Labour is one of the biggest cost drivers on any construction site, often accounting for 20 to 40 per cent of total project expenses. At the same time, Australia’s construction productivity has been flat or going backwards for decades, with housing construction now producing only about half as many homes per hour worked as it did 30 years ago. Put simply, the industry is paying more people more money to get less done.
Other sectors with high labour costs have not accepted that equation. Hospitals, restaurants and airlines have spent years refining their workforce models so that every role, every shift and every task is matched to the lowest appropriate skill level. That is how they protect margins when wages rise. Construction has barely started that journey.
How Hospitals Use Skill Mix To Protect Budgets
Modern hospitals organise their workforce around a deliberate skill mix. Surgeons perform complex procedures, registrars handle diagnostics and decision support, nurses manage bedside care, while assistants and orderlies take on routine physical tasks. The idea is simple: do not use a $300 an hour specialist to push trolleys when a lower paid staff member can do it safely.
International research on health workforce design is blunt. Changing the mix of roles and shifting tasks from highly trained staff to mid level workers can cut costs without harming patient outcomes when it is done properly. In Mozambique, for example, surgically trained assistant medical officers delivered similar results to specialist doctors at significantly lower cost in some procedures.
Hospitals do this not because they are heartless, but because labour is their single biggest line item. If they let senior doctors spend half the day on basic admin, the economics of the entire system fall apart.
Restaurants Know Their Numbers Better Than Builders
Restaurants take the same approach from a different angle. Most operators track labour cost as a percentage of revenue every week. Industry guidance is clear: many venues aim to keep labour somewhere in the 25 to 35 per cent range, with anything much higher putting pressure on profitability.
To stay in that band, cafes and restaurants lean heavily on role clarity. Head chefs do menu design, ordering and complex dishes. Prep cooks chop, portion and batch. Front of house staff handle service. Cleaners and dishwashers do the low skill, high volume work. If a head chef spends all night scrubbing pans, the wage bill blows out and service quality drops.
Crucially, hospitality operators flex staffing up and down by shift in response to bookings, weather and events. They know they cannot afford to run Friday night staffing levels on a quiet Tuesday. That level of vigilance around labour utilisation is still rare on building sites.
Construction: High Wages, Low Productivity
Australia’s construction sector sits in a different place. Wage pressure is rising, with the construction wage price index growing slightly faster than the broader economy in recent data, driven by ongoing labour shortages. Labour cost escalation remains one of the main pressures on project budgets.
At the same time, labour productivity in construction has fallen, even as other sectors have lifted their output. In 2022-23, construction labour productivity declined by around 1.8 per cent, while the broader economy still recorded long term average growth of about 1.3 per cent. The Productivity Commission has reported that the housing construction sector now delivers only about half as many homes per hour worked as it did three decades ago. Oxford Economics has estimated that stagnant construction productivity is costing Australia around $62 billion in lost output every year.
This is the definition of a broken labour model. The industry is paying more, getting less, and still largely relying on blunt tools like full day labour hire bookings or permanent headcount to solve short term problems on site.
Where The Skill Mix Breaks Down On Site
On a typical residential or commercial site, it is common to see:
- Carpenters spending hours on demolition, clean up or basic material handling
- Site supervisors doing traffic control, unloading or store runs
- Highly skilled trades waiting around because a second pair of hands is missing for a short task
- Apprentices and junior workers underused because there is no simple way to bring them in for three hours without payroll friction
From a cost perspective, this is the equivalent of a hospital paying a surgeon to fetch bandages or a restaurant paying the head chef to stand at the sink. When labour can represent up to 40 per cent of total construction costs on some projects, wasting skilled hours on low value tasks is not a minor inefficiency. It is a direct hit to margin.
The problem is not that construction companies do not understand the concept of skill mix. It is that they lack the operational tools to deploy the right person with the right skill at the right time, especially for short windows of work.
Borrowing The Hospital Playbook For Construction Labour
If construction adopted the same discipline as hospitals or restaurants, labour planning would look different. Project managers would treat skilled trades like surgeons. Their time would be protected for high value work only. A layered workforce of semi skilled labourers, apprentices and general hands would handle most of the lifting, cleaning and preparation.
In practice, many builders say they would like to work this way, but call around, text trees and traditional labour hire do not support that level of granularity. Booking a full day labourer when the task really needs three hours feels wasteful, so the job gets pushed onto whoever is already on site. Over time, that becomes normal, and the true cost of misused labour is buried in project overruns.
Where Casu Fits: Precision Labour, Shift By Shift
This is where platforms like Casu are starting to change the equation. Instead of locking into full day labour hire or relying on whoever picks up the phone first, businesses can book vetted workers for specific shifts, at specific skill levels, only when they are actually needed.
A Brisbane builder can use the Casu app to bring in a general labourer for three hours of site clean up on handover day, rather than paying a carpenter to do it at a higher hourly rate. A Sydney landscaping business can post a same day shift for a semi skilled worker to help with turf laying, without adding another permanent head. The core idea is identical to a hospital using assistants to free up nurses, or a restaurant using kitchen hands to free up chefs. The highest cost, highest skill workers stay focused on the work only they can do.
By matching task complexity with appropriate skill level, and allowing businesses to flex up and down shift by shift, Casu helps construction firms move closer to the kind of labour utilisation that hospitals and restaurants already take for granted. That is where the real cost savings live, not only in lower direct wages, but in faster programs, fewer idle hours and reduced risk of blowouts.
Why This Matters Now
With productivity in construction under intense scrutiny and a national housing and infrastructure pipeline that is already struggling to be delivered, the industry cannot afford to ignore labour utilisation any longer. Material prices may stabilise over time, but wage pressure and labour shortages are unlikely to disappear. The only sustainable response is to use every paid hour more intelligently.
Other sectors have already shown what that looks like. Hospitals have built sophisticated skill mix frameworks. Restaurants live and die by their labour percentage. Construction now has the tools to follow suit. Platforms like Casu give builders practical ways to structure labour like a hospital roster or a restaurant shift plan, instead of treating every problem as a full day booking.
In an environment where every percentage point of margin is under pressure, that shift in mindset might be the difference between projects that just scrape through and businesses that consistently stay ahead of rising costs.