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Challenges Facing Construction Companies Today. Pt.1

Have you ever heard the saying "I know sh*t flows downhill, but why am I always living in the valley?" I think this is one that can be attributed too many construction companies in the UK today.

Construction companies face a number of challenges today but probably the most common one is lack of resource. In some ways, this can be attributed to poor images of the sector. You know the ones,

Blokes hanging off scaffolding, with their trousers hanging low, yelling at women as they walk past the site and an industry seen by educationalists as a place for the less able students who "won't make anything of themselves."

In some cases the sector has promulgated these images almost as a badge of honour or as part of the "banter" that surrounds it.

Smaller construction companies are also put under more pressure by main contractors who have simply passed the resource baton to them, through their procurement and project delivery approaches. This enables main contractors to manage projects without having the responsibility of finding labour to actually undertake the work, preferring to pass that task onto their sub-contractors and supply chain generally.

Of course, the employment agencies are loving it. They are able to charge more for their labour, taking profit out of the job and making the medium and smaller construction companies the new "squeezed middle" of the 21st century. Hard working organisations that are not being rewarded for what they do, are having their profits eroded, sometimes through no fault of their own, whilst trying to manage the same sized projects with greater expectations, smaller margins and cost value.

However, the smaller constructions companies are also culpable. Sometimes, their lack of organisation and planning can let them down and the costs of failing to internally manage their processes and people contribute to reduced income and profit margins.

So, what needs to happen? The one certainty is that these problems, cannot be allowed to continue, nor, are they going to be solved overnight. However the industry is attempting to improve its image through a number of strategies.

There are construction companies who are attempting to engage with their communities, work with schools and colleges to help them understand the roles required in the sector over and above those of the bricklayer, joiner etc. The CITB as an industry organisation is also driving a new approach through a number of initiatives. Go Construct and Be Fair, being just two of these are methods of encouraging people who might normally consider a career in construction to at least consider it.

Sadly though, much of this is on a, what can be considered a small scale in the national scheme of things. That said, the longest journey can begin with a small step!

In my opinion there needs to be changes in approach in two areas. The industry itself and educational establishments. The sector needs to reach out more to its community and educational establishments. Educational establishments need to understand more about the sector, its complexities and the opportunities that can be created for their students.

Simple really, as a well know advertising campaign would put it.

We know there is much more to it than that though, don’t we? The challenge I’ve conveniently left out of this piece, up to this point anyway, is time. Time to make it happen. Time to go and network and speak to different people. Time away from the office and the projects that have to be delivered. Time to bring new people into the industry and help them get the skills and knowledge they need to have. Time costs money and money as I’ve said earlier, is at a premium.

However, what happens if we don’t take the time? The skills gap in the industry will only get worse and not better. Companies will still struggle to recruit not only, site staff, but, project managers, estimators and quantity surveyors. Not only, does the skills gap widen, but so does the experience gap.

I have one client, where there is at least a 20 year experience gap between project managers. Now, I suppose for people who don’t want to retire at 65 then that’s a good thing. But in actuality, and for the good of the sector and the companies that operate in it, maybe it’s not so good?

Senior managers (in all the roles above) are in their 60’s. Their less senior colleagues are in the 30’s (at best). This company is having to succession plan quickly and perhaps this may result on more pressure being put on people at both ends of the process. Pressure on the senior colleagues to help the others and, pressure on the others to take on more responsibility, maybe when they’re not quite ready for it. Pressure on HR to find people, where in reality, they don’t exist, or the ones that do, can demand increased salaries and benefits which needs to be set against the income and profit challenge. And, all of this when time is at a premium. If I was a doctor and the sector was a patient, I’d say the prognosis for smaller and medium construction companies was not good.

However, if we look at all of this, despite what I’ve written, it is not unsolvable.

What it needs is change. Change of approach from senior managers. Change of approach in how we recruit (and retain) people. Did you know that only 3% of people working in the construction sector come from ethnic minorities? Are you missing out on capable people because of some unconscious bias, that people from ethnic minorities don’t work in the sector? Change of approach in bringing people into the industry and supporting them to get the skills and knowledge required. Change, in how we manage our site environment by embracing technology that might speed up how we communicate and exchange information. Change, in how we work with our supply chain to help them improve their approaches on all of the above. Not just simply demanding improvements and then leaving them to find the solutions.

The challenge is that while the sector does want all of the above, the drive to make it happen is less obvious. The mind is willing but…..

Stay tuned for part 2 next week.

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