Business
Safety

Business Survival in the Age of COVID-19

Unexpected setbacks are daily fare for construction professionals, but the staggering impact of COVID-19 over the past year is testing industry resilience like nothing before.
By Cybele Tamulonis
February 2, 2021
Topics
Business
Safety

Unexpected setbacks are daily fare for construction professionals, but the staggering impact of COVID-19 over the past year is testing industry resilience like nothing before. Since March 2020, contractors have been forced to address weak points in their business practices and rapidly embrace new solutions to keep workers safe—not just from the traditional risks that come with the job—but from a virus as small as 60 nanometers. Amid the subsequent shutdowns, layoffs and deaths of more than 401,797 Americans1, many firms have faced their most difficult decisions ever. Despite the obvious challenges, this trial-by-fire moment has inspired a digital transformation that portends lasting improvements in safety and productivity for the industry going forward.

After a year of economic and political turmoil, there is good news on the horizon. In December, the Centers for Disease Control and Prevention recommended that construction workers be next in line after frontline essential workers to receive the COVID-19 vaccine. That was followed in January by congressional approval of a second $900 billion federal stimulus bill that allocated $284 billion in forgivable loans to businesses with fewer than 500 employees—if it is their first draw—under the SBA’s Paycheck Protection Program.

These developments, combined with ABC Chief Economist Anirban Basu’s short but sweet observation—“2020 bad, 2021 good,” during CE’s 2021 Construction Economic Forecast webinar, could mean that as difficult as the past year has been, the lessons learned from the pandemic may very well serve as the impetus for construction firms to implement more organized and efficient business practices as they position their firms not only to survive in an increasingly competitive marketplace, but to thrive once more when the economy recovers.

To learn how contractors have been coping—while aiming for more business in 2021—CE reached out to both contractors and industry experts for their observations and advice.

KEEPING YOUR BIGGEST ASSET SAFE— YOUR PEOPLE

With global shortages of personal protective equipment, changing CDC guidelines and Occupational Safety and Health Administration regulations, the first few months of the pandemic were extremely challenging to say the least.

“Our leadership team was together at a meeting on Feb. 25, 2020, as the significance of the COVID-19 epidemic became brutally apparent. We pushed our agenda to focus on our response to the pandemic,” recalls Paul Hewins, president and CEO of Skanska USA Building. “We released our first EHS/commercial management advisory communication on Feb. 28 and instituted a corporate travel ban on March 2.”

Taking the virus seriously was the first step to keeping workers protected and jobsites open. Lobbying efforts by ABC and other industry associations were largely successful as construction projects throughout the nation were considered—to varying degrees—essential operations. The construction firms that worked most closely with health officials were largely able to continue business as normally as was possible. (See CE May 2020 issue, p. 16.)

“I was relentless in those first two weeks, partnering with ABC both locally and nationally, as well as writing letters and calling state health officials who were also confused to try to make sure that construction was deemed essential,” says Greg Schniegenberg, vice president of Helix Electric. “At the same time, we were working with developers and general contractors to implement safety policies on jobsites.”

In December, the CDC began monitoring a new variant of the virus that can spread faster and more easily than other strains requiring contractors to remain even more vigilant.

“With constantly changing guidance from the CDC and local health officials, we implemented a COVID compliance plan that detailed the locations of hand-wash facilities for each site on a colored PDF with directional stars that was posted onsite and distributed to all of our trade partners,” says Buddy Henley, president of Henley Construction Co. Inc.

Contractors should reexamine existing response plans continually as new guidance is received. For those firms that have not done so already, establishing a COVID-19 response team to implement health recommendations and monitor jobsites is critical to protecting workers while keeping the company in compliance and minimizing potential liability.

“As the guidance changes, we update our plans accordingly,” notes Hewins. “We are completely transparent and share all these plans with our trade partners and clients so there can be no confusion regarding the safety of individuals onsite.” The majority of Skanska’s work around the country has been deemed essential, and teams show up daily on jobsites for work.

We rely on careful safety protocols, additional PPE and consistent communication to protect the things that matter most—our employees, our subcontractors and our surrounding communities,” says Hewins.

For many national firms, the nightmare of different guidelines for different states and counties is an ongoing business reality that requires organizational know-how and continuous communication with health authorities.

“I have jobsites in seven different counties. San Francisco County health officials had much different regulations than Santa Clara County had implemented, for example,” says Schniegenberg. “I had human resources working hand in hand with me to figure it all out.”

In one memorable case, Schniegenberg worked with health officials to reverse the shutdown of Helix Electric jobsites over five stories high due to the shutdown of elevator use. “We did studies that showed when workers have to use the stairs in place of a lift or an elevator, it creates a lot of sweat and heavy breathing. I referenced studies on the evaporation and dispersion of sweat molecules and was able to convince San Francisco to open up projects over five stories with limited use of elevators. As a result, we could stagger our crews with no more than four people in an elevator and an operator to push the button. In the very beginning stages, we were able to open up construction by using data that suggested four people in an elevator with masks is safer than 100 guys using the stairs to try to go to their workstation,” Schniegenberg says.

Implementing new procedures combined with careful assessments on a case-by-case basis are what worked for Keller, Inc., according to Steve Klessig, vice president of architecture and engineering. “We had some people working near hotspots in Milwaukee so we adjusted our crews in that location, as opposed to crews who were working in more remote areas with no outbreaks whatsoever,” he says.

Keller, Inc. also weighed the concerns of individual employees. “One of my draftsman has two children with asthma,” Klessig says. “He thought it was in his best interest to stay at home for a longer time and I agreed with that. We think an individual approach makes more sense and is more responsive to our employees and their family needs.”

KEEPING TEAMS WORKING WITH CLOUD-BASED TECHNOLOGY

Information is power no matter what the industry, but in construction, the efficient flow of communication among all branches of your organization can be the crucial difference between boom or bust, especially during a pandemic.

As many states continue to cyclically shut down and reopen, many construction firms have transitioned office teams to remote work while keeping socially distanced field operations in the loop—all while maintaining the security of data and information. This has accelerated widespread adoption of cloud-based technology, which looks like it will be the saving grace of many businesses.

Henley Construction is one such company. “With the technology available, we have had some accounting and project management staff work remotely,” Henley says. “Software has come a long way recently to allow collaboration between many people in the same departments to occur seamlessly.” Digital signatures have allowed Helix staff to submit payment requests without the need for face-to-face interaction that risks the spread of the disease. “It’s also reduced the time, effort and resources that would have previously been expended to complete these tasks,” Henley adds.

“Though options existed before the pandemic, there’s been a significant uptick in SaaS and cloud-based software usage,” says Mike Ode, chief executive officer of Foundation. “Mostly, this was out of necessity, with workers suddenly shut out from their offices but still needing access to data to keep businesses moving. But what started as a necessary response is starting to become more of a general business necessity. Now that workers have more readily available access to data, it can get in the hands of the employees that need it, right when they need it.”

Accounting staff, for example, can check last-minute payment details from home while project managers can approve POs from a jobsite across town, without having to take an extra trip into the physical office or relying on more at-risk platforms—like email—to send and receive this kind of sensitive information.

“With SaaS and cloud-based software, team members can get everything they need directly and securely from the source,” Ode says. “Now that more companies have seen what SaaS options can do, it’s hard to see them giving up those benefits moving forward.”

According to the Bureau of Labor Statistics, before COVID-19 only 7% of workers had the flexibility of working from home. That number peaked at 35% early on in the pandemic and has been holding steady at 23% since November. This is not a sign of things to come—but of what is here to stay. After the pandemic has ceased to be an urgent health risk, workers who can work from home will continue to do so.

“Now that contractors have established remote access technologies, more and more employees will be working from home,” says Chris Porter, construction solutions manager for Prophix Software. “Many contractors have realized that their employees can be just as efficient—or even more efficient—working in a remote environment.”

Porter credits the pandemic with pushing innovative technologies forward that allow employees to be productive while working remotely. “Construction firms needed to have the communications and collaboration tools in place quickly to keep operations running. These tools are likely to become an integral part of working life in the future,” he says. “The home offices of many employees have been upgraded and the effort to share information seamlessly has been perfected to some degree, but the hard work involved in getting everyone on the same page has not been lost on the contractors tasked with getting such measures in place.”

Henley agrees. “While it was a shock at first, the pandemic forced us to adopt remote working as a viable way to do business,” he says. “The construction industry has always been a business of relationships. How we can build and maintain those relationships going forward while practicing social distancing has been reinvented virtually overnight.”

Even before the pandemic, Skanska was already moving toward flexible work arrangements for employees. “In doing so, we had already invested in the technology necessary to ensure employees were able to create a more flexible work schedule while remaining effective in their roles,” Hewins says. “The pandemic escalated this effort and put into practice something we knew many of our people wanted and, in some cases, needed due to personal and family arrangements.”

“Conversely, we also recognized that with so many employees working remotely for 10 months, there starts to be a loss in connectivity, spontaneous creativity and informal collaboration,” Hewins says. “We looked for ways to remobilize our offices and reconnect with colleagues.” Ultimately, each Skanska USA Building office was made responsible for coming up with a reopening strategy with stringent protocols, reconfiguration of workspaces and a rotation schedule to adhere to the maximum capacity of individuals allowed in each office. “Once reviewed and approved, those offices were permitted to welcome employees back with limited occupancy. We also worked in phases and shift rotations for flexibility,” Hewins says.

“The notion of working remotely doesn’t translate across the board, but there are functions within the construction organization that benefit from working remotely and assisting the broader team to deliver the value that they need to for their customers,” says Ajoy Krishnamoorthy, vice president of Acumatica’s construction division. “The construction industry has always had a challenge with having enough people to do the job, whether it’s in the field or working in the office. I think organizations are starting to realize that technology can help make these people more productive,” Krishamoorthy says.

Contractors that implemented cloud-based technology prior to the pandemic were better prepared for state-mandated remote work policies. Many businesses that did not have the ability to share data via the cloud suddenly found themselves scrambling to implement a virtual private network and engaging consultants to ensure the security of sensitive information.

Tooey Courtemanche, founder, president and chief executive officer of Procore, agrees that the last year demonstrated the value of investing in construction technology like never before. “We saw and heard firsthand that contractors who already had technology in place were better able to weather the storms and unforeseen changes of last year,” he says. “The greatest lesson learned is to prepare for what’s next, by investing in the technology, systems and processes that make businesses more efficient and adaptable to future changes.”

“There is no doubt that the health crisis we have had to navigate will have a lasting effect in the way we think about many aspects of the work we do,” says Frédéric Guitton, chief strategy officer for RedTeam Software. “The cloud technologies being offered to construction companies are becoming vital elements to providing the work flexibility that employees are looking for today and will likely expect going forward.” Guitton predicts that the days of processing stacks of paper documents are—and should be—numbered. “Leveraging digitization to help teams collaborate from wherever they are is becoming a necessity to survive, retain talent and manage risk,” he says.

Mauricio Barberi, chief marketing officer at CMiC, notes that during the pandemic many construction firms consolidated the number of technology vendors they were working with by moving to a one-stop-shop, cloud-based system—and he believes the trend is here to stay.

“With no integrations required, fewer technology relationships to manage, simpler upgrades and migrations, only paying for what you need, and scaling as needs—and users—increase, the benefits are obvious,” Barberi says.

“The investment that organizations have made to put their back office and field systems in the cloud was so they can now have access to all their data at any time,” Krishnamoorthy says. “From an application standpoint, once you have an environment like that, you will immediately start to see the benefits.”

“Without access to accurate information about cash positions, project profitability, working capital and more, construction firms are unable to make informed decisions about how to manage through this downturn or how to make business projections over the coming months,” Barberi says. “They may end up cutting too much—or not cutting enough as they struggle to get through the downturn and ensure they can quickly respond to the recovery when it arrives.”

Some of the hesitancy to switch to cloud-based data is due to the fear that sensitive information could be breached. However, as Mike Milligan, global head of marketing at GCPay, points out: “Cloud-based technology is very difficult to hack. Conversely, on-premise software applications are very easy to hack. Contractors should be looking at technology providers who have security protocols in place to guarantee that businesses will be running on a secure IT infrastructure and firewall. In the technology industry, cloud-based software as a service has the highest level of security protocol out there—much more so than on-premise technology.”

“Many firms turned to technology to increase profitability during the pandemic,” Courtemanche says. “They will likely need to double-down on those investments to take advantage of the rebound in construction spending that is expected in the period following the end of the pandemic.”
It’s never too late to get with the times. Contractors that haven’t already implemented cloud-based technology should be planning to do so.

FIXING WEAK LINKS IN THE SUPPLY CHAIN

Your PPE is in place to protect your workers, your jobsite is in compliance, but where are those building materials? Weaknesses in the supply chain were definitely highlighted in the first throes of the pandemic, a rude wake up call for contractors that pointed out the need for closer scrutiny of supplier relationships. Many construction firms that were faced with delays of up to six months for needed materials worked hard to ensure they would not find themselves in the same position again.

“Prior to issuing contracts, we conduct a thorough review of the schedule and availability of materials from the subcontractor. Provided certain conditions are met, such as place of storage and proof of insurance, we will pay for material to be stored to ensure we have what we need when we need it,” Henley says. “This requires our project managers to be a little more diligent when looking ahead at their schedule and communicating with subcontractors regarding material status.”

“A lot of our devices and commodities are from China, Mexico and parts of the United States where factories had been shut down for a month. When they reopened the demand was high, because construction had kept going,” Schniegenberg says. “What used to be a 12-week lead time to get something turned into six months. We always have a ‘Plan B’ and a warehouse where we can release materials earlier if needed.”

Using an internal team to mitigate supply chain issues has advantages. “Our team routinely surveys national and international companies to track impacted materials and equipment. This also allows them to debunk misinformation, a result of data and facts traveling—and altering in the process—through multiple tiers of companies and individuals,” Hewins says.

BEWARE OF BIDDING UNPROFITABLE WORK

As project cancellations and jobsite closures dampened contractor confidence in their ability to secure new work, many firms began aggressively bidding on more projects than usual. While the initial surge in bids has slowed, contractors should proceed with caution and make sure that their bid process is efficient and realistic. In this aspect, Krishnamoorthy believes data is the window to a successful bidding process.

“One of the things we are working on is providing a view into how our customers are performing against similar demographics. You want insights from the data that’s going to help you be knowledgeable about the bid that you’re presenting. Consider what your workforces are, what’s your crew availability, what are the needs of that particular job? Automation is going to help a lot of companies be smarter about the bid that they’re proposing. What you know about the project and the subcontractors you work with is going to be critical in making sure you put the best bid forward, not the cheapest bid,” Krishnamoorthy says.

Experienced contractors have learned not to chase unprofitable bidding opportunities. “I remember back in 1990 when work went for less than cost as the recession dragged on and thought, with only so many new opportunities coming out, if all contractors maintained their margins they wouldn’t need to try to scoop up every project at rock bottom margins,” says Henley. “I feel the same thing is true today. The prices we are seeing are below cost. Everyone is hitting the panic button and taking unwise risks in regard to bidding.”

Knowing your firm’s limitations is imperative to completing a project at cost and on time. Bidding technology can help crunch those numbers so general contractors can collaborate with subcontractors on estimating, supplies and more. “Technology can give construction firms a competitive advantage in the bidding process,” says Dustin Anderson, vice president, at Sage Construction and Real Estate. “Estimating software helps businesses produce faster, more accurate estimates, enabling them to pursue the right work at the right price.”

As the playing field has narrowed during the pandemic, so have the number of players. “Some subcontractors didn’t make it and some contractors are gone as competitors,” Schniegenberg says. “The ones that did make it are getting more aggressive in making sure they have backlogs, so margins are lower.”

“To remain competitive, contractors need to have a greater understanding of their estimator accuracy, competitive spread analytics, customer and job type profitability, win ratios and more. Having proper estimating tools are essential to bridge the gap between the estimate and what is actually happening in the field,” says Porter.

PREFABRICATION: BUILD IT BEFORE YOU BUILD IT

Prefabrication has seen a marked increase in popularity during the pandemic due to worker and material shortages. According to a 2019 report by McKinsey & Company, modular construction can cut a schedule by 20–50% and reduce construction costs by as much as 20%. As contractors take advantage of the economics inherent in offsite prefabrication, BIM technology is taking on an outsized role.

“While many construction firms have been harnessing the power of BIM for years, it has gained popularity over the past several months as businesses have increasingly turned to technology to increase collaboration while implementing social distancing measures,” notes Anderson. “We have seen a similar uptick in prefabrication as it also has advantages during the current climate. By utilizing both BIM and prefabrication, teams can create complete 3D plans and begin building parts of a project or even entire structures offsite. This can help keep projects moving when many have been slowed due to social distancing measures, which limit many jobsites to one trade at a time.”

“I see BIM as a critical enabler to the success of prefabrication, whether it’s single trade, multi-trade or volumetric,” says Courtemanche. “The model facilitates collaboration between all project stakeholders so teams can coordinate and truly build the building before they build it. The industry is also seeing a growing use of integrated project delivery methods, more specialty contractors adopting the technology and more detailed models being created to take advantage of prefabrication.”

“Having a controlled environment has probably never been as valuable as it is today. Prefabrication offers a level of control and efficiency that is simply undeniable,” Guitton says. “That being said, like anything else in life, it all comes down to execution.”

AI, SENSORS AND ROBOTICS HELP MANAGE POTENTIAL RISKS

Sensors worn on belts to ensure social distancing along with high tech automatic wash and disinfecting stations are now present on the majority of jobsites to protect workers and maintain compliance with CDC guidelines and local regulation. The rapid adoption of these technologies has also spurred interest in the utilization of artificial intelligence to head off potential risks.

Skanksa was already using Triax’s wearable technology to monitor safety and productivity when the company released a new product for hardhats or lanyards that notifies workers when they are breaking social distancing requirements. “Data can be referenced when a worker tests positive for COVID-19 to view everyone they’ve come in contact with and the durations,” Hewins says. Skanska also uses Arrowsight’s video auditing and AI tool to track social distancing along with new PPE such as facial barriers where work does not allow for six feet of social distance to maintain compliance with new COVID-19 protocols.

Keeping track of who comes in and out of a workspace has never been more vital. Henley Construction implemented web cameras and security intrusion systems with motion detectors that send an alert when a non-construction person has infiltrated a specified area. “If an alarm goes off, we utilize the camera to identify the person and the location so the person can be escorted to a safe area,” says Henley. “We can also identify the areas where we need to focus on sanitization.”

While the robot revolution has yet to replace skilled craft workers, the day when robotics will be commonly used to aid in dangerous and repetitive tasks while supplementing the ever present worker shortage grows ever nearer. “The continued growth of robotics in construction is undoubtedly at the top of the list of disruptive technology,” says Guitton. “The progress being made in the past few years is nothing short of astounding. Seeing machines performing tasks like painting and laying bricks as well as the advancement of exoskeletons is going to disrupt cost, reduce risk and shorten the time for delivery of projects.”

RENEGOTIATING CONSTRUCTION CONTRACTS

Project delays, shutdowns and new health regulations caused by COVID-19 sent many contractors to review the language in construction contracts to see where they could renegotiate project deliverables and expenses.

“General and trade contractors and owners have had to become more acutely aware of certain key contract provisions, such as notice requirements, differing site conditions, change clauses, suspension of work clauses and delay clauses, including force majeure provisions,” notes G. Scott Walters, partner at Smith Currie. “Many of the impacts associated with COVID-19 would trigger one or more of these provisions.”

The implications of dealing with COVID-19 have affected not only cost for many contractors, but project phasing as well. “We had to rephase several jobs to minimize our interaction with public and cross contamination between construction crews and project reps,” says Henley. “Ultimately, this led to additional costs for not only extended general conditions, but also the additional resources to sanitize work areas.” When taking on a new project, contractors should ensure the contract provides for passing along additional costs incurred for rephasing work that might result from new regulations or requirements.

As construction projects continue amid government-imposed restrictions on business activities, Walters points out that contractors have had to become more keenly aware of health and safety risks associated with the pandemic. “This has put an additional burden on contractors to make sure their workers are adhering to new safety requirements such as working six feet apart and regularly disinfecting their equipment and areas. I am now seeing more and more exculpatory provisions in contracts, typically in the form of a waiver or release, that often attempt to shift some or all of the COVID-19-related risks to one party, typically the contractor.” Whether such waivers or releases are enforceable will likely depend on the law applicable to the jurisdiction where the construction work is being performed, he adds.

PPP FUNDING, ROUND TWO

In the first round of PPP relief, the construction industry received the lion’s share, garnering almost $64.4 billion in loans by June of last year according to the SBA. Those funds supported an estimated 51 million jobs overall. This relief package was integral in helping contractors maintain their staff through shutdowns. “We received a PPP loan that helped us maintain several staff members as work was slowing down,” says Henley.

Businesses that took advantage of the initial round of PPP relief may be eligible for loan forgiveness providing that funds were used according to SBA guidelines and firms are timely in submitting their loan forgiveness applications.

The second stimulus package includes $284 billion in PPP funding and the industry is paying attention. Construction businesses that took loans in the first round are eligible to apply for a second PPP loan provided they meet new qualifications which include having no more than 300 employees and a minimum 25% decline in revenue in at least one quarter of 2020 compared to the same quarter in the previous year.

Any business that receives a PPP loan may be audited to ensure appropriate use of funds. The SBA is required to submit its forgiveness and audit plan to Congress by Feb. 10, 2021, clarifying how and when they plan to audit PPP loans. This is a call for contractors to prepare now for a potential audit.
“Even before the audit process, companies should have a team assembled, including internal personnel, accountants and attorneys, to review pertinent information and map out the best strategy to respond to any audit requests,” advises Stephen P. Katz, partner and chair of Peckar & Abramson’s corporate practice.

As far as gauging what an audit will call into question, Katz recommends being prepared to address the following questions:

  • Did current economic uncertainty make the PPP loan request necessary to support the ongoing operations?
  • Were the proceeds of the PPP loan used in an appropriate manner permitted by the PPP program?
  • To what extent is the PPP loan forgivable?

Katz also recommends putting someone in charge of your PPP. “Companies should appoint an executive—the CEO or CFO—who should serve as the point person to correspond with the SBA. All company information and inquiries regarding a PPP loan should be directed to that point person,” he says.

EMPLOYEE RIGHTS: TO VACCINATE, OR NOT TO VACCINATE?

With the news that the COVID-19 vaccine will be made available to the construction industry as essential workers, the debate will begin soon on whether employers should mandate the vaccine as a condition of work. The Equal Opportunity Commission (EEOC) has said yes to mandates, with certain exceptions.

The paid employee leave rights that were provided under the Families First Coronavirus Response Act (FFCRA) expired on Dec. 31, 2020. Going forward, employers can continue offering these benefits on a voluntary basis and be allowed tax credits. Any paid leave rights voluntarily offered after March 31, 2021, however, will not receive tax credits.

Employee privacy is another consideration for contractors. “We try not to let everybody in the company know when somebody calls in sick, so we implemented a privacy policy by which we send every one of those identifications to our human resources department. We didn’t want management to know if they were sick, or their partner was sick, or if their spouse was sick or the kids were sick. If they couldn’t come to work, all we wanted to know is if it was related to COVID-19. It’s the best way to ensure the privacy of our employees who are also owners of our company,” says Klessig.

“Contractors have to compete, plain and simple. They have to focus on their top talent and take care of them. It is effectively not that different than it has always been. The companies that thrive are those who will have the strongest teams,” says Guitton. “I have seen many talks about ‘sharing the pain,’ and I am not sure that asking everyone to take a pay cut is the right business approach. It might feel right but it is important to remain objective about it. There are times when it is best to choose to stay with a smaller team and build great loyalty than taking the risk of hurting all of them a little.”

ELECTRONIC BONDING GETS A BOOST

Another technology that’s received a boost in market acceptance due to the pandemic is electronic surety bonding.

“Much like paper bids, paper surety bonds have become a thing of the past,” says Joe Sforzo, chief executive officer of Surety2000. “Hand delivery of paper documents increases human contact at a time when social distancing is needed. As digital processes progressed in the past year, it became apparent to most businesses that they can survive and even thrive in a digital world.”

As the acceptance of electronic bidding systems has increased, Sforzo has seen a corresponding increase in the acceptance of electronic bonding and believes it will become an integral part of the e-bidding process.

“A growing number of construction managers are requiring electronic bid bonds, performance bonds and payment bonds from subcontractors,” Sforzo notes. “The cost of the process is nominal while providing great efficiencies and reliability. Error-free electronic bonds can be executed in minutes by the selected broker and surety underwriter.”

LESSONS LEARNED

The COVID-19 crisis has underlined to the industry that cross-collaboration within its own ranks will result in better productivity and profit going forward.

“At the highest level, the global pandemic has forced many construction leaders to recognize the interdependence of firms in the construction economy,” says Procore’s Courtemanche. “We often say that construction has not changed for 100 years, but the complexity of the construction value chain has actually increased significantly in recent years. COVID-19 has tested this value chain in many places. The companies that will emerge the strongest from this crisis will be those that have embraced the need for greater cooperation between all stakeholders on a project. We’ll see the greatest results from those that seek out a more collaborative approach.”

“I think we have learned a lot of new lessons in terms of how we can work efficiently in a remote setup, how we can leverage each other’s strengths in a tough situation like this. Organizations have accelerated their investment in technology—something that used to take six months to a year—in a matter of weeks. Don’t lose that strength. It’s the classic two-minute drill in football. Sometimes you may have to run the two-minute drill with less time. When a team gets behind they go into offense, and that’s a skill that they’ve gained by practicing a two-minute huddle. What is that two-minute huddle for construction companies? What is it that you need to do time and time again, not just when you’re thrown an emergency? Those are the opportunities to identify and improve on,” stresses Acumatica’s Krishnamoorthy.

The pandemic has also heightened the need to vet not only who is on your team but who you do business with. “Unfortunately, the pandemic has hurt many small businesses, particularly small contractors. It is more important now than ever to qualify a subcontractor’s ability post-pandemic,” advises Sforzo.

In addition, getting paid—which has always been notoriously slow in the industry, pandemic or not—is something more smart construction firms are managing proactively.

“Adopting technology for timely payment management is not just smart, it’s going to become necessary over the next several years because legislation is going to become more pervasive in more than just a handful of states. Legislation in Canada is already on the docket to be implemented in 2021. It’s only a matter of time before all fifty states begin to create that legislation here with penalties for those who don’t implement these practices,” says Milligan. “If I were running a construction company, I would look at how adopting payment technology can help my employees, vendors, suppliers and subcontractors manage cash flow and get paid while positively fostering these industry and supply chain relationships.”

PLANNING AHEAD: PROCEED WITH CAUTION

One thing is certain, having a plan going forward to spearhead the next crisis is imperative to remaining profitable and productive in the years to come. Making sure you have a team in place to help develop short term, mid-term and long-term strategies to leverage your company’s strengths in finance, technology and workforce will put your business in the best possible position to achieve ongoing success.

“As we begin a return to normal, contractors need to start preparing for the future. A large part of being successful in this next stage is making sure the business is agile enough to respond to whatever is coming next,” says Steve Antill, chief revenue officer for Payroll4Construction. “Technology can help by streamlining inefficient processes and centralizing data. With a centralized home for information, companies don’t waste valuable time manually collecting data across multiple systems or cross-referencing it for accuracy.

Decision-makers can focus more on business performance of the business and quickly make adjustments in real time.”

For those with employees stuck at home, this is an opportunity for growth. “Some construction firms have had to cut their staff, but others with substantial cash reserves, access to credit and/or SBA or PPP loans may have significant numbers of employees that are idle,” says CMiC’s Barberi. He proposes repurposing this idle time for professional development spanning a broad range of areas, from how to use web-based communications technologies to skills and safety training delivered online as well as employee assistance for dealing with the health, social and economic challenges of a pandemic.

Walters advises proceeding with caution moving forward. “My advice for contractors positioning for long-term success is twofold. First, on each construction project, the prudent contractor should work with all members of the project delivery team to ensure that appropriate and necessary health and safety protocol and guidelines addressing COVID-19 risks are understood and being followed. Second, if you are a contractor whose primary market has been adversely impacted by the pandemic and you are exploring new markets to expand your work, be careful. Construction projects are not one-size-fits-all. Some of the many complexities include project location, project delivery methods, public versus private sector work, and type of construction. The prudent contractor looking to diversify should take steps to know and understand all of the risks associated with expanding into new areas,” says Walter.

Through it all, it has been the resilience of the workforce that has inspired those mitigating the crisis head on. Hewins has been particularly impressed with the people that kept the gears turning during this historical moment. “This year, through all that has happened our people remained steadfast and persevered. I am humbled by their resolve, resourcefulness, and commitment to see this year through despite the brutal circumstances we faced,” he says.

Schniegenberg agrees, “I have seen managers turn into leaders.”

As this quote attributed to Mark Twain reminds us: “Continuous improvement is better than delayed perfection.” There is no time like the present to attack the issues and weaknesses in your business to ensure you are prepared for anything thrown your way.

1 The number of U.S. deaths attributed to COVID-19 as of Jan. 20, 2021. Source: John Hopkins University of Medicine.

by Cybele Tamulonis

Related stories

Business
Empower Your Employees and Profits With a Meaningful Metrics Strategy
By LeAnne Good
Employing a straightforward strategy to manage your company's money and money goals is sometimes the best path to success.
Business
Construction Executive's 2024 Photo Contest Is Now Open for Submissions!
By ABC
CE's photo contest is now open for submissions. Enter today for a chance to win the grand prize and land on the cover of the December issue. Hit us with your best shots!
Business
Taking Control of Quality Control
By Matthew Kleiman
Neglecting work quality costs the industry hundreds of billions of dollars in rework every year—and endangers workers’ lives. Commit today to developing a quality-management system.

Follow us




Subscribe to Our Newsletter

Stay in the know with the latest industry news, technology and our weekly features. Get early access to any CE events and webinars.