What Construction KPIs Are You Tracking?

In the construction industry, success hinges on more than just completing projects on time and sticking to the budget. 

Construction companies need data-driven insights to:

• Optimize performance
• Mitigate risks
• Drive profitability

Key Performance Indicators (KPIs) play a key role in this process. They provide valuable metrics to:

• Measure progress
• Identify areas for improvement
• Make informed decisions

Check out some of the most important construction KPIs and why they matter below. 

1. Project Profitability

The one goal of every construction project? Profitability. 

Tracking project profitability KPIs allows construction companies to measure each project’s financial performance and spot opportunities to maximize returns. 

Key metrics in this category include:

• Gross Profit Margin: This measures the profitability of a project relative to its revenue.
• Net Profit Margin: This reflects the overall profitability of a project after accounting for all expenses.

By monitoring project profitability KPIs, construction companies can optimize profits by making better decisions about: 

• Pricing
• Resource allocation
• Project selection

2. Schedule Adherence

If you want to keep clients happy and run a profitable construction company, you have to complete your projects on time. 

Schedule adherence KPIs track actual project timelines against planned timelines. Ideally, they’ll help you spot delays so you can make changes. 

Key metrics in this category include:

• Schedule Variance: This measures the deviation from the original timeline.
• On-Time Completion Rate: This shows your company's ability to deliver projects on time.

By tracking schedule adherence KPIs, you can proactively:

• Address delays
• Streamline workflows
• Improve project delivery efficiency

3. Safety Performance

Safety performance KPIs are often overlooked, but they are essential for ensuring a safe working environment for employees and subcontractors. 

Key metrics in this category include:

• Total Recordable Incident Rate (TRIR): This measures the frequency of workplace injuries and illnesses.
• Lost Time Incident Rate (LTIR): This shows the severity of workplace injuries.

By monitoring safety performance KPIs, construction companies can:

• Identify potential hazards
• Implement preventive measures
• Foster a culture of safety within the organization

4. Cost Management

Cost management helps control expenses and maximize profitability in construction projects. 

Key cost management KPIs include:

• Cost Variance: This measures the deviation from the planned budget.
• Cost-to-Complete: This KPI estimates the remaining costs to complete a project based on current progress and expenses incurred to date.

By closely monitoring cost management KPIs, construction companies can:

• Identify cost overruns
• Implement cost-saving measures
• Ensure projects remain financially viable

Learn More About Your Company by Tracking Construction KPIs

Tracking key performance indicators is essential for efficient operations and driving profitability in the construction industry. 

Construction companies can gain valuable operational insights, identify areas for improvement, and make informed decisions to optimize performance and achieve long-term success by tracking these KPI categories:

• Project profitability
• Schedule adherence
• Safety performance
• Cost management

As an outsourced CFO specializing in construction companies, one of my goals is to help clients track and leverage the insights they receive from construction KPIs. Book a Right Fit Call today to walk me through your needs and figure out the way forward.