5 Essential KPIs Every Construction Industry Leader Needs to Track

What KPI construction measures do you use as a construction management leader to track the construction process and quality?

Often, it’s comfortable and practical to use financials as the best gauge. Was the project over or under budget? What was the margin on the latest sale or the ROI on that principal investment?

In terms of high-level metrics, owners and C-suite teams alike often focus primarily on dollar signs. 43% of construction firms are more concerned with meeting short-term financial goals than building long-term operational excellence.

While money is essential, it’s far from the only project metric worth noting. Today, we’re sharing five key performance indicators in construction project management (KPI in construction) that building industry executive management should analyze to determine if a task is on track or if additional improvements are required.

It’s worth recognizing that many national homebuilders and building product leaders already have reliable means of measuring the critical metrics mentioned below. That said, executives, vice presidents of construction, project managers, and superintendents with local and regional builders and building materials companies may find these KPIs a great way to start tracking smarter today.

Construction KPI Examples

1. Safety Metrics

There’s a reason why five of the top 25 most dangerous jobs in the U.S. include construction work.

Residential construction is an industry replete with physical risks and liabilities. Measuring a job site’s safety is critical because more reliable sites incur less risk, resulting in a more economical project.

Any time an accident or safety issue occurs, it can cost a significant amount of time and money to regain the momentum your team once had. Moreover, safety problems can also result in higher insurance premiums for your firm.

To this end, knowing and understanding how safely your team is performing is critical. Specific safety-centric KPIs include:

  • Your overall safety/incident rating
  • The number of accidents per contractor
  • The total number of safety meetings and communications

manager utilizing construction kpis

2. Bid and Take-Off Performance

A large part of a thriving residential construction home building business hinges on generating accurate, competitive bids and take-off that result in a desired amount of work.

Is your bidding process currently on track, or are there areas you could improve? Making suitable adjustments in this department can directly affect your bottom line. It’s essential to see clearly how your purchasing and estimating teams are trying to earn more work and whether or not those efforts are paying off in the right way.

A few bidding-specific KPIs include:

  • Upcoming bids currently under development
  • The number of RFIs and RFQs submitted
  • The number of business development meetings held and scheduled.
  • Number of active leads and prospects and associated probability of winning work
  • Number of issues and mistakes found in bid documents

Research shows that 54% of construction executives currently track errors, omissions, and constructibility issues in their bid sets. Then, 66% use that data to mitigate the risk of the same problems occurring in future projects.

3. Team Performance

Want to know how productive a project is? Track complex data on your team’s performance.

As a residential construction executive, you must understand how your team members spend their time and effort. This way, you can discern whether or not you need to allocate additional resources to the job or take some away to gain efficiencies and meet project goals.

Performance-specific KPIs for construction to analyze include:

  • The amount of waste (and recycling) generated per job
  • The average project revenue per hour worked.
  • Percentage of employee downtime
  • Percentage of equipment downtime

team using construction kpis to measure performance

4. Work Quality

We’re often asked how to measure quality in construction projects because it’s such a high priority for construction managers. In fact, none of your project managers want to waste time on rework. The old saying holds: getting it right the first time is better.

Are your projects top quality? Or are they half-hearted efforts that will likely result in timely and costly issues down the road?

To answer these questions, stay on budget, and stick to your timeline, you’ll need to keep a close eye on quality metrics.

Quality-specific KPIs for construction include:

  • Number of total project defects
  • Number of workmanship-related defects
  • The time required to reverse defects
  • The ratio of the number of inspections passed to the total number of inquiries
  • The total cost of all rework efforts
  • Customer satisfaction reports and ratings

5. Employee Satisfaction

It’s essential to maintain a good list of satisfied clients. At the same time, it’s also necessary to prioritize employee satisfaction and maintain morale.

Employees who feel supported and encouraged to grow in their craft will undoubtedly return this support through improved and invigorated performance. If they’re invested in their work and happy on the clock, their efficiency and contributions can’t help but grow. You’ll also see employee turnover rates drop when team loyalty improves.

Do you have the infrastructure and programs to provide this work environment? If not, it’s time to prioritize employee development and retention.

Along the way, satisfaction-specific KPIs for construction to track include:

  • Overall employee satisfaction rates
  • Employee turnover rates
  • Employee training completion rates

walking down steps and setting construction goals

Ace These Construction Executive KPIs

We all know that there’s more than one way to measure the real success.

As a thriving residential construction executive, you’ve learned to look at the big picture. You can see a finished house before it breaks ground or when it’s merely at its foundation.

Adopting that same long-term perspective when looking at your previous, current, and future projects is essential. While the financial aspect is important, so are the quality, safety, and satisfaction rates of any given job.

With these actionable insights regarding KPI construction measures, you can make better-informed business decisions moving forward and cement your reputation as the best. We’d love to partner with you as you grow your career and build your team.

Schedule a consultation to learn how MatchBuilt can help your construction company find the skilled, experienced employees you need to ace each of these KPIs every time.

KPI Construction FAQs

How to measure quality in construction projects?

Quality-specific KPIs for construction include the number of total project defects, the number of workmanship-related defects, the time required to reverse defects, the ratio of the number of inspections passed to the total number of inquiries, and the total cost of all rework efforts, and customer satisfaction reports and ratings.

What is KPI in construction?

A KPI is a key performance indicator that measures certain aspects of the construction process and quality.

KPIs for Construction Infographic

Here’s an easy-to-follow infographic for anyone looking for a quick reference guide.

kpis for construction managers to track infographic

More on KPIs in Project Management


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