Growth in the construction industry continues, but the industry is experiencing challenges such as higher material costs, labor shortages and stagnant productivity. After listening to Engineering News-Record’s 2018 Construction Forecast: Boom, Bust or Draw, we wanted to share one speaker’s (David Hudd of Arcadis North America) thoughts on potential solutions to some of the industry’s challenges.
Issues affecting the construction industry:
- Skilled labor shortage. Younger individuals are avoiding vocational and trade schools and are showing less interest in the profession. Because of this, construction companies are finding it challenging to employ skilled laborers. In March 2017, 73% of contractors said they had difficulty finding qualified workers. This strain on the construction industry workforce could result in companies needing to turn down jobs.
- Cyclical workload. Construction depends heavily on economic factors, as well as seasonality. This causes issues within the company – such as hiring and laying people off during booms and busts.
- Inefficient utilization/productivity. Poor analysis and communication, as well as customizable designs, leads to inefficiency. Each project is different, and contractors must start at the beginning on every project.
Potential solutions to the challenges:
- Increased investment in training and skills. Investing in employee training is vital. A 2017 survey found students and young professionals find continuous learning and career development very valuable. Companies should consider investing time and money to develop their employees.
- Off-site manufacturing. Offsite or modular construction can eliminate 40-60% of labor off job sites. This saves contractors and developers both time and money. Offsite manufacturing increases efficiency and reduces construction schedules.
- Mechanization/technology adoption. Using modern equipment and technologies can be more cost and time efficient than a manual approach. Mechanization also reduces worker fatigue by eliminating some of the heavy manual work. This could also help with the construction industry labor shortage by requiring fewer people to do the same job.
- Increased standardization. Standardization can help increase productivity and reduce costs by allowing more to be achieved in less time, which can positively impact the construction schedule.
Staying ahead of industry challenges. Here are a few things we are doing as a company to stay ahead:
- Investing in employees. We are staying ahead of the potential issue of the skilled labor shortage by partnering and establishing strong relationships with local trade unions and schools. We know our markets well and have an accurate labor outlook for those markets in the coming years. Through seminars and trainings, we make sure our employees are educated on the latest trends, requirements and technologies.
- Cyclical workload workarounds. Every industry has its own cyclical challenges, whether it’s the retail industry or the hospitality industry. The key is to diversify service offerings and ensure the company is informed of projected industry trends and the potential impact. Between industry, seasonality and economic factors, we have been able to more accurately judge upcoming work and new hires.
- Open lines of communication. We believe communication and planning are key to the successful completion of any project – big or small. Meeting with owners and their design team for a kickoff meeting and regularly scheduled meetings throughout the project promotes collaboration. Our Project Managers and Superintendents follow a similar process on each job to ensure they are gathering all the information they need to make the project run smoothly and make the process more efficient.