The dreaded word is only said in hushed tones around the office: recession. It has been a wild ride for the construction industry from just around 2006 to as recent as 2011. The downturn of the market challenged construction companies to innovate, offer more niche services and diversify their skill sets tremendously in order to ride out the waves. Looking forward, 2016 has been filled with promises of regrowth and booming production rates. However, the construction industry as a whole is not naive, and is looking to anticipate warning signs and challenges before they become an issue.
The Associated General Contractors of America (AGC) have surveyed over 26,000 construction firms to determine the top three challenges that the industry should be aware of: labor, competition and regulations. Here what your company should know, and how you should championing these issues and make them opportunities to your advantage.
- Labor
First, the good news: according to the AGC seventy-one percent of construction firms say that they will increase their headcount in 2016. However, with that mind, it is clear that experience workers are getting hard to come by with the baby boomer generation retiring. The ACG reveals that seventy-percent of firms have a difficult time finding qualified workers, including salaried and craft professionals.
Not only does the shortage of qualified workers create a challenge for accomplishing jobs and projects, but it also is a threat to workplace safety. The AGC survey reported that forty-seven percent of firms report that inexperienced skilled labor and worker shortages are a major challenge to the safety and health of workers.
The opportunity at hand is training. Invest in training this year, and it will put you ahead of the curve.
- Regulations
Healthcare seems to be the buzzword of the past eight years. With all politics aside, it is a reality that eighty-one percent of firms report the cost of providing healthcare for their employees increased in 2015, and expect costs to increase more in 2016. This is something to be mindful of when planning budgets and looking how to allocate funds. This could potentially be challenging as it does not leave a lot left over for pay increases to entice more qualified workers.
- Technology and Competition
In a generation where toddlers are fluent in the uses of iPads and smartphones, there is no room for a lack of technological innovation in the construction industry. Cloud technologies are no longer just for early adopters anymore, in fact this year sixty-three percent of companies have adopted cloud-based technologies. Email and file-sharing sites are still the predominant methods of collaborative technology, however, a main risk and challenge facing these tech savvy companies is security. This past year, seventy-five percent of companies have now installed an IT security plan in place to protect against hacking.
The challenges facing the construction industry this year are real, but not insurmountable. In fact, if played properly, all three components are simply areas for strategic opportunity. What are other challenges that you see this year, and how will you tackle them?
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