Explore strategies and insights for managing specialty contractor risk as the industry restarts with our exclusive infographic.
The last few months have been full of challenges, with the reverberations of COVID-19 being felt across the entire construction industry. But as projects have started to pick back up in recent weeks, predictions that the industry is poised for not just a resurgence but rocket-ship growth and transformation have become increasingly common.
The majority of the risk associated with jump-starting projects rendered dormant due to the pandemic will fall disproportionately on specialty contractors. These frontline workers were hit the hardest earlier this year when COVID-19 forced industry-wide shutdowns. Today, specialty contractors are bearing the brunt of the risk, both to business and skilled trade employees, as an influx of projects get the green light to restart. Subcontractors will need strategies for managing risk and deploying innovation in order to move forward and stay on top of future business demands, which is why we’ve created the infographic below. Take a look and read on to learn about risk management solutions for specialty contractors.
The State of Risk in the Industry Today
The effects of COVID-19 on the construction industry are diverse and widespread, with nearly three-quarters (72%) of U.S. CFOs surveyed by PwC reporting that the pandemic has the potential to have a “significant impact” on their business operations.
As more crews come back to the jobsite, specialty contractors face many new challenges that impact project delivery. Among the top construction industry concerns are project delays. According to a recent AGC survey, 59% of construction professionals surveyed said their projects have been delayed or disrupted. Another 49% cited supply chain uncertainty, reporting they’ve received delivery delay notifications from suppliers.
Moreover, safety risks remain a major issue for the industry, with 22% of firms surveyed claiming a lack of PPE, which has led to project delays or disruptions. And labor supply issues have plagued 25% of construction professionals, who report a lack of available craftspeople due to the pandemic.
Top Pain Points and Risk for Specialty Contractors
Beyond the industry-wide concerns that construction professionals are facing, specialty contractors are experiencing an additional set of issues, including preconstruction team collaboration, training and retainment of skilled workers, cost management hurdles, and more.
When it comes to preconstruction, a key issue for subcontractors is keeping track of all incoming bid information to ensure they don’t miss an opportunity. What’s more, teams are often being left in the dark on bidding performance, and might not know how they’re doing in the bidding process. With more projects restarting, there will inevitably be an influx of bidding with an increasingly distributed workforce. This will make it difficult for subcontractors to communicate and collaborate to stay on top of active bids.
Communication and Collaboration in a Remote World
Communication and collaboration are vital to the success of not just the bidding process but the entirety of a job. It can be difficult to keep track of all important information and which team members are working on which projects, especially with many more project members working remotely. Subcontractors must now navigate this process digitally. This will likely continue to be the new normal, with 49% of surveyed U.S. CFOs planning to make remote work a permanent option for roles that allow it. Gone are the days of walking down the hall or to the jobsite trailer and getting a quick answer from an estimator on the status of a project, at least for the time being.
Staying Safe on the Jobsite
While many general contractor teams are able to work remotely, specialty contracting firms and their skilled workers are typically the professionals risking their health on jobsites and completing the most dangerous aspects of construction.
To maintain the safety of trade workers on the jobsite, it’s important for specialty contractors firms to be diligent about identifying any potential on-site risks and ensuring safety guidelines are being met. In order to maintain safe sites, subcontractors need to double down on safety through innovations like mobile-friendly safety checklists and apps.
Labor Retention and Training
There’s no question that the pandemic has caused a dynamic shift in supply and demand when it comes to labor in the construction industry. With a higher percentage of their business costs tied up in labor than general contractors, the lack of available skilled professionals has hit specialty contractors especially hard. Already faced with a skilled labor shortage pre-pandemic, training and retaining workers in a remote or socially distanced way will disproportionately affect specialty contractors.
Juggling Multiple Projects in a Pandemic
Even in normal times, subcontractors are no strangers to juggling numerous projects while spending the majority of their time in the field. Staying up-to-date on the latest plans becomes especially challenging when getting these plans out to subcontractors without a paper handoff is the new normal. Since this handoff is critical to a job’s success, specialty contractors should aim to centralize project information and data to enhance transparency and reduce risk as plans evolve.
Managing Cash Flow
As the professionals who typically must front the cost of all materials until the completion of a job, specialty contractors are keenly aware of the importance of cash flow management. With projects being paused or delayed due to COVID-19, cash flow for many subcontractors has dried up, meaning that quick and complete payments are now more vital than ever.
Innovating to Move Forward in a Crisis
From data centralization to digital site safety management, adopting new technologies is essential to the future of the construction industry. This can be particularly difficult for specialty contractors, who are juggling the requirements of general contractors’ mandated software with their own lack of time to identify and roll out new technologies. Still, innovation will be critical to getting specialty contractors and their teams back to work safely, quickly, and efficiently. Across industries, leaders are already dedicated to this goal, with 22% of U.S. CFOs planning to evaluate new tools in support of workplace location tracking and contact tracing efforts to ensure the health and safety of workers.
Interested in learning how specialty contractors can manage rising challenges by adopting technology? Register for our webinar, “How Specialty Contractors Drive Collaboration and Deliver Quality” on July 9 at 11 AM PT/ 2 PM ET.
For specialty contractors, in particular, there are many ways to deploy innovation and adopt new technologies to manage the concerns brought on by COVID-19, including:
- Leveraging bid management software to help teams stay organized, win more work, and improve collaboration.
- Adopting a cloud-based takeoff software to help both reduce on-site interactions and improve accuracy.
- Utilizing field productivity software, which will help increase labor productivity and identify and resolve issues faster.
- Automating cost management workflows to help track payments and improve accountability. This is a priority for many construction professionals, with 40% of U.S. CFOs planning to accelerate automation and new ways of working in the future.
The construction industry, just like the rest of the world, wasn’t prepared for anything like COVID-19. Although the pandemic’s enduring effects on construction professionals are still unknown, committing to innovation and the adoption of new technologies can help specialty contractors manage risk and move forward as the world starts to build again.