Industry Trends Shaping 2017: Construction Business Strategy
Every time a new year rolls over, construction business owners and contractors approach the upcoming 12 months with a calibrated balance of optimism and trepidation. This year’s election cycle closed out a tricky second half of 2016, but regardless of political affiliations or eventual outcomes, construction leaders will need to charge head-first into 2017 to make profitable waves. With incredible industry technology on the horizon, construction professionals are changing their processes and device integrations at the speed of light, but unfortunately adopting actionable, “boots on the ground” level strategies always lags behind. Wide-sweeping change in this industry is difficult to implement given entrenched methods and “old-school” processes – you must unite different generations of employees, augment their behavior patterns, create new work habits, and then track the results to ensure your business is headed in the right direction. Industry leaders create strategic plans to give context and direction to their year – so how do you implement these strategic hallmarks in your business?
Data – The Main Driver
Businesses small and large sit atop a foundation of operational information…their profits, losses, materials costs, labor costs, customer contact information, bids, wins, etc. By no fault of the industry itself, construction businesses typically lack the systems, staff or tech capabilities to organize, categorize and distill conclusions from that volume of data. To streamline your operations in 2017, you have to strategically gather and analyze this information, asking yourself questions like the following to make sense of the metrics:
- What drives your strategy for success? (Productivity, Penetration, Customer Feedback)
- What drives your end users’ decision to select you? (Supply Surplus, Customer Service, Availability)
- What macroeconomic forces are at play in your target market? (Income Purchasing Power, Population Changes, Land Costs)
These questions give a background and context to the numbers, guiding you to make certain decisions to prioritize outreach, customer service, and labor initiatives within your own company.
Labor – The Good, Bad, and the Ugly
Fact: There’s a labor crisis in the construction industry right now. Depending on where you stand as an individual, the crisis is either good, bad, or really ugly. We have an aging trade-based workforce with low numbers of stimulation and replacement from younger workers looking for stable jobs. Despite this, many people are forecasting growth in 2017.
Market forces dictate labor trends in supply, limiting company capabilities to influence the labor market. In some scenarios, companies can properly staff projects to completion, which gives their labor force a baseline in terms of productivity and manpower. However, when companies are strapped for laborers, they become “overextended” on the jobsite, which leads to corners being cut, high-stress levels, low morale, and more mistakes & accidents.
In 2017, you must take a proactive stance on labor development. Take your best in-house professionals and give them performance-driven compensation bonuses. Rewarding high-performers is essential for retention, and if you are successful in maintaining a workforce of stable, highly-motivated performers, your own firm becomes a desirable talent magnet for local associates. Reach out to local high schools, technical schools, community colleges, trade schools, and vocational colleges to plant the seed in people’s minds. Inform them about the financial incentives on the table in the construction world, but also be sure to solidify the importance of continued training and career development within your own company.
Innovation – Wielding the Cutting Edge
It goes without saying that tech has changed the ways the majority of us do business. Many construction business owners want and claim to be on “the cutting edge,” but do not properly manage their tech innovations and processes in a way that adds value to their business. Technology allows us to sample more and more business data, but construction business owners need parallel innovations in process management to create order in the face of chaos.
Innovations like GPS technology, data modeling, drone technology, automation, prefabrication, and modularization aren’t new concepts – but leveraging them effectively could benefit your operation in two ways. One, these innovations can revolutionize the way you collect, process, and make sense of data by giving you new touch points and collection centers to interact with the building blocks of labor and materials. Two, these innovations attract the very best in talent – experienced, engaged employees want to work a position where the full arsenal of innovation is at their fingertips.
Are you using innovation to leverage improved productivity, enhance on-the-job performance, and drive a better finished product to your customers? Once you commit to being on the cutting edge, you must properly wield it to hack through the noise and bring about change and efficiency.
About CSLS:
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