Five Success Strategies for Growth in Construction

Many construction companies are turning their eyes toward the future, working to not just make up for 2020 losses but also to grow. With the pandemic starting to come under control in many areas, and the potential for a well-funded infrastructure package in the near future, now is a great time to lay a foundation for success. By leveraging the following strategies, construction companies can better position themselves for growth.

1. Revisit the business plan and mission

Construction organizations that hope to expand should take a look at the original business plan and mission. These foundational documents do not often need to change, but it’s possible that they are insufficient to support true growth.

Asking the following questions can help uncover misalignments that need to be addressed.

• Does the original goal address the needs of the current market or projected changes in the market?
• Can the company become more competitive without making significant changes?
• Did the pandemic highlight structural problems within the organization that can limit growth?
• Did the pandemic uncover new opportunities that can create or promote growth?

2. Focus on workforce management

Construction companies are facing a labor shortage that has the ability to prevent growth. While this situation started long before COVID-19, the pandemic has created a tighter job market for nearly every industry. This is an obstacle construction companies will have to solve to successfully grow their business.

A few processes to focus on when examining workforce issues include the following.

Focus on Retention
Keeping current workers happy and engaged will limit turnover, which costs money and creates a significant obstacle to growth. This often requires asking workers to identify issues and actively working to resolve them. Be aware that some issues may be procedural while others may point to culture problems that need to be addressed.

Improve Workforce Management
Streamlining processes related to things like time tracking, PTO requests and other managerial tasks can improve overall worker satisfaction. Changes in these areas include procedural changes but may also require new technology that makes workforce management more efficient.

Improve Recruitment Strategies
Being understaffed creates an unsafe and overwhelming environment, which leads to turn over. Resolve this by sharpening your recruitment tactics.

A few strategies to try includes tapping into new sources for local applicants and creating relationships with apprenticeship programs and trade schools. When possible, maintain relationships with former workers for possible rehire.

3. Use technology

The burden of the administrative work it takes to run a business can limit growth. For construction companies that do prevailing wage work, this issue is even more prevalent. Many times, companies are forced to limit their government contract work simply because their admin team would not be able to keep up with the increased paperwork.

Technology can bridge the gap between admin work and efficiency by streamlining areas like time and attendance, PTO management, payroll, certified payroll and reporting. Additionally, software can simplify time consuming tasks related to the construction process. The most common areas technology can be applied include:

• estimating and bid management;
• drawing management;
• project management; and
• payroll and reporting.

4. Examine and improve current processes

Broken processes are not only inefficient, but they can also restrict a company’s ability to be profitable and competitive. This can be particularly problematic for construction companies that rely on data and need to quickly produce accurate estimates and bids. Resolving these process-related issues is an important part of priming an organization for success.

Talking with department managers is a good starting point for identifying problems but ask everyone for input. After all, those that handle day-to-day administrative tasks are likely to have a clear understanding of problems and ideas for solutions. Some problematic processes to look at include:

• time and attendance;
• payroll;
• reporting;
• procurement;
• billing;
• estimating;
• bidding; and
• project management.

5. Focus on safety and compliance

It only takes a single accident or violation to create a financial setback that can take years to overcome. This can quickly undermine growth or create a situation. For this reason, it’s even more important to prioritize safety and compliance practices. This can be done by ramping up existing practices and increasing the organization’s focus on improving safety and compliance related processes.

A few ideas to consider implementing include:

• Clearly communicate safety standards;
• Make it easy for workers to communicate safety concerns;
• Focus on training and continued education;
• Look for and correct bad practices;
• Simplify and digitize reporting procedures; and
• Appoint someone over compliance to ensure reporting and certifications are always up to date.

For some organizations, success means expanding into new markets while others define it as increased profits and more winning bids. While there is no single path to success, construction companies can create an environment of growth by using these tips.