As with any industry, construction has its fair share of challenges over the years. Yet these days, there appear to be some problems that are continually plaguing the industry.
It doesn’t matter whether you run a business offering structural engineering services or are a self-employed general contractor with decades of experience under your belt. It’s highly likely you’ll have experienced some hurdles that affect your business each day.
If you’re curious about the problems other contractors and businesses in the construction industry face daily, this article is for you. Take a look at these problems the construction industry as a whole could do without for further enlightenment:
1. Shortage of skilled construction workers
Arguably one of the biggest problems facing virtually all of the construction industry as a whole is the shortage of skilled workers. Sure, there are plenty of unskilled workers you can hire for your project, such as laborers.
But, there is a noticeable decline in the pool of skilled construction workers available for hire. One of the reasons for that is because young people fresh out of high school are getting persuaded to follow other career paths instead of vocational trades like construction.
It’s a big problem that affects the construction industry on a national level. However, the good news is many companies are finding creative ways to tackle the problem. One such example is by offering mentorship schemes to high school students and college graduates.
Another way that some construction firms are getting around the lower amount of available skilled workers is by using staffing agencies. Those companies typically have unemployed or available skilled workers ready to work, sometimes from neighboring areas.
2. Poor supply chain management
Another headache for much of the construction industry is when there are problems getting the raw materials needed for new projects. Promises to deliver items for a specific schedule often get broken due to issues within the supply chain.
Construction companies will typically source their materials from a builders’ merchant. In turn, they order products from wholesalers, and those wholesale companies usually get supplied direct by places such as lumber yards and metal fabricators.
So, with all that in mind, why are there issues with supply chain management? One of the problems is simply down to bad customer service.
Sadly not everyone involved in construction’s supply chain management is college-educated from places like Norwich University. Because of that, some individuals are unaware of how to make processes efficient or how best to meet customer demand.
Supplier relationships can sometimes get affected by external forces, resulting in the partial or complete cancelation of orders within the chain.
3. Communication breakdowns
If everyone communicated properly with each other, it’s likely there wouldn’t be so many problems in the world. Sadly, that’s unlikely to improve much any time soon, and that is especially so in the construction industry.
You may not realize it at the time. But, when things go wrong on construction projects, it’s almost always due to a communication breakdown somewhere along the way. There could be miscommunication between colleagues, sites, or even between yourselves and suppliers.
Fortunately, there are ways to limit the likelihood of communication breakdowns. For instance, virtually all people on construction projects has a mobile phone. In fact, around 72% of all Americans has a smartphone.
To that end, you could ensure that communications between your employees and contractors take place by email, text messaging, or dedicated construction industry job costing apps such as JobFlex and project management apps like e-Builder.
Of course, there’s no guarantee that those methods and examples will completely eradicate communication breakdowns within the construction industry. But, they will help to lower the likelihood of communication problems from happening significantly.
4. Unreliable contractors
Many construction industry businesses hire contractors to carry out specific tasks on projects or to assist existing workers during staff shortages. It’s not an unusual situation to find yourself in; it’s quite commonplace across the industry.
Being able to hire contractors, especially at short notice, is quite good for the construction industry as it means firms can meet deadlines and avoid delays. At least, that’s what is expected to happen in an ideal world.
Unfortunately, we don’t all live in an ideal world. We live in one where contractors can often be unreliable. The reasons vary. But, they’re typically due to circumstances beyond their control. Or the fact they’ve overcommitted themselves on projects and are falling behind.
There are some ways that construction companies can avoid working with unreliable contractors. One such example is getting recommendations from materials suppliers and vendors.
That’s because they’ll have a good idea of which contractors consistently do good work and turn up on time, and the ones that everyone should avoid like the plague!
5. Insurance costs
There’s no denying that insurance can cost construction industry firms and contractors a lot of money. Such costs often represent some of the biggest regular outgoings for those businesses.
With that in mind, why is insurance so costly for people and companies in the construction industry? One of the reasons comes down to risk. As you can appreciate, construction work is quite risky compared to say having an office-based occupation or business.
The risk of injury and death is quite high, even if you’re working on single-story projects. And because you’ll likely have several firms or contractors working on the same projects, accidental injury and negligence risk will skyrocket.
You are likely reading this and nodding your head in agreement. After all, there’s no way to guarantee how safe your contractors are when they work. Still, there are some steps you can take to lower your insurance costs.
One way is to get quotes from insurance brokers as they can often get special rates from insurers for their clients. You can also combine the types of cover you need and get them from the same insurance company to attract discounted rates.
6. Falling afoul of the law
Another sad fact of the construction industry is that many businesses and contractors break the law without even realizing it. Federal, state, and county regulations, and even city ones, often change without much notice to people working in the industry.
Let’s face it: you’d rather be out there earning your business money instead of sitting behind a computer screen all day long to check for updates to building code regulations, for example.
But, how can you keep abreast of any construction industry regulation updates when you’re out on the road working long hours? The good news is there are a few different options open to you.
One way to keep updated with changes to rules and regulations is by signing up for government and trade body newsletters. They will get delivered directly to your email inbox, and you can read them from your smartphone when you’re at a construction site.
7. Cashflow
Last but not least, one of the leading issues that affect many people in the construction industry is cashflow. Contractors, for instance, usually wait for payments from larger construction companies before they can pay their subcontractors and other workers.
And those companies may find cashflow is tough if they aren’t getting paid by property investors or other property owners for the projects they complete.
One option contractors and larger companies can pursue is invoice financing. In a nutshell, this is where a third-party firm pays you the money for any large invoices. They then chase debtors for payment, leaving you free from cashflow worries.
