← Back To Blog

Case Studies

Exterior Contractors

Homeowners

HOVER

Insurance

News

Product Updates

4 Current Issues in the Construction Industry Affecting Contractors

A few common issues can prevent you from getting the most out of your contracting business. Fortunately, you can overcome them. Here, we’ll discuss four ways to adjust your standard operating procedures to address and minimize problems as much as possible.

1. Productivity Issues in the Construction Industry

Often, it can take longer to complete a job than expected. Labor shortages and supply bottlenecks—especially during COVID—can result in long cycle times, resulting in a poor customer experience. This situation is a critical sore spot from the customer’s perspective. A few key pinch-points to watch out for at the moment are labor, complexity, and supply shortages.

Labor Is Tight

A skilled labor shortage is hindering productivity in the construction industry. Many companies are trying to do more work with fewer professional contractors. Even within construction firms, teams can’t seem to break out of their silos. With this in mind, it’s important to “love the ones you’re with.” It can cost a firm as much as $250,000 to replace a construction veteran. With the tight labor market, you need to keep your current skilled employees happy.

Projects are Becoming More Complex

Construction projects are getting increasingly complex. It’s easy to overlook the need for increased planning and communication. Still, that’s what’s needed to execute these kinds of jobs successfully. With HOVER, you can ensure that your project owner and team are always on the same page with shared project data and modeling. We’re happy to talk to you about improving your cycle time by automating production and material ordering processes.

The Supply Chain Is Unstable

From embargoes to tariffs and maritime traffic jams, construction industry logistics suggest that the industry is suffering along with all other sectors that rely heavily on their supply chains. Material shortages, distribution, and manufacturer delays increase with each passing day, leading to long cycle times. Costs are rising, and it may seem like it’s getting harder to source needed supplies. There will almost certainly come a time when you need to think creatively to overcome supply issues. One possibility is to rethink your product choices and source similar materials to keep projects moving forward.

2. Making the Most of Scarce Leads

You earn a respectable living by providing a valuable service that requires special skills. Both you and your client benefit from this arrangement but have different perspectives. Here, friction can sometimes arise.

You must charge a reasonable rate, so that you can pay your skilled talent fairly and earn a good living. At the same time, homeowners want the best work possible for the lowest price. This tension can make it hard to find affordable, high-quantity leads--customers who recognize the value of your skilled talent and are willing to pay for it. In fact, competition for these leads is so high that it is important to make the best of every lead you get.

By focusing on the quality--the relationship between homeowner and pro that comes from transparency and honesty--rather than quantity of client relationships, you will get the most out of every single lead. The good reputation such relationships foster will also help bring higher quality leads your way.

One key to such strong client relationships lies in creating accurate, achievable cost estimates that ensure you and your client are on the same page about the scope and cost of the project.

Accurate Cost Estimates

One of the most common reasons for the deterioration of homeowner/pro relationships is unexpected cost or time changes due to inaccurate cost estimation. An inaccurate estimate can cause serious problems—whether it’s an overestimate or underestimate.

If you inadvertently overestimate project costs, the homeowner may decide not to go ahead with a job. You could also lose competitive bidding. In a worst-case scenario, a client could assume that you’re trying to overcharge them.

However, underestimating a job is just as bad. A low estimate can negatively affect you, the project owner, or even both of you. Historically, miscalculated project costs have even driven some developers and contractors out of business. It may seem impossible to create a perfect cost estimate--something will nearly always change by the time you've made your calculations, had them approved, and bought the materials.

However, a platform such as HOVER helps exterior contractors move quickly so that estimates stay accurate. With HOVER, you can mitigate the risks of overestimating or underestimating, keeping your clients happy, securing your good reputation, and reducing customer cancellations.

Achievable Cost Estimates

Unfavorable contract terms can arise from a client’s expectations. For instance, a homeowner may be tempted to try and coerce a skilled contractor to accept lower than optimum rates. A cost estimate that is attractive to the client may help improve close rates, but is not always advisable in the long run.

While it may be tempting to give in to a client’s demands to secure a contract, providing an unachievable cost estimate can cause problems down the line. Highlight the value of your ability right at the onset of a project and make your terms and conditions clear to avoid these types of issues. You should also make sure your sales team uses the latest best sales practices, such as selling on emotion, rather than rationalizing the logic of choosing your company over competitors.

3. Environmental Issues Facing the Construction Industry

The construction industry suffers a poor reputation when it comes to environmental sustainability. The construction industry creates a considerable portion of air and water pollution. Also, about half of all landfill waste comes from construction work. Ongoing construction work affects many parts of the environment, including:

  • Biodiversity
  • Natural resources
  • The atmosphere
  • Waste sites
  • Waterways

As a contractor, however, you can do your part to turn things around. In doing so, you’ll join many of your colleagues who’ve changed their construction practices to help protect the environment. For instance, a growing number of contractors are embracing green building practices. There are also other low-cost ways that you can reduce the carbon footprint of your company, such as going paperless or choosing energy-efficient work vehicles.

4. Safety Issues in the Construction Industry

Safety is an issue that plagues the construction industry, which has the most worker injuries and deaths of all occupations. You must keep your workers safe and protect them from accidents and injuries. What’s more, it’s essential to let your clients know that you keep a safe shop.

Ongoing training is vital for reinforcing essential safety practices and gives you significant credibility with your clients. You can highlight your commitment to safety in your marketing materials, which can go a long way toward easing project-owner concerns. If you want to improve safety on the job site, OSHA publishes helpful construction safety resources.

Overcoming Current Issues in the Construction Industry

Today’s construction firms face project delays and talent shortages every day. It’s also more challenging for companies to get their hands on needed building materials. Yet, it isn’t all unwelcome news. A growing number of contractors are confident that the next 12 months will yield new business opportunities. There’s industry-wide consensus that profit margins and revenues will improve over the next year.

If you’re having problems with your construction business, they didn’t all start at once. Likewise, you can’t expect to fix them all at once. Instead, begin turning your company around by focusing on select areas that will help your contracting business start fresh and grow fast. With focus, you can direct your time and resources into shortening and ending project delays.

You can also take this time to train your employees so that your company is ready to face what lies ahead. By doing so, you can prepare your company to exceed the expectations of all your future project owners.

Leveraging Technology to Overcome Construction Industry Challenges

It’s critical to have an awareness of obstacles if you want to overcome them. Hopefully, our brief overview of current issues in the construction industry will help you enjoy a prosperous year.

With HOVER, you can overcome the common pitfalls of the construction field through workflows that streamline productivity and communication. No matter the size of your company, we have a pricing plan that fits your budget. Learn how HOVER can help you by Starting Your Free Trial Today.

Try HOVER today

Start your free trial to see how HOVER measures up.

HOVER

ProductPricingPartnersHome Improvement ProfessionalsInsurance Carriers & Carrier PartnersHomeownersArchitects & DesignersTax Assessors

© 2021 HOVER, Inc.

TermsPrivacy