Overcoming Hard Truths About Construction Project Management

Every field brings its share of “you’re-not-gonna-like-this” news.

The global construction industry, like most businesses, is undergoing a transition from old ways to the new, technology-improved ways of carrying on business as usual. For over three decades, the industry has seen a myriad issues pop to the landscape—whether it’s labour inefficiencies alarming firms to underperforming projects, or longer haul systemic issues where many businesses still don’t adopt technology for easing on-site workflows.

Depending on where you are in your construction career, you’ll feel the ripples, particularly if you’re a project manager who has direct reports negotiating the daily struggles of a risk-fraught industry.

We break the silence on some harsh realities of the trade in this post, as we see more calls for concern echoing industry corridors.

Let’s buckle up our harnesses!

1. A small fraction of construction businesses taste true success

Project risks are increasing according to 78 per cent of engineering and construction companies.

Three second takeaway

Increasing material and labour costs combined with late projects ruin growth prospects for firms.

Backstory

Construction businesses play a high-stakes strategy game against developing risks.

Executives of large organizations in key sectors—energy and natural resources and public sectors—driving construction activities report a project failure rate of 71 per cent and 90 per cent respectively in the last financial year.

Enormous capital investments keep owners on the edge with upholding quality targets—and they’re not always met, much less within timelines. Many construction businesses struggle to maintain capital reserves through lean periods owing to risks caused by an unqualified workforce and unrefined equipment—and this phenomenon has been around for over three decades.

Only 35% businesses survive past their fifth year. Is that surprising? Hardly, when you think about the budgetary overruns up to the five years they’ve been in business.

How can we beat this setback?

Short-term strategy

Companies need to create meaningful opportunities for younger skilled labour through job training programs run in partnership with post-secondary institutions offering technical training in construction management and trades.

Long-term strategy

Companies need to stay open to business innovation. Being in one of the oldest industries that have an aging workforce, construction firms need to orient their teams with evolving methods of on-site communication and collaboration.

2. Hiring and retaining skilled workers

Close to 57 per cent of contractors report shortage of skilled workers.

Three second takeaway

Ensuring trained workers on sites has eternally haunted construction firms. Because there aren’t many and too few are willing to put themselves through safety risks very early on in their careers.

Backstory

Labour shortages concern 90% of U.S. general contractors.

The rate at which workers retire is way faster than new come in, which leads to project lags. An exponential demand of residential and industrial properties requires that a well-equipped workforce take over—and that’s a rarity at most firms.

Digitally-savvy millennials take off for less traditional careers.

Rigged immigration laws make valuable foreign workers flock to culturally advanced countries.

A growing employment gap weighs harshly on companies barely managing to stay afloat. More than 82% firms spent copious amounts toward hiring qualified workers in 2018.

How can we beat this setback?

Short-term strategy

While it’s unlikely that hordes of skilled workers soon become available to everyone’s needs, owners need to build employee training programs with contractors to better train existing workforce to adapt to new technology and advanced equipment.

Long-term strategy

The construction industry needs to hold consultations with the federal government to make way for skilled immigrant talent to find good work within reasonable timeframes.

3. Assuring quality with under-performing contractors

Poor contractor performance plagued 69% of owners’ projects.

Three second takeaway

Under-performing contractors are the only resort for most construction firms.

Backstory

Over 61 per cent of executives in construction-related sectors were coping with under-performing contractors. Across a wide range of construction projects, general contractors are forced to onboard untrained labourers for reasons cited earlier. Accompanying economic risks of slow-moving site approvals and increasing competition aggravate the workforce disparity. Aside from labour productivity, low worker morale and lack of structured work procedures can cause dysfunction at the very root of managing a project.

How can we beat this setback?

Short-term strategy

Contractors need to work around quick solutions with construction firms to get their staff up to speed with the latest work standards whether it’s technology or equipment handling.

Long-term strategy

Both parties need greater collaboration that brings onsite efficiency. While owners defer responsibility to contractors, they can co-manage projects beyond securing legal and financial interests of parties involved.

4. Safety risks on construction sites

Three second takeaway

Falls, trips, and muscle injuries are typical incidences on a construction site. It’s starkly unsurprising yet striking that many construction contractors have less-than optimal safety training programs.

Backstory

If anyone says playing it safe slows progress, then we’d say that part of achieving progress is staying safe. There’s no such thing as being too safe.

Falls, electrocution, being struck by objects, and being crushed—all “Fatal Four” hazards cause 64% of on-the-job construction fatalities. 651,279 deaths are recorded every year from hazard-induced diseases.

How can we beat this setback?

Short-term strategy

Obviously, beef up safety training across projects. Ensuring construction workers understand, follow, and enforce safety parameters should top agenda and nothing less should be acceptable with immediate consequences for negligence and denial.

Long-term strategy

Safety should reflect in the work culture. Transformative work behaviours are often the product of a top-down management approach where teams align business sense with evolving safety principles.

5. Project delays eating away productivity

Most megaprojects experience delays or budget overruns.

Three second takeaway

Hardly guesswork by now, improper planning and communication breakdowns afflict projects more than other associated reasons of poor productivity.

Backstory

Restoring past glory (before the 80’s) is lost upon the construction industry. 35% of construction professionals weekly spend more than 14 hours on non-optimal tasks ranging from project research to reworks. Add to that delayed delivery of materials across the project lifecycle. In 2018, an unproductive labour stripped the U.S. construction industry off $177 billion.

How can we beat this setback?

Short-term strategy

Not denying the importance of grunt work, project managers should introduce task management techniques using quality software to delegate and track productive and non-productive activities. 

Long-term strategy

As more construction management research becomes accessible to leaders, they can expect to incorporate productivity tools that bring more results out of less-intensive human effort in the future.

6. Weak communication hindering growth

Around 30.9% of construction industry professionals report that miscommunication stems from unresponsiveness to questions/requests.

Three second takeaway

When suggestions from construction workers are overlooked, they’re withheld even when they’re most needed to improve project management. Now that’s a territory that risks business sustenance and requires the leadership to amend communication loopholes.

Backstory

To turn around high employee turnover, companies need to turn around communication hurdles into opportunities. Traditionally, site managers have shown lack of interest in hearing concerns emerging from probable deficiencies, and that’s detrimental to both labour and business productivity. Giving employees a safe space to blow the lid off potential dangers has to become the norm, not an exception when things are about to come crashing down.

How can we beat this setback?

Short-term strategy

Employees find the most engagement in quality discussions acting as guiding principles to performing better work. Beyond in-house training, project managers have a responsibility toward improving financial prospects of employees to help them gauge growth up the ranks.

Long-term strategy

Studying employee behaviours through their progression will yield insights no amount of money can buy. Developing an ongoing camaraderie goes further than gaining brand endorsements from trusted partners, as your employees’ positive word-of-mouth will extend your brand’s life beyond known audiences.

7. Low technology penetration in construction activities

38% of construction businesses aren’t integrating current technology into systems.

Three second takeaway

Spending less than 1% of annual turnovers on IT services sets back 46% of construction companies in a digitized age.

Technology solutions including Building Information Modeling (BIM) and big data influence multiple critical components in designing and building structures.

Backstory

Emerging technologies like virtual reality, drones, 3D printing, and the IPD project management software have surfaced in response to growing inefficiencies.

40% of construction companies don’t get support for implementing technology due to hesitant workers. Another alternative challenge is company processes not fitting in with technology’s utility. An intricate mix of these challenges has deserted construction businesses in the good ol’ past. Working up to the point of maximum efficiency through technology may not be the reality for all firms but it’s slowly taking off with 57% professionals considering technology integrations.

How can we beat this setback?

Short-term strategy

A great way to start would be adopting construction management software answering budgetary restrictions and unique business needs.

Long-term strategy

Building a technology solutions department would help companies keep pace with emerging technologies.

8. Bloated tariffs spark anxiety in contractors

Material costs have seen a 10-12% rise over the past year with future costs slated to increase even more.

Three second takeaway

Despite the U.S.-China trade war everyone’s had too much of, tariffs on material costs have grown over the last few years.

Backstory

Not only have material costs seen an uptick, but the unavailability of concrete products including aggregates and cement has dented the market’s equilibrium.

How can we beat this setback?

Short-term strategy

While controlling market-induced prices is out of hand, companies need smart supply chain technology eliminating middleman costs.

Long-term strategy

Making room in construction budgets with a year’s buffer would help companies manage unexpected cost increases without harming productivity.

9. Working overtime, working monotonous tasks stunt morale

Research tells that when employees work overtime for four weeks or more, every one additional hour over 40 hours per week causes a one per cent loss of productivity.

Three second takeaway

Due to labour shortages crippling construction businesses, the resultant slack gets off loaded on already-overworked workers causing shortfalls in productivity and quality.

Backstory

Labour deficits have grown acute and that’s not a recent phenomenon. A palpable lack of skilled workers impedes steady business growth when existing resources are maxed out with less-than-optimal quality benchmarks met as a result. Outsourcing work to multiple contractors creates co-ordination lags for owners looking to improve project success rates.

How can we beat this setback?

Short-term strategy

Construction companies need to enforce overtime regulations to appropriately compensate workers. Hiring independent contractors to even out work distribution would greatly cut back overtime hours required on seasonal demands.

Long-term strategy

Companies must conduct an internal review of work policies to reshape work schedules. Working to manage overtime hours with an accounting professional would erase the need to overexert workers.

10. Reworks breed job burnout

82% owners believe more collaboration is needed with their contractors. 

Three second takeaway

Change orders in construction frequently set back productivity. Due to many reasons, from poorly written proposals to miscommunication, contractors face the prospect of redoing construction plans. Wondering how change orders come about? Watch this handy video whenever you’re confronted with a change order.

Backstory

Faulty designs have spawned 70% of total reworks in construction and engineering products. Exercising due diligence in estimating costs helps avoid taking on unprofitable work, which is a purported cause for workers feeling burned out.

In 2018, an estimated $31.3 billion worth of reworks was caused by poor project data and miscommunication.

How can we beat this setback?

Short-term strategy

Start training workers on Business Information Modeling and Integrated Project Delivery and measure quality control monthly.

Long-term strategy

Schedule quality training periodically will help employees acquire critical skills to keep up with emerging trends.

Although the industry falls in and out of these scenarios, you’re about to create real change with these insights to keep your projects on schedule and under budget.

If we’ve missed dropping a construction project management truth bomb, please let us know in the comments below!

Gagandeep Bimbh

Gagandeep Bimbh

Gagandeep Bimbh is a digital content strategist invested in weaving context-rich stories intuited on the changing needs of diverse audiences. His words are guided by strategic writing principles acquired over the last four years working with communications firms and digital marketing agencies. This article was written on behalf of Procore, a world leading construction management solution.

Leave a Reply