For the construction industry, adapting to COVID-19 has meant strict hygiene and safety practices have had to be implemented into everyday work. Below, we have delved into some of the key issues facing the construction industry now.
- Shortage of Skilled Labour Force
In construction, the expertise of workers is extremely important. At the moment and even prior to COVID-19, there has been a growing skilled labour shortage. Unskilled workers can cause costly errors, create bad impressions with clients and culminate in delay, stress, and frustration with a project. It’s therefore important to retain skilled workers.
- Inadequate Cash Flow
There are no shortage of payments to be made to contractors, employees, and suppliers in a construction project’s duration; resulting sometimes in poor cash flow. To prevent this or manage poor cash flow, you need to properly budget for projects.
- Poor Planning & Safety Risks
Safety hazards and inadequate planning or foresight can result in delays, loss and even lawsuits. It is therefore vital to have a plan in place for a project to map out hazards and risks; helping to remove errors and danger.
Communication is vital for keeping the team on a construction site in the loop and on the same page. Without communication, a project can run into expensive mistakes. Communication can not only do this but also create stronger team efficiency/bonds and produce better results.
- High Cost of Insurance
For construction projects, insurance is essential as it is a high-risk industry and workplace. It will help to increase cashflow and reduce costs if you shop around for insurance.
- Equipment Breakdowns
Maintenance on machinery is vital and studies have shown that equipment breakdowns are a big contributor to issues in a construction worksite. Therefore, keeping equipment maintained will help avoid issues and ensure the smooth running of a site.
- Document Management
There are an abundance of documents for construction companies to deal with. It is important that these documents are managed effectively. Utilising recent technological innovations; document management software, for example, can help reduce time wasted on sorting out files.
- Lack of a Business Plan
Like any business, construction businesses should have a business plan. When there is no plan implemented, that is when issues can occur; as they are unforeseen and unaccounted for in planning. Making a business plan should, therefore, be a priority. We at the Quinn Group can assist you here in providing you with a business plan template.
- On-Site Theft & Vandalism
Theft and vandalism on construction sites is becoming a more costly issue that is gaining prevalence in the industry. To avoid and protect against this, you should consider a security risk management review which may involve increased lighting and static security on site.
- Small Profit Margin
Increasing profits or maintaining appropriate profits has always been competitive in the construction industry. Expenses are high and sometimes unpredictable with clients always tendering for better prices. To keep your profit margin from shrinking, review your expenses, save or discount, follow up outstanding invoices and do not offer discounts you cannot actually afford. Ensure all variations are properly documented and passed onto clients.
If you require assistance with respect to the points raised above, you are welcome to contact our team of experienced accountants and lawyers by clicking here to submit an online enquiry form or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange a teleconference or appointment.