The forecast for the construction industry is optimistic. But many of the challenges that emerged during the COVID-19 crisis, including historic workforce shortages, are continuing, making it difficult for companies across the industry to keep pace with demand for new projects. We talked to Slater Latour, Chief Marketing and Product Officer for the leading project information management solution provider Newforma, about how design, engineering, and contracting firms can leverage technology to navigate the unprecedented workforce challenges facing the industry in 2022.
What are some of the main challenges facing the construction industry today?
Slater Latour: Construction and design firms continue to deal with a shortage of skilled labor. It’s very difficult to recruit qualified talent for positions throughout the industry. That’s been a major issue for many years, and it has been exacerbated by recent economic disruptions.
It’s not just a lack of skilled field workers and tradespeople, however. The demand for workers to fill project management and administrative positions, as well as creative and technical positions, is at historically high levels. Throughout the industry, companies are dealing with a shortage of workers.
We are also seeing that the rapid emergence of remote work has added unprecedented volatility to the jobs market. Industry experts estimate that the average annual turnover rate in the construction industry is 68%. That means fierce competition for talent.
Skilled, experienced workers not only have multiple opportunities available to them, they’re no longer limited by location. Before the recent increase of remote work, the benefits of a new job might be offset by the costs and inconvenience of moving your family to a new city. Traditionally, workers have had to calculate those costs when considering a change, and that’s helped maintain a relatively stable workforce. Now, as those costs have become less burdensome, it’s easier for workers to switch jobs.
How does that volatility affect the industry?
Slater Latour: Even though demand for new construction is at an all-time high, the industry is struggling to keep up. Workforce shortages and turnover both impact the industry’s ability to keep pace.
Employee turnover is connected to lost productivity, and not just because of staffing and workflow disruptions.
How does it affect individual companies?
Slater Latour: Companies are challenged with transitioning people in and out of projects. When a team member with critical project knowledge leaves, too often that knowledge goes with them. The loss of institutional knowledge can stop a project in its tracks as the remaining team members scramble to locate, identify, and collect data in a variety of formats, across multiple platforms.
It’s also difficult to ramp up new staff on a project. Lack of access to project information can have a major impact on a company’s productivity. Because project data is often spread across a wide range of applications and storage locations, it is extremely difficult for new people to find the information they need to get up to speed.
How do you see technology helping – or hindering – with the workforce volatility issue?
Slater Latour: You would think that the use of technology would help firms better manage workforce volatility, but it can also get in the way. Many firms use a number of different applications for their day-to-day operations. Team members often rely on platforms required by partners, clients, or vendors. Training new staff on all these applications takes time and this can lead to project delays.
In addition, new team members ramping up on a project need access to project information. coordinating an effective search of multiple applications is time-consuming and frustrating. Email is widely used for project decisions, too. But those threads may be very difficult to access after an employee leaves the company.
The problem is magnified when different platforms or applications are used to manage different projects.
How can companies successfully leverage technology to manage volatility in the workforce?
Slater Latour: Better organization of project information can make an enormous difference. An effective project information management strategy helps teams maintain consistent institutional knowledge, which is critical as companies seek to navigate the current turbulent employment market.
Firms that have a strategy for managing project information are more agile — and have a competitive advantage. A thoughtful plan for project information management helps team members stay up to speed on projects and across multiple projects.
A reliable project information management solution is an important part of such a strategy. Firms should be able to choose the software applications that work best for them. But a powerful project information management solution works with their selected applications, and that interoperability and standardization of data ensure the flexibility needed to deliver successful projects.
Can you give an example of how a project information management strategy can help?
One of our customers shared a recent experience that illustrates how a project information management solution ensures consistency across projects and helps companies succeed in a challenging employment market. The firm was running more than 30 active projects. Ten of their 12 employees left in a period of six weeks, effectively shutting down the office. When new team members joined, they were immediately able to plug into the project information management solution. The new team members were able to find the information necessary for keeping active projects moving forward and to continue implementing the firm’s enterprise data management strategy.
When firms have a unified approach – a standardized process – to managing project information, everyone knows where to go to get the information they need. They have one common interface which eliminates the need to train on multiple platforms. When a project information management strategy is deployed across the firm, employees can seamlessly transition from project to project knowing there is consistency on how to access the information they need to keep projects moving forward.
Slater Latour is the Chief Marketing and Product Officer at Newforma. He is focused on helping Newforma continue to build a great business by delivering valuable solutions to the AEC industry. Slater has held multiple corporate strategy and cross-functional leadership roles at vertical software, financial technology, and financial services organizations ranging from early-stage start-ups to one of the 10 largest diversified financial services providers in the world.