A change order is extra work added to a job after the price was agreed, priced and approved separately.
Two numbers are worth watching: how many are pending approval, and what approved changes add up to as a share of the original bid.
Why pending ones are urgent
A pending change order is work that has been asked for and not yet agreed in writing.
On a busy site the work usually starts anyway. The customer asked, the crew was there, nobody wanted to stop over paperwork — and at that point you are doing the work with no agreed price and a weaker position to set one later. It is the most common way margin leaves a construction job.
The count matters more than the value. A pending change order that has been pending for two weeks has effectively been declined by inaction.
What the impact percentage tells you
Approved changes as a share of the original bid says something about your estimating rather than your customers.
Very low — either your scoping is excellent, or extras are being absorbed rather than charged. The second is far more common, and it is invisible except as unexplained margin erosion.
Very high — the original bids are systematically incomplete. Winning work on a low number and recovering it in changes is a strategy, but it is a fragile one, because it depends on the customer agreeing every time and it damages the relationship it depends on.
The discipline
Price it, get it in writing, then do it — even when it is small, even when the customer is standing there.
That order costs a few minutes and is the single largest protection on a construction job's margin. The extras that never get billed are almost never large individually; they are numerous. See job margin.