There are many challenges for construction business owners to watch out for where running a successful company is concerned. As well as keeping a site running smoothly and safely, they have to deliver projects on time and budget. Beyond normal day-to-day issues, there are also a few challenges that might take you by surprise. Here are some challenges for construction business owners, and some steps you can take to navigate them.
A shortage of skilled workers
The scarcity of skilled workers is a challenge construction business owners often face and this year will be no exception. Master Builders Australia forecasts the construction industry are facing a 130,000 person construction workforce shortfall. The labor shortages are not the result of any singular factor but instead is the result of a combination of things. An evolving industry, ageing workforce and barriers for female participation make this industry further challenging for employees. The long hours, lack of work-life balance, and primarily male dominated industry makes it a less appealing career choice for the next generation.
Construction business owners should focus and invest in skills development, apprenticeships, and providing work-life balance to increase employee retention.
Increasing health and safety issues
Companies trying to close the labour gap by quickly training new staff chance the risks of an inexperienced workforce. Mistakes and poor judgment can increase on-the-job accidents and injuries. In addition, understaffed companies are likely to attempt to do more with less, putting extra pressure on staff who may rush tasks, take shortcuts, or commit to excessive hours. Now more than ever, construction companies should prioritise health and safety compliance to protect their workers. This reduces liabilities and minimises the severity and frequency of claims. However, research by the Safe Work Australia agency shows that nearly a quarter of construction workers have received no health and safety training for a full year.
Lack of training can lead to accidents which cause lawsuits and higher insurance premiums. Failure to comply with health and safety obligations can lead to fines and penalties. Peninsula offers total health and safety training and advice for construction businesses including risk assessment and risk management. Chat with our team today to know how we can support your team.
High levels of employee turnover
The latest data released by the Australian Bureau of Statistics indicates that construction has the sixth highest turnover of 19 sectors measured.
This high turnover rate may be the result of the less appealing aspects of work in the sector. These include long hours, the physically demanding nature of work and increased risk of injury. Additionally, there is a lack of job security in a sector dominated by contracted, subcontracted and casual staff.
Hiring managers can overcome these negatives by emphasising the freedoms of earning while you learn, enjoying flexible hours and working in the outdoors.
Rising material costs
The increasing costs of materials has been a main concern of the Australian construction industry for the past few years. Inflationary pressures, geopolitical tensions and other macroeconomic factors have played a role in pushing up material costs. Rising energy costs have also impacted the production and transportation expenses. These cost have hit construction businesses hard with a surge in insolvencies.
Construction business owners need to be smart and adapt digital tools and technology that can enhance efficiency and productivity. Identify opportunities to reduce overall material costs without compromising with the integrity of your business and the project. Consider streamlining workflows and resources with use of sturdy policies and strong HR and WHS processes.
Lack of female construction employees
Construction has a 'macho' stereotype image and culture that is hard to shake off. The tone, the language, the imagery and the culture around the industry is specifically centered around men, making women feel excluded. Only 12.7% of the construction workforce in Australia is female. With the industry in dire need of workers, this is a good time to expand the talent pool and consider marketing to a diverse audience.
Construction business owners and employers should evaluate their workplaces and environment. Foster an inclusive workplace that both men and women feel comfortable and safe in. Effective HR and WHS policies and processes can give you an edge in creating an inclusionary environment.
Environmental issues
Although many building projects are labelled “green”, construction has come under intense scrutiny in recent years for environmental issues. With the world firmly focused on sustainability, construction business owners must reduce and mitigate the environmental risks of their sites.
Every stage of a construction project has a measurable impact on the environment. This includes the use of raw materials and water, burning fossil fuels and the disposal of waste into landfills.
Project managers on construction sites need to ensure material resources are used efficiently. Simultaneously, an effective Waste Management Plan needs to be put in place before a project begins.
Construction supply chain issues
Construction supply chain issues remain one of the biggest challenges for construction business owners.
Common construction materials that were traditionally readily available before the outbreak of the pandemic are now difficult to find. If found, they often come at very high prices with long lead-times. As a result, contractors find themselves forced to consider material alternatives in order to meet project budgets and schedules.
Are you wondering how to reduce the impact of construction supply chain issues? You can communicate project timelines with suppliers, order locally, promptly pay suppliers, and ordering long-lead materials ahead of schedule.
Step in the future with Peninsula
Does your construction company have pay or workplace health and safety issues? Peninsula works with Australian employers and business owners, providing them with tailored support and advice. Call us on 1300789186 to find out how we can help you.