Everyone is a would-be estimator, or so it would appear sometimes, but there's often more to the role than meets the eye.
As a career estimator for more than 40 years, I have engaged with many professional, commercially competent construction estimators, with a significant number of these professionals helping me to shape my own career. However, I’ve also had the misfortune of having been aligned with too many cost clerks who have doubled as ‘guesstimators.’
It is true that you only get what you you’re prepared to pay for, and that “if you pay peanuts you almost guaranteed to get monkeys.” It is also a fact that an estimators costs are overhead costs that have very little billable time under our current “free quote” mentality. However, it must be remembered that in the end it is the client who pays the contracted sum, which actually includes or should include realistic overhead provisions.
The ‘estimating function’ is absolutely critical to the success and or failure of construction business, and too many managers fail to recognise this fact. They do so by undervaluing the commercial awareness that the construction estimator has innately via his or her experience, opting to instead attempt to either do the estimating themselves or use cost clerks.
The industry at large has been guilty of not training enough estimators, or using the estimating function as a ‘stepping stone’ up the corporate ladder to project management or other roles. As a practical and dynamic industry, it is absolutely critical that we provide genuine career paths for all prospective participants, be they trade-based, tertiary qualified graduates or persons seeking to be retrained as active players in a changing landscape.
We need to recognise that all careers have their genesis somewhere, however estimating requires an enormous amount of practical experience, as well as analytical skill and competencies, underpinned with a strong work ethic to meet some crazy timelines (failure to close a bid on time is not an option) and the commitment to “getting it right.” If the risks are not fully comprehended, an estimate will be too low or too high, and again neither of these outcomes is an option.
There are typically three ‘wells’ that we dip into to recruit estimators:
- Trade base (ideally with five-plus years’ experience, seeking career advancement or change due to physical constraints encountered from working in a robust environment)
- Quantity surveying (often a prized recruit in the sense that his or her analytical skills have been fully developed), only requiring three or four years of site exposure to comprehend the varying degrees of difficulty one team may experience over another and the geographical impediments that impact projects
- Graduate trainee (ideally with a mapped five-year career path or cadetship typically provided in the T1 sector). These will often be ‘tomorrow’s leaders’ and a number of these trained professionals may elect to remain in an estimating role.
In my opinion, an estimator needs to have spent several years on site to see how a project actually goes together before attempting to undertake the challenge of actually translating an architectural concept and an engineering design into a commercial figure capable of then being accepted as a contract sum. This contract sum will in turn be written into a legally binding agreement whereupon many lives rely on the applied correctness of the estimating role by the estimator.
So, what makes a good estimator as opposed to a cost clerk? If you look at a lot of the advertisements for construction estimators, some companies like them to have a trade background linked with extensive experience pricing different types of projects, and if they have a construction related degree that’s a bonus. However, the operative word here is ’experience,’ and that in essence is the primary difference.
But getting back to the question of how we differentiate between a cost clerk and a good estimator, in most cases it boils down to attention to detail, practical/site experience and his or her commercial awareness. You can tell an administrative assistant to sort subcontractor prices from highest to lowest without knowing much about construction, but it takes a good estimator to read the fine print to get a true picture of who is actually the lowest or indeed highest for that matter.
Despite this, it appears that some building contractors employ young students with little to no estimating experience to do just that – shuffle papers around with very little analysis of the subcontractors’ pricing.
Putting young assistants in this position without the correct training is suicidal, as it gives them a false sense of security that estimating is easy when in fact it’s quite a detailed and unique profession. Estimators that have come up through the ranks through shuffling papers around have sometimes learned the hard way (sometimes to their own detriment) that there is more to estimating than meets the eye.
Now having said that, the blame should not entirely lay at their feet. In-house training is usually based on ‘learn as you go’ and not dedicated training sessions.
The T1 sector and a significant number of the T2 building contractors run training sessions not only for their juniors but also their senior estimators. They know that, with new building techniques and new products, it pays dividends to keep their estimators up-to-date. When these companies are tendering on multi-million dollar projects, they can’t afford to become complacent as a few mistakes can cost them millions of dollars.
Smaller building contractors may not have the same resources, but they need to make sure they don’t fall into the trap of letting their junior or cadet estimators become ‘paper shufflers,’ who in turn become cost clerks. Giving them the correct training (which is not always possible to get from their existing senior estimators due to workload) will make them more diligent in their approach to putting tenders together.
It makes good sense to develop the skills of your estimators on an ongoing basis. Over the long term, it will save you money by decreasing the risk of mistakes.
In a lifetime, an estimator can “build” a thousand projects, whereas some construction teams (those charged with the ultimate delivery) may struggle to construct fewer than 50 projects in their careers.