The pandemic exacerbated a number of familiar construction industry challenges and introduced new ones. While the construction industry might be past the crisis phase when work came to a halt, many of the challenges that emerged over the last two years remain a thorn in owners’ sides.
Fortunately, construction is a business known for its resilience, which is particularly true for owners. Procore spoke with Greg Cashen, Vice President of Construction at Wood Partners, who offered an inside look at the most significant concerns keeping owners up at night, from rising costs and continued supply chain woes to the deepening skilled labor shortage, and the role technology plays in overcoming them.
Rising Costs and Supply Chain Woes Weigh Heavily
One of the most persistent challenges owners face is rising costs on everything from commodities to appliances. In fact, some equipment contractor costs have increased so much so rapidly that it’s difficult to ascertain why, making risk mitigation more difficult. Yet, if owners are to make a force majeure claim for some of these rising costs, they must understand the actual cause at the sub-tier level.
To navigate these obstacles, including never-before-seen supply chain unpredictability, owners are rolling up their sleeves and getting involved with procurement like never before. They’re using integrated supply chain management software, buying materials earlier than they would typically, and even offering deposits on materials.
In some cases, owners may even offer to pay the sub-tier supplier directly while writing guarantees to their commitments to ensure the subcontractor has procured the materials or equipment outlined in the contract. This helps companies avoid getting hit with a surprise price increase later if the subs cannot secure that pricing.
Technology as a Recruitment Tool in a Challenging Labor Market
The skilled labor shortage is another perennial concern among owners, particularly when it comes to finding qualified project management staff to run projects as well as skilled field staff. This is where technology comes into play as a recruitment tool and reduces the risk that often accompanies new hires.
“Having a technology platform that has become a de facto standard, and being able to recruit people who have a known skillset in that standard, simplifies the process of onboarding new employees,” explained Cashen.
By contrast, companies that have not invested in best-of-breed tools may find an uphill battle when onboarding new hires and can even lose out on top talent altogether.
The fact is that technology should remove layers of friction, not create additional barriers. When investing in technology, Owners will find more immediate value in a solution that’s familiar to construction professionals and easy to use. For Cashen, this solution was Procore.
“Nobody, prior to Procore, came with any enthusiasm about the tech stack you were using in a construction management operation. With Procore, it’s generally so easy to use that new employees get up to speed quickly, and employees that have used it come on board and can help develop new processes,” said Cashen.
How Standardization Enables Visibility and Mitigates Risk
There’s a lot of talk about standardization in the industry as a means of effectively reproducing working methods or processes from project to project. This lets companies know outcomes in advance, eliminating guesswork and reducing risk. Platforms do just that—they bring standardization to a company’s day-to-day operating procedures.
“Having insight as an owner into a portfolio of projects, I want to be able to quickly go into one system and see a foundational truth about where our projects are. Having a consistent set of standards for how we operate and a tool that enforces workflows to achieve those standards makes it easier for me to log in, look at projects, and get a real good sense, especially financially,” Cashen says.
The platform approach directly facilitates standardization, helping ensure processes that work are easily repeatable across the entire project portfolio, whether regional jobs or projects scattered around the country. Standardization also opens up a whole new world of visibility for owners, allowing them to get consistent views of project health from a unified login no matter where they’re located.
“We’ve effectively been able to manage projects where we had $300,000+ in the hole, and by rigorous project management and knowing where our financials were at any moment, we were able to mitigate that risk,” says Cashen.
Conclusion
The construction industry is adept at navigating the unforeseen. Yet as new challenges emerge, so does the need for new solutions. In Cashen’s case, he’s been able to mitigate risk and standardize processes through his investment in an integrated, easy-to-use platform that’s already widely adopted across the industry. Watch the video for more insight into how he’s been able to avoid surprise costs and stay on track.
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