Does your company experience construction challenges? Based on our research, you’re not alone. Many construction companies experience quite a few construction management challenges! Some are par for the course, but some are fixable or avoidable.
Risk Management is One of the Biggest Construction Challenges
First, let’s acknowledge that it is a challenge to plan for unforeseen events and issues. However, one can be proactive in this area. Best practices are building some flexibility into project schedules and factoring in risk variables when bidding. Invest in programs like safety training. Insurance is also not a cost that can be cut.
- Does your policy cover defective work or is it an exclusion?
- The presence of EIFS could preclude insurance coverage.
- Employer’s liability exclusion means you can be sued as a third party and have no protection on your policy if it happens.
Bid Process and Sales Process Challenges
Above all, contractors agree that a bid management process is crucial to bidding and winning more work. It is a challenge to keep everyone on the sales team on task. And when they get to work, they need to stay on time, on budget, and on scope. Processes that clearly outline tasks and targets keep construction teams successful and accountable. A CRM for construction with features built for the construction industry keeps your sales pipeline organized and company profitable. And here is a great read with some sales statistics that you can use to your advantage. When it comes to project management, invest in a tool that allows everyone on a project to know what to do and when! It should also clearly communicate dependencies. For example:
- Streamlining lead/bid process and data entry
- Insight into employee workloads and due dates for proposals or tenders
- Efficient and effective follow-up procedure
- Transparent bidding process
Communication is One of the Construction Challenges
Without clear communication, crucial tasks can certainly slip through the cracks or issues remain unaddressed. But it remains a challenge to facilitate open communication between the developer or owner, the architect, client, engineers, general contractor, and subcontractors. The entire team needs visibility into processes and information to ensure that crucial tasks don’t slip through the cracks.
A project management software that includes an email client (or integrates with one), online notes, and a calendar can keep communication pathways clear.
Sustainability
Sustainability is one of the current trends in the construction industry. Adding “green” space to, finding and using sustainable materials for, and making buildings energy efficient are modern-day challenges that contractors face too. Often contractors lack experience in this area but sustainable construction can lead to higher profitability. It also sets them apart as trailblazers and prepares them for future building compliance. It makes any investment of your time in this area worth your while. Take a look at five techniques that have the greatest impact on sustainable building construction. For instance:
- Reduce Waste
- Prevent Pollution
- Use Sustainable Materials
- Conserve Energy
- Add Green Space
Costs
Cash Flow
Invoicing timely to avoid cash flow problems down the road is an area of concern for many small and medium-sized construction companies. Still, even larger companies, with larger sums at stake, can run risks in this area. Download this whitepaper to make sure you don’t run out of cash.
Tariffs
Paskr and Construction Dive reported that new tariffs were raising the base price of common construction materials, such as steel, aluminum, and timber – by as much as 20 percent.
This makes it difficult for contractors to guarantee material cost and could cost them profit.
Their article also recommends that you add clauses in your contracts to allow for material cost changes. For example, a project management system or construction management software (CMS) can be a great solution for this challenge.
Tracking and Forecasting Are Both Construction Challenges
One contractor noted that a lot of documentation was being done via paper, and was not digitally stored, which makes it difficult to retrieve historical information. Whether a company leverages forecasting to prepare a bid proposal for a client or even decide whether to bid, access to the necessary data can be one of the biggest construction challenges. For example, this is information that can be stored, analyzed, and accessed with a construction CRM.
“Our biggest pitfall by far is not having visibility to win/lose records. We need a CRM that allows us to drill into performance by personnel (which of our estimators/bidders is winning jobs the most or least), by GC, job type, etc. We have a lot of tenured people in our company who retain information in private spreadsheets or in their heads.”
Limited Skills
Finding skilled construction professionals is probably the biggest challenge facing the construction industry today. Some contractors also found it a challenge to find the right contractors to work with. Networking seems to be the best approach to find the right contractors to work with. Find one good partner you can trust and ask them to recommend contractors they’re willing to endorse.
Ironically, drawing on a younger more inexperienced population of young workers and training them has an upside. They are quick to adapt to and use new technologies, next on the list of challenges in the construction industry.
In a 2019 survey by Autodesk and the Associated General Contractors of America (AGC) about shortages, AGC’s chief economist Ken Simonson said, “Labor shortages in the construction industry remain significant and widespread. The best way to encourage continued economic growth, make it easier to rebuild aging infrastructure and place more young adults into high-paying careers is to address construction workforce shortages.”
Conclusion
Construction professionals may not have control over all their construction challenges, for example risk and tariffs. But they can factor those variables into their processes.
And even though the adoption of technology is a challenge, technology can address many of the challenges that we uncovered in our research. For example, a CMR tool can streamline the bidding process and provide visibility into the sales pipeline, as well as provide the information you need for planning. A project management tool, on the other hand, can provide the structure for on-time, on-budget, and on-scope delivery.
Please weigh in with a comment on the challenges you face in your area of expertise. This is an autonomous survey. Just identify specifically what your role in the industry is. Your input will serve to direct our research and produce in-depth reports with customer stories, lessons learned, best practices, and solutions to those construction headaches!