An Industry of Change and Variables

You could say the construction industry sees even more change than the National Cabinet. In fact, the only thing that is somewhat predictable in this great industry of ours is that change will come and come again.

Let’s take a look back at some of the changes we’ve seen in the Australian construction industry over recent decades and what elements of contracting are within our control.

There is nothing permanent except change

In my last article I discussed:

• Customers expecting shorter deadlines and build time
• Contractors encountering more red tape than ever before?
• Increased risk all round
• Increased competition?

But, what else has changed?

Technology

Writer Alvin Toffler once called it “The great growling engine of change”.?

Construction is not always the fasted adaptor to new technology, however, as with everyday life, technology has certainly advanced at an impressive and noticeable way in the construction industry.?

An ageing workforce

Apprentices are getting into the game later and that means freshly qualified tradies are getting older. The knock-on effect of this is older foreman, supervisors, etc. Now there’s nothing wrong with older workers – not at all. But when there are lower rates of younger recruits entering the industry and replacing retiring tradies, you can see how skills shortages can become a problem in this cycle.?

On another note, combining rapidly advancing technologies with an ageing workforce can present its own challenges. But more senior contractors don’t have much of a choice when it comes to resisting this kind of change.

Degree's - vs - Site Experience

We’ve touched on this before, but let’s look at this breed of construction professional again. One could argue that the industry has lost some of those kids we’d normally be taking on as apprentices to university courses – where they’re essentially learning to be construction managers, project managers, and the like. And hey, that’s great that these kids are going to Uni, but where does that leave us on the ground and in the field? We’re now working with managers who have never picked up a tool or spent a day actually working on site in their lives.?

‘Streamlined’ processes

Off the back of my last point, there are a lot more cooks in the kitchen when it comes to medium and large projects these days, and with a percentage of those being without field experience – we’re seeing more processes created and others “streamlined” without the input of experienced contractors or tradespeople. So naturally, some of these processes tend to over complicate things rather than simplify. In some cases, we’re seeing examples of documentation, plans, and the like that are lacking in quality and accuracy.?

Bigger picture changes

That’s right, it’s now widely accepted that the earth is in fact NOT flat, and that climate change is real! Yes, a real thing! And that means we’re now having to change the way we plan, work, and build to accommodate environmental concerns.??

And if I had written this article a decade ago, you’d probably never believe what I’m about to say, but right now – in 2022 – we’re working around materials and skills shortages during a global pandemic and rapidly rising inflation. Now I know that pandemics and inflation aren’t new, but most of us in the Australian construction industry today probably can’t recall a time when an international health emergency had such profound impacts on our ability to access materials and skilled workers.??

To control or not to control

With so much change and little predictability – especially in a post-2020 world, it might feel like there are just too many variables in contracting and not much within our control. It might also feel like it’s hard to determine where to invest your time and resources when it comes to potential obstacles to our success and profitability.

So let’s talk about this for a moment.?

What is out of our control? Weather, natural disasters, global pandemics…. Big things like these are so far out of our control they’re really not worth spending too much time worrying about. BUT, the outcomes of these uncontrollable events CAN be better managed with some solid planning and processes.

What is within our control as contactors in the construction industry? Thankfully, plenty. The list of elements within a contractor’s control is long. But, let’s look at three main areas:

• Your team
• Operations
• Client or Customer Management?

Your team

In my opinion, your team is one of (if not THE) most important of the elements within your control. Your team can make or break your business.?

So what is within your control when it comes to your?team?

• The size and diversity of your team.
• Training – think formal and informal training, on-site training, ongoing and refresher training, etc.?
• Retention of staff – what can you do to keep your staff happy and engaged
• Team attitude and behaviour – make your expectations clear here and model the behaviour you want to see.
• Managing staff expectations – communication prevents so many problems, and over-communicating is more ideal than under-communicating when it comes to managing your team.

Operations

What about?operations? What can you tighten up there?

• Policies and procedures – get in some professional help if you’re unsure of what your business needs, and what may not be working so well anymore.
• Work Health & Safety protocols – this is SO important. We can never overlook this aspect, and it can really come back to bite you if you do.
• Planning and scheduling – also really important, especially in terms of your cashflow.
• Quoting and estimating – be strict with this, every time. Follow your defined process as closely as possible, and stick to your company policy.
• Marketing – another area that has changed rapidly and continues to do so alongside technology. If advertising and marketing is a bit outside your realm of expertise, consider getting some professional help with this also.?

Client Management

And finally, but most importantly… client/customer management:

• Client communications – a lot of misunderstandings or hiccups with clients could be avoided with more consistent, crystal-clear communication. Leave nothing up in the air, and – when in doubt – get it in writing.?
• Contract management – make sure your contracts are also crystal clear and have the appropriate clauses to cover yourself and the client, should things go wrong. If the contract is not your own, go over that thing with a fine-toothed comb and keep your eyes peeled for anything that leaves you vulnerable. Remember, it’s ok to decline the work.?
• Managing client expectations – this comes hand in hand with communication. Get the communication flowing and your clients should have realistic expectations. If they don’t, it’s up to you to clarify.
• Knowing when and how to decline work – if the risks are too high and the contract leaves you unacceptably vulnerable, choose to decline.
• Knowing when and how to bid for work – make sure any work you bid for ticks the right boxes for a job worth taking on, and then bid wisely. Don’t jeopardise your bottom line too much – especially if the risks are on the higher side. If you need help with tender processes, get a professional on board.

So the message we can take away is this: YOU decide what elements of business you control and how you go about that. There is a LOT you can control in this ever-changing industry of ours. Where you invest your time and energy is up to you. Do you invest in your team first and foremost? Is it worth considering getting in some professional help to set up some policies and procedures that will work FOR your business and not against it? Only you can decide. But decide you must, otherwise you risk leaving too much to chance.

So there you have it – change and variables. If anybody ever said the construction industry was boring, they just weren’t doing it right!