In the construction industry, it’s difficult to accurately identify the biggest issues companies will have to prepare for year after year. The industry is evolving at such a rapid pace. Last year’s trends, however, give us some direction as to what challenges organizations should anticipate for 2020.
Here are some worth noting:
1. Continued labor shortage
According to studies, there are an estimated 290,000 open construction jobs available today. Unfortunately, finding skilled workers and tradesmen to fill the positions is proving extraordinarily difficult. Construction companies often find themselves looking to attract workers that already hold jobs in the same field and losing workers to competitors.
This is further emphasized in a 2019 survey released by Autodesk and the Associated General Contractors of America (AGC) in which association officials stated that shortages pose a significant risk to future economic growth. AFC’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.”
To that end, construction companies must take a closer look at their current compensation and benefits packages in order to retain and attract new talent. One effective strategy that could address this growing concern is investing in training, apprenticeships, and the tools needed to consistently support their skills growth in the organization.
2. New tariffs
Newly imposed tariffs are raising the base price of common construction materials, such as steel, aluminum, and timber. In fact, some report that building material costs can increase by as much as 20 percent at the beginning of 2020.
These new tariffs could impact the overall cost of construction, making it more difficult for contractors to guarantee material cost, thus losing a lot of potential for profit.
With this in mind, add new clauses in your contracts to allow for some wiggle room for material cost changes. Carefully track changes in your contracts. Be sure everything is documented and everyone is kept in the loop. A project management system or construction management software (CMS) can be a great solution for this particular challenge.
3. Overwhelming ability of solutions
The construction industry has traditionally been considered one of the industries most resistant to change brought on by technological adoption. However, last year proved to be a great year for construction technology, with numerous businesses deploying CMS and automating processes in the interest of improving operational efficiency.
However, the sheer volume of available solutions is proving to be a challenge for the industry. For example, companies implementing different platforms that are meant to facilitate easier communication and coordination end up using incompatible technological solutions with their partners and stakeholders.
Choosing the right CMS is critical to addressing this challenge. Select a CMS that can commit to successful integration with multiple solutions. Whenever possible, request a demonstration of the solution from a potential provider.
Construction is a challenging industry as it is. With the possibility of an economic downturn looming in the horizon, maximizing your resources as early as possible is key. Start by recognizing the potential pitfalls that your company might experience this year, and invest in the best tools that can help you address them.
If you would like to know your best options, contact a PASKR expert today.