milestones, and submission dates. The integrated bid calendar should show you which projects are due on what date, bid priority in the case of opportunities exceeding the bidding capacity of the estimating department, and tasks remaining until bid completion.
  •  Contact Management – Contractors submitting multiple bids to different clients will find a contact management system incredibly useful. 
  •  Customer History – Seeing the past projects that you have bid to a client is useful, especially if the Business Development team has made notes on successful or unsuccessful bids with actionable items that may improve your chances of winning the next bid.
  •  Customizable Reports – Some estimating software comes with integrated sales features that include useful reporting for operations and BD, such as insights into the sales funnel, characteristics and data on winning bids, and estimated times to complete bids.
  •  Digital Signature Software – In today’s world, people want low-friction and easy-to-use ways of doing business. The old way of printing off documents, taking them to the client, and having them sign is being phased out. Digital signature features often includes add ons such as open-tracking (being notified when your client opens the bid) and use-analysis (how long they had the document open, where they dropped off, where they spent the most time, etc.)
  •  Projections – Creating projections for the project schedule and budget is essential for the operations team to stay on track and understand how delays and cost-increases impact the project further down the schedule.
  •  Subcontractor Portal –  A subcontractor portal helps you communicate essential information, share project documents, and manage bid revisions with trades that are invited to bid on the project.

The Best Construction Estimating & Takeoff Software


2021 06 10 07 34 44 proest home page.png 1024×768 We create high-performing websites for the construction industry.

PRICING: US$5,000.00/year

FREE VERSION?: No. Free Trial.

  •  Accounting Integration
  •  Activity Dashboard
  •  Bid Management
  •  Bidder Management
  •  Building Product Database
  •  Change Order Management
  •  Collaboration Tools
  •  Cost Database
  •  Customizable Reports
  •  Customizable Templates
  •  Job Costing Software
  •  Multiple User Accounts
  •  Proposal Generation
  •  Reporting & Statistics
  •  Subcontractor Management
  •  Takeoff Software
  •  Third Party Integrations (Procore, Acumatica, Foundation, RSMeans Data)


  • Extensive list of features
  • Full takeoff-to-bid process integrated
  • Builds your estimate while doing takeoffs
  • Lots of pre-defined templates and reports
  • Expensive for smaller contractors
  • Some find the scheduling feature to be lacking
  • Difficult learning curve for inexperienced users

ProEst is a great option for midsize to large contractors. The system is cloud-based. This carries both pros and cons. If you don’t have an internet connection, you cannot access the suite. However, you will be able to access it on any computer with internet access, providing great flexibility.



Takeoff Software for Construction Estimating | PlanSwift

PRICING: US$1,595.00/year

FREE VERSION?: No. Free Trial.

  • Overlays
  • Quick Estimating
  • Calculate Measurements Instantly
  • Create custom assemblies
  • Import Excel Items
  • Calculate Labor, Material, & Taxes
  • Create custom formulas
  • Includes standard reports
  • Create unlimited number of custom reports
  • Takeoff Templates
  • Assemblies and Parts
  • Point and Click
  • Takeoff Templates
  • Share Estimates
  • Drag and Drop
  • Import Blueprints, Projects, and Jobs
  • Integrations: QuickBooks, UDA Construction Suite, databases like Excel, SQL Server, and MS Access


  • Extensive list of features
  • Detailed and customizable budgeting information
  • Intuitive and user-friendly interface
  • Lots of pre-defined templates and reports
  • No built-in cloud syncing between computers limits collaborative work
  • Price changes in database do not change pricing for current jobs. Needs to be manually added.
  • Only PDF is acceptable.
  • No API for web integrations

PlanSwift is best for smaller teams, where collaborative work features are not required. The software runs on your PC, and stores files locally. PlanSwift can be custom-tailored to fit all trades from finish paint to earthwork.



STACK Software - 2021 Reviews, Pricing & Demo


$1,999.00 / YEAR – 1 User

$4,999.00 / YEAR – 3 Users


  • Aerial Measurement
  • Assembly Takeoff
  • Audit Trail
  • Bid Management
  • Building Product Database
  • Cost Database
  • Data Import/Export
  • Electrical Estimating
  • Electronic Plans
  • Historical Database
  • HVAC Estimating
  • Job Costing
  • Job Management
  • Overhead Costs Estimating
  • Plumbing Estimating
  • Prebuilt Assembly
  • Project Management
  • Quotes/Estimates
  • Reporting/Analytics


  • Pre-built database that include in-depth lists of equipment, labor, and materials.
  • Easy-to-use scheduling features.
  • Fully cloud-based.
  • Fast loading of projects files.
  • Expensive for smaller contractors
  • Few accounting and project management integrations.
  • Rates increase as team add new features.
  • Cloud-based user interface has limitations

Stack is a growing company in the SaaS space. They implement new features quickly, have an active online community, and are constantly releasing new versions.
Cloud service is an essential feature for larger teams requiring collaborative tools. The user interface is intuitive and easy to use.

While still in its infancy, Stack is a fantastic tool for estimating teams and is currently our favorite.


The market for construction estimating software is growing at a staggering rate, and there are new options being released frequently.

Many estimating suites come with integrations that allow you to connect to your sales CRM and KPI dashboards. However, most of the options with modern integrations are hosted in the cloud.

To ensure everyone in the organization is in the loop on new projects, you need to ensure there is cross-compatibility with other software suites that may be used for sales and operational processes.

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