7 types of construction KPIs you need for effective construction management

construction kpis types

Key performance indicators for a construction project manager are a pathway to achieve operative finesse across job site tasks and processes – Linarc outlines the essential construction KPIs

Project management KPIs are specific measurement tools indicating how well teams achieve particular goals. They reflect the targets of a project management team and solidify the tasks and processes at the construction jobsite. Key Performance Indicators (KPIs) can change the dynamics of a project, let’s explore.

KPIs for Collaborative Construction Management

What are construction KPIs?

KPI or Key Performance Indicators are metrics for measuring a construction project’s success. Labour productivity, safety and inspections, Client satisfaction, and construction time and cost are essential indicators that measure a project’s performance.

To create practical and useful KPIs for Project Management, consider these factors:

  • KPIs must be clear and meaningful
  • Choose the essential indicators relevant to the project 
  • All parties must align with the objectives
  • Measure the KPIs regularly
  • KPIs must be realistic and cost-effective 
  • These should aim for the project’s success
  • Must be agreed upon before the project begins

Construction KPIs types

1. Schedule

Schedule KPI reflects your schedule compliance and the overall efficiency of the scheduling process. Here, effective real-time communication improves the efficiency of workflows and helps reduce costs. It also ensures that projects proceed smoothly without interruption. Managers can alert jobsite personnel of upcoming changes to the schedule or find alternative suppliers or divert another truck with the suitable materials. 

You can determine whether your planning or scheduling system is performing optimally by tracking the work completed, started, and remaining. If KPI metrics consistently show low compliance across several weeks, it is time to investigate why. 

2. Cost

Cost management is the process of monitoring the cash flow in a project and identifying potential issues. A simple way to do this is using a Cost key performance indicator. Cost KPI help determine the financial stability of your program, allowing management to view cost predictability indicators like variance, cost of change orders, and project leader change orders. Moreover, cost KPI can help predict future costs by comparing how long tasks take and how much they cost. 

3. Quality

The quality of the construction is an important metric to determine whether the company can deliver the project within budget and on time. Quality metrics will help ensure that the project starts on the right foot and that any necessary changes, later, can be minimized. The cost of dealing with these changes can be substantial, prioritizing quality an essential part of a successful project.

Quality construction KPIs can consider the number of issues reported in quality checklist, punch list items, number of total site inspections, number of passed site inspections and inspection failures.

construction KPIs quality

4. Safety

Safety practices play a critical role at the jobsite, which is why it’s essential to take a proactive approach when it comes to worker safety. Having proper safety KPIs can help you better understand how the business performs regarding safety and other KPIs related to profitability and productivity. To ensure that your construction site is safe, you must include KPIs pertaining to safety management, such as type, severity and frequency rate of injuries, its impact on the schedule; and staff training and safety huddles.

5. Waste

This KPI is essential for measuring a company’s purchasing activity and inventory. As a crucial predictive measure of inventory use, the construction KPI can help compare purchasing activity and identify instances of wasted inventory. Measuring this KPI is vital as unused inventory can be a significant drain on the company or a project. 

KPIs such as waste generation rate, construction waste management, labour downtime, and equipment downtime should be compared to determine how inventory has been used throughout the project’s life.

6. Sustainability

Sustainability is becoming crucial for businesses of all sizes as the public’s opinion on the environment matters. To stay ahead of the curve, measuring your company’s sustainability is essential. These construction KPIs will help you track your progress and potential future improvement areas.

The most important KPIs to track when considering sustainability are carbon footprint, energy consumption, product recycling rate, sustainability index, supply chain miles, water footprint, waste reduction rate, and waste recycling rate.

7. Customer satisfaction

A customer satisfaction KPI measures how pleased customers are with your project’s construction quality and processes. Tracking these metrics over time can determine if improving the experience will lead to increased customer loyalty and revenue.

Some factors one can consider measuring these metrics are:

  • Net Promoter Score to measure customer loyalty over time.
  • Customer Effort Score measures customer satisfaction based on the ease of completing a specific task.
  • Customer Satisfaction Score or CSAT measures satisfaction at particular moments in the customer journey.
  • CSAT measures whether your product or service matches your customers’ expectations after one interaction.

These construction KPIs are important for cost management and safety, quality of the project results, staff productivity, sustainability, and much more.

Creating KPIs

How to create practical KPIs for Project Management?
KPIs or Key Performance Indicators measure your project’s performance using quantitative data. They indicate how the work is progressing and where it is lagging so project managers can take prompt corrective actions. Creating practical KPIs helps a construction company build long-term performance benchmarks.

Here is how you can create practical and useful KPIs for Project Management:

  1. Identify

    Establish clear and meaningful KPIs that are relevant to your organization. They should answer key user questions about the company strategy.

  2. Select

    Choose indicators that are important to the project. Selecting vague or difficult metrics can waste hours in monitoring and follow-up.

  3. Involve your teams

    All stakeholders must align with the objectives. Involve your teams in setting KPIs so that they have a better understanding of the goals and their contribution.

  4. Observe

    Measure the KPIs regularly depending on their characteristics, how often their information changes, and their value in decision-making. 

  5. Check for feasibility

    Select KPIs that are realistic and cost-effective. They should motivate the staff to work towards a common goal and save time and money for the company.

  6. Roll-out

    KPIs are information tools for organizations. Set KPIs that inform leaders about the overall progress of the project.

  7. Establish analytics

    The metrics for KPIs must be agreed upon between the parties before the project begins as they reflect the central concept of the organization.

    Setting practical and useful KPIs help you make the right decisions to ensure better control of costs and schedule. They determine how teams achieve goals and provide critical data for effective decision-making throughout the project.

Construction KPIs help you make the right decisions to ensure that your projects deliver true business value to the customer. KPIs are therefore essential to better control costs and schedule. They are meant to help determine which activities are relevant during the execution phase and could provide early warning signals to adjust the project.

While keeping track of cost management is essential, construction KPIs related to safety, quality, performance, staff, and sustainability are key to better-controlling costs and schedule.

Leave a Comment