The current state of the labor market is directly impacting construction companies in more ways than one. At the end of 2021, the construction industry had an average of 197,250 people quitting their jobs per month. Aging talent has played a significant role in the skilled labor shortage, with no backfill of workers to replace those resigning. However, the talent shortage is not slowing down the demand for large construction jobs across the country.
The required number of construction workers to keep up with demand is approximately 740,000 new workers annually until 2024. At the same time, the employment cost index has increased. According to the U.S. Bureau of Labor Statistics, compensation cost increases among private industry occupational groups from March 2021 to March 2022 saw a 7.8% increase for service occupations, including construction. Most construction companies can’t afford this increase in labor cost when also factoring in price increases for materials, inflationary pressure, etc.
Construction companies everywhere struggle to balance filling open positions while managing business operations through materials cost increases and inflation. Decision makers are searching for creative ways to protect their bottom line and keep operations running smoothly. One solution available to them is cloud-based and AI-enabled technology.
One way construction companies can work to supplement their staff is by equipping them with tools that help streamline workflow and increase efficiency. Cloud-based and AI-enabled technology, for example, can allow employees to focus their time on more practical work, instead of traditionally mundane tasks such as data entry and accounts payable. Businesses that utilize these technologies will see increased efficiencies and streamlined workflows.
Additionally, committing to a digitized approach will attract a younger demographic due to the workforce’s desire for modern technology. Younger generations tend to view the industry as outdated and unadvanced, causing potential candidates to focus on securing positions in other, more modern fields. With the increased use of automated technology, the construction industry is more likely to attract the younger talent it needs.
The first step businesses can take to digitize their company is applying AI technology to their business management practices. When coupled with a business management solution, AI technology can analyze mobile, holistic, up-to-date data. With this visibility, construction companies can streamline processes normally taking large sums of time, like controlling cost overruns and changing order processes. Technology that streamlines tasks and up levels visibility can help companies spark the interest of new and younger talent.
TECH FOR PREDICTIONS
Recently, construction leaders have been incorporating AI and other technologies to help automate several tedious (but essential) operational tasks. According to some experts, approximately 90% of construction megaprojects are significantly delayed, over budget, or display other deviations from planning.
By integrating AI, companies can evaluate a given project’s strengths, weaknesses, and profitability. AI and ML provide company leaders with information and insight into exactly where their money is going and how the business benefits. Using AI technology, decision makers can predict future costs, labor needs, potential delays, etc. With this level of expected outcomes, construction companies can proactively prepare for or react to project delays, supply chain deficiencies, and staffing shortages. When the AI is part of a broader business management solution, executives can thoroughly manage potential risks via a single business view while maintaining a fine-tuned visibility into budget allocation.
THE RIGHT TECH
Once a company decides to implement AI-enabled technology to assist in managing its operations, the next step is to determine what solution is the best fit. The first and arguably most important step in choosing a technology provider is conducting a process review and analysis. Company leaders must have a sound understanding of the company’s current situation and needs. It is crucial to analyze where the company is starting from compared to where it hopes implementing this technology will take it. Decision makers should then consider how much time and money the company can afford to invest in digital integration.
Next, the company should research what solutions offer the features it needs the most. These features can be anything from data organization and consolidation to document filing and scheduling. Shop around to see what software will benefit the company the most and request demos from top contenders to see the software in action.
Once the company decides, it should work to prepare its staff for the change. Training and tutorials can help get employees acclimated to and familiar with the technology. Be sure to encourage the team to ask questions and lean on the IT support from the vendor to maximize the investment. Ultimately, these tools will help make their jobs more manageable, and they should feel confident using the solutions.
Hundreds of companies have successfully applied AI-enabled capabilities to their construction business management and accounting processes. For example, Canadian Railway Firm, Remcan greatly benefitted from implementing cloud-based software. After struggling with a lack of efficiency due to manual data entry and analysis, Remcan decision makers knew they needed to investigate an automated solution. After incorporating a cloud-based and AI-enabled technology, company leaders noticed increased financial visibility, improved employee satisfaction, immediate access to accounting data, and foresight into future growth.
During ongoing labor shortages, increased materials costs, and economic downturn, construction leaders need solutions that allow them to run efficiently and effectively. Utilizing tools like cloud-based and AI-enabled technology enables businesses to save time and money because they streamline processes and maximize existing talent productivity. At the same time, modern technologies can attract a younger demographic to an industry that needs their skills.
About the Author:
Ali Jani is chief product officer at Acumatica. Jani has 20 years of experience in the software industry and a successful track record as a high-tech entrepreneur with multiple successful start-ups. For more, visit www.acumatica.com.
Modern Contractor Solutions, September 2022
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