With shrinking margins, tighter schedules and a deepening skilled labor shortage, electrical contractors are increasingly embracing prefabrication not as a trend, but as a core business strategy. The ROI of prefab is no longer theoretical; it’s backed by data.

According to the ELECTRI report “Estimating With and Pricing of Prefabrication” by Heather Moore and Meik Daneshgari, controlled prefab environments consistently push labor productivity to 70%–80%, compared to 45%–60% in the field. Raising prefab use to just 20% can lower composite labor rates by more than 10% and increase profit margins from 13% to 17.3%. Even when direct labor savings are modest, contractors cite major benefits in safety, quality, schedule control and reduced material waste.

As one contractor put it, “Even if prefab didn’t save us a single hour, we’d still do it for the quality control and safety alone.”

Material-focused prefab kits can also yield up to 50% labor savings and cut material waste by 40%.

From shop floor to job site, how is ROI realized?

ROI isn't just about labor hours that are reduced from an install, It's about process transformation:

• Fewer site delays: Prefab shifts variable tasks into controlled environments, reducing job site bottlenecks due to weather and other unforeseen circumstances.
• Better material handling: With labeled, room-specific kits, installers spend less time searching and more time installing.
• Enhanced safety: Shop floor assembly minimizes ladder time, arc flash exposure and other site-specific hazards.
• Lower risk of rework: Standardized, repeatable builds improve quality and reduce rework due to improper installation.

In its 2014 report “Industrialization of Electrical Contracting” report, ELECTRI researchers identified firms that used prefab to cut install times by 25% on medium-complexity commercial jobs, with added value stemming from tighter vendor integration and BIM-informed planning.

What are the contractors that have started their prefabrication journey saying?

One contractor noted, “About 60% of the savings are due to higher productivity, while 40% is due to a lower prefab composite rate.” Decreasing composite rates by bring prefabrication into a controlled environment is just one specific example.

“Prefab has become our competitive advantage,” said a superintendent from a Midwest electrical firm featured in the study. “We’re winning bids not just on price, but on confidence, our ability to deliver with precision.”

Another electrical contractor added, “After our first prefab rollout, we saw a 30% drop in tool-related incidents. That alone sold our safety director.”

Where to start with prefabrication

Prefabrication doesn’t require a million-dollar facility or a fully staffed production team on day one. First steps can include:

1. Pick the right project: Choose one with repeatable assemblies like MC whips, device boxes or stub-ups.
2. Find a champion: Identify a field foreman who’s open to prefab. Enthusiasm matters more than experience. Keep in mind that a good foreman can affect one job a year in the field, or multiple jobs in the prefab shop.
3. Use what you have: Clear out underutilized warehouse space and begin assembling basic, repeatable components.

There are two viable paths to prefab:

• Build in-house: Set up simple workbenches and wire spool racks.
• Buy prefab assemblies: Partner with vendors who provide kitted solutions labeled by room or floor.

And crucially—track your hours. Shift labor estimates from field to prefab buckets and measure deltas in productivity. As the old saying goes, what gets measured gets managed.

How prefabrication can improve process above ROI

Prefab is not just a cost-saving tool; it is a culture shift. It fosters lean thinking, improves cross-departmental collaboration and opens the door to advanced practices like BIM-driven prefab, automated layout and integrated supply chain logistics.

Building information modeling (BIM), also known as virtual design and construction (VDC), is transforming prefabrication in electrical contracting. By creating detailed 3D models, BIM allows teams to plan and coordinate installations with precision before materials hit the job site. This leads to early clash detection, accurate shop drawings and streamlined material takeoffs. According to ELECTRI International, BIM-integrated prefab can yield labor savings of 15%–35%, with some tasks seeing up to 75% savings. Beyond labor efficiency, BIM improves communication between contractors, vendors and operations teams, reinforcing preconstruction workflows. For those unsure where to begin, ELECTRI offers BIM/VDC coaching and prefab resources to help contractors get started. Embracing BIM and prefabrication workflows is a strategic move toward smarter, more efficient project delivery in today’s competitive market.

*Editor’s Note: To download the ELECTRI reports, you will need to create a free account with ELECTRI International or log in to your existing account.