As more construction workers return to jobsites, construction business owners are grappling with what the new normal looks like and how they can protect their workforce while keeping their business running.
What changes should contractors expect on jobsites to reduce the risk of coronavirus?
ANDERSON: While local laws vary, most are adjusting to different ways of working that involve less people on the jobsite at the same time, physical distancing on the jobsite whenever possible, and wearing PPE more often than they’re used to.
Many projects are limiting interactions by allowing only one trade at a time on the jobsite, while some elements of the building process such as inspections are being done virtually to further reduce the number of people in a given location. Prefabrication is a growing trend in the industry that I think will likely continue to gain traction as well. Manufacturing things off site and assembling them on site can help streamline some processes and further help control the work environment.
What else can businesses do to protect their employees?
ANDERSON: Business owners can also look to their teams for suggestions and have an honest dialogue: What parts of the workflow need to be adjusted? How many people need to be on the jobsite at a time? What is keeping them up at night? It’s important to understand their needs and make necessary accommodations. We need a strong workforce to get through this. We’re already facing a qualified worker shortage so it is imperative for everyone to do everything they can to keep their employees healthy.
What impact are these changes having on construction projects?
ANDERSON: Most projects are expecting delays as teams adapt to new ways of working. Many have experienced a decrease in productivity as they are not able to do things as efficiently or as effectively as they have in the past. We’re also seeing less demand for certain types of projects in industries such as hospitality and retail. In this economic downturn people are being very careful about their spending, so some sectors are going to be slower to rebound.
Are there sectors where you think there will be more opportunities for growth?
ANDERSON: Yes, this pandemic has highlighted the need for growth in areas such as manufacturing. Many industries have experienced disruptions to their supply chains in part because so many goods are manufactured overseas. In order to bring manufacturing back to the U.S., we have to build more manufacturing facilities, so there will be new opportunities in that sector.
We’ve also seen the need for more healthcare facilities so there will be opportunities for building new facilities as well as looking at how we might be able to update current facilities to increase capacity. Infrastructure is another area we may see new opportunities as there’s likely to be increased government spending in that sector to help keep the economy afloat.
What other changes are you seeing in the industry?
ANDERSON: With a limited number of new projects to bid on, firms are facing increased competition in their efforts to win new work. This environment often puts firms in a situation where they are taking on exceedingly risky work at almost zero profit just to keep their workforce hired and business moving forward. Firms also anticipate delays, supply chain issues, and price volatility to affect most of their projects for the foreseeable future, so they’re facing increased risk from every direction.
Are there ways mitigate some of that risk?
ANDERSON: While it’s difficult to navigate such a challenging environment there are definitely ways businesses can try to soften the impact. It’s essential for firms to have a business continuity plan in place to help them survive unexpected circumstances and tough economic times. It’s also important for businesses to conduct regular cash flow forecasts so they have a better handle on their finances and understand how certain scenarios will impact their bottom line. Financial implications as well delays and other external variables should be factored into the bidding process as much as possible.
Many business owners will structure their contracts differently as they try to directly address some of the unknown variables in an effort to alleviate risk and provide more flexibility. They will want to ensure a broad force majeure clause is included in all contracts as well. Many businesses are also adding specific clauses related to COVID-19 safety measures in an effort to ensure subcontractor compliance and limit their liability. More businesses will also turn to technology for help as they search for ways to set themselves apart from the competition and work to minimize risk.
What are some ways technology can help?
ANDERSON: Technology has obviously played an integral role in keeping people connected and businesses up and running throughout this pandemic. Contractors have increasingly been adopting cloud-based solutions and mobile apps to help streamline projects, increase efficiency, improve collaboration, and keep their teams in sync, which is more important now than ever.
Estimating software can also add a lot of value as it helps businesses produce faster, more accurate estimates, enabling them to pursue the right work at the right price. While accounting and project management solutions help provide firms with the visibility needed to make the best decisions for their business. As variables such as material costs or labor hours are affected, they can make updates and automatically project out the impact the changes will have on their budget.
As we all learn to navigate this new normal, questions will undoubtedly arise. The industry has a wealth of resources available to help keep contractors updated and connected virtually—from industry resource pages to online webinars, conferences, and forums. It’s important to maintain our sense of community. The construction industry is resilient and will get through this together.
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Dustin Anderson is vice president and general manager of Sage’s Construction and Real Estate practice in Beaverton, Oregon. He is a dynamic construction software executive with more than 20 years of success serving the industry.
Modern Contractor Solutions, February 2020
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