Top 12 Construction Issues & Industry Challenges
- 1. Keeping up with compliance regulations
- 2. Working on a schedule
- 3. Slow technology adoption speed
- 4. Communication problems
- 5. Managing your documentation
- 6. Issues with cash flow
- 7. The problem of “pointing fingers”
- 8. The lack of a skilled workforce
- 9. Vandalism/theft on site
- 10. Irregular equipment maintenance/replacement
- 11. “Forgetful” clients
- 12. The lack of reliable subcontractors
The construction industry has been living through an exciting phase of its life, growing nonstop and facing many challenges at the same time. Some of these challenges are relatively new; others are as old as the industry itself.
There are several different approaches to construction issues, as well. For example, sometimes slow technology adoption rates are treated as a single big challenge, and sometimes it is treated as a multitude of different problems – including communication problems, scheduling problems, problems with documentation, and so on.
Now we’re going to go over some of the most significant issues in the construction industry, starting with the problem of compliance in the world of constantly changing rules and regulations. Other issues are going to be mentioned, too.
1. Keeping up with compliance regulations
Technology is constantly changing and evolving, and various rules and regulations have to keep up with it. Keeping up with all that is not an easy task, especially since many companies are affected by many different levels of regulations. This includes worldwide compliance rules and country-specific laws and regulations, or even something extremely local and specific for one state or a single city.
It’s not uncommon for regulation update messages to get lost and unnoticed in a daily flood of work-related mail. And yet, compliance breaches due to unnoticed changes can easily turn out to be disastrous for most companies.
It’s a good practice to try and reroute regulation-related messages to a specific place where you can find them easier. Additionally, some people tend to dedicate a part of their day to catch up with regulation updates and rule changes.
2. Working on a schedule
While the experience does matter, it’s not uncommon for even the most knowledgeable professionals to make mistakes when scheduling if managed manually. This is a problem that modern-day technology can mitigate to the highest degree, with various automation systems, project management applications for different devices, virtual task boards, and so on.
This is one of many problems that modern technology and its advantages are either partially or entirely solvable. However, this list would not be that long if it wasn’t for another massive problem that the entire construction industry has been dealing with for a while now.
3. Slow technology adoption speed
The majority of the construction industry has a notoriously lousy technology adoption speed, and the problem has remained chiefly for several years now. Even though many business owners can acknowledge various benefits that newer technologies are capable of providing, it’s still fairly common for technological departments of construction businesses to have relatively small budgets.
There are many different departments and advancements that are rarely being used by a lot of companies, including:
- Internet of Things;
- Drone surveillance;
- Robots, and more.
What’s ironic is that these technologies are extremely useful at counteracting some of the oldest problems in the construction industry. As we’ve mentioned before, one of these problems is scheduling – but it’s not the only one on the list.
4. Communication problems
A surprisingly high percentage of problems within a construction project is directly related to the lack of faster communication between different teams and departments. This is another massive problem that is easily solvable by modern-day technology in multiple ways.
For example, your workers’ smartphones can be used to make the communication process that much faster (since there are billions of people that have access to a personal smartphone in the world) – be it via emails, regular messages, or even using various construction-related apps.
This can easily prevent most of the more minor problems in the project before they become more prominent and harder to deal with. And it’s also one more example of technology bringing massive potential benefits to construction companies. On the topic of technologies, we’re missing one more major field of work with the same potential solution.
5. Managing your documentation
It’s no surprise that construction generally has a lot of documentation to deal with – be it contracts, receipts, insurance certificates, material orders, etc. Dealing with all that regularly makes the entire process of document management slower and more prone to human error.
At this point, getting your entire business to work primarily paperless is something that should’ve been done for a while now. There are many different systems and solutions that can help with document management in many ways – be it categorization, due dates, project deadlines, and more.
That being said, not all of the problems and issues of the construction industry are easily fixable or technology-related. Our next construction issue is a clear example of that.
6. Issues with cash flow
As a construction company, you have to have free cash to pay for several things on a semi-regular basis. This list includes payments to subcontractors, vendors, suppliers, your employees, and so on. However, it’s quite likely that you’re going to get a payment for a project well done only once – after the project in question is completed.
Funds management is a surprisingly common problem for many construction companies, and the number of issues that this can spawn is also impressive. The only viable solution for these kinds of issues, aside from “getting a steady cash flow” (which might not be feasible in some cases), is to have an open business credit line for “worst-case scenarios” or to get through that challenging period between your bills being due and your project is completed and paid for.
Financial questions are not the only ones you have to deal with when working on a construction project. Another relatively frequent problem comes from the unwillingness of people to take the blame for anything.
7. The problem of “pointing fingers”
It is statistically impossible for construction projects to always go smoothly and with no problems whatsoever. And when a problem happens – the finger-pointing begins, more often than not. For example, the contractor points fingers at subcontractors, the client blames the contractor, and gets reprimanded by the project manager.
This kind of finger-pointing (or the “blame game,” as it’s sometimes called) is completely pointless and only prolongs the time frame between the issue and the time when it gets resolved. This is why there’s a specific policy that can help with a problem like that – a builders risk policy.
A builders risk policy is a type of property insurance that covers the majority of possible problems that may or may not happen during the construction process – from vandalism and theft to natural disasters and extreme weather conditions.
This can also be elevated to cover for some more questionable actions, such as the client claiming that they did not like the work after it was done and citing a contract breach. In these cases, a combination of a liability policy and Faulty Workmanship Coverage can protect your side of the deal from paying extra for a project with a pre-established price tag.
Unfortunately, there comes a time when there would be problems with a project on your end, and it’s quite likely that the following construction issue is to blame for that.
8. The lack of a skilled workforce
This might be one of the biggest problems of the construction industry to this date. And this one also gets worse with each year – with fewer and fewer young people interested in working in the construction industry and older employees being closer and closer to their retirement days.
The demand keeps growing regularly, and the problem is pretty much worldwide by its nature. While some initiatives are attempted on that level to fix this problem, it’s also possible for actual construction companies to try and mitigate the effects of this issue for themselves.
Two of the biggest potential approaches to this are mentoring and construction staffing agencies. Mentorship can work for both inexperienced students/college graduates and for existing skilled labor, allowing for more potential employees to be brought in. On the other hand, staffing agencies are tasked with covering most of the recruiting and pre-screening, offering workforce exactly when you need them.
There’s also another construction issue that is mostly connected with people in general – no matter if they’re a part of your company or not.
9. Vandalism/theft on site
Theft and vandalism are issues that are not typically associated with the construction industry – and yet, this problem has been out there for a while now and shows no signs of stopping. It’s especially bad for the construction company in question since each missing or unusable material would decrease the overall margin of a project.
Fixing this problem requires some investments in your regular surveillance equipment, such as fences, cameras, alarms, more lighting on-site, more closed containers to store materials in, and so on.
Additionally, there’s another problem with the construction on-site that needs to be mentioned, even though this one is more of a tracking problem.
10. Irregular equipment maintenance/replacement
One thing that many companies tend to skip over is construction equipment costs – or maintenance/replacement costs, to be specific. It is also one of the biggest reasons for project overrun costs since replacing your equipment mid-construction means additional expenses on your end. Additional expenses are easily transformed into less revenue from a project – and the construction equipment tends to cost a lot of money.
Some of the means of trying to fix this problem include keeping a close eye on equipment that begins to show signs of malfunctioning all of a sudden and being quick on your feet if your equipment breaks down mid-construction (to replace it as soon as possible, be it via an equipment loan or using your funds).
That’s not to say that equipment costs are the entirety of project overrun costs – it can also happen due to a client “changing their mind” at the last minute.
11. “Forgetful” clients
This issue is somewhat similar to what we’ve discussed in the context of “pointing fingers” since it refers to a similar concept of clients. One of the most common cases here is for a client to request some change mid-project and then pretend to “forget” it when paying for the project completion.
The only way to avoid these situations is to get a signed change order for each change in your project if anything was requested after the initial plan was finalized.
Unfortunately, this kind of questionable behavior is not only limited to clients/owners. In fact, the number of unreliable contractors is far larger.
12. The lack of reliable subcontractors
This construction issue is the one that relies the most on networking and recommendations. The number of subcontractors on the market, in general, is massive, and it might be hard to pick one for the job based on their looks. A good way to avoid picking an unreliable contractor would be to ask your vendors or material suppliers for recommendations. Asking subcontractors you’ve worked for also works wonders on finding reliable communications.
It’s also recommended to check subcontractors’ licenses, general liability insurance and list yourself as additionally insured within their insurance before finalizing the hiring process.
The construction industry is quite old and has been through a lot. Some of the problems are extremely old; others have become more prominent in recent years and were not a problem before. In this article, we’ve tried to go over the most significant construction issues on the market, as well as some of the means of avoiding or eliminating them.