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Tips & Advice Trends & Technology

How COVID Changed Construction

There’s no doubt that the Coronavirus has changed everyone’s life. Those who had it will never be the same, and those who haven’t still live in fear. The construction industry is not immune to these changes. From a drastic material shortage to new ways to collaborate, the industry will never be the same.

Here are five ways the construction industry has been impacted by COVID.

1. Materials shortage

There isn’t a trade that hasn’t been impacted by the materials shortage in some way. It started with factory shutdowns due to stay-at-home orders and was followed by a trucking and shipping labor shortage. Now we have hundreds of cargo ships stranded outside ports waiting to be offloaded.

The materials shortage started with lumber, then moved quickly to steel and other building materials. Now there isn’t anything that hasn’t been affected. Approximately 68% of contractors surveyed said they were experiencing material delays in the 2nd quarter of 2021. The shortage has delayed projects and caused prices to skyrocket. At one time lumber was up over 300% from the previous year! And now we have additional supply chain issues to deal with in the coming months. There doesn’t seem to be a quick answer to this one.

2. Health becomes a priority

Gone are the days of going to work when you are sick. Since almost any symptom could be a sign of the COVID virus, everyone with cold or flu-like symptoms was sent home. Workers were told not to come in if they felt sick. Then, once tests were available, we went to testing everyone and quarantining those who tested positive. Whole crews or job sites could be knocked out and the project placed on hold due to contact tracing and the required quarantining.

Now we are dealing with vaccines, mandates, and whether to mask or not. What started as a health issue has become a political hot potato. It’s left companies in employees wondering “what next?” Things won’t go back to normal anytime soon. Contractors developed new ways to track symptoms and contact traces using construction software packages.

3. New ways to collaborate

When the stay-at-home orders first came out, design teams could no longer travel or meet on job sites. Everyone that could work from home did, which made collaboration much more difficult. But teams rose to the occasion and found new tools they could use to work together. Tools like drawing collaboration were used to keep everyone informed of design changes. And Zoom calls became the norm as teams worked together to make it work.

Even building inspectors started doing inspections using photographs and video conferencing. This sped up the inspection process for all involved.

Cloud computing and web-based SaaS software have changed the ways teams collaborate. Since most were working from home and travel was restricted, being able to access documents and information from anywhere became a necessity, not a luxury. Cloud-based technology and construction

management software, like Premier, helped contractors stay connected, scale their operations without having to rely on human resources, make investments in their companies that eliminated time-consuming processes, and identify cash flow issues and problem projects early. Without such flexibility, many companies found it hard to operate in the new environment.

4. E-Signing became more popular

One thing that couldn’t stop was payments, and to keep the documents flowing many companies had to rely on electronic signatures. Although they’ve been legal for years, they gained in popularity during the pandemic. Some states, like Oregon, started accepting remote notaries, while others had been for years. A remote notary session involves the notary and signer getting together on a conference call to witness the signature. This makes it easier for lien waivers and other documents to be notarized so they don’t hold up payments.

The more electronic signatures were collected, the more document management became a necessity. Companies had to track lien waivers, subcontracts, contracts, change orders, and purchase orders and know when each had been signed. Construction management software, like Premier, allows contractors to keep these documents organized and know exactly who’s missing. You can seamlessly connect your e-signature software with Premier software to collect the signatures you need quickly and easily.

5. Materials cost increases force price increases

It started with lumber, rocketing 300 percent from its starting price, then other materials started raising their prices. Now gas prices are rising, along with other supplies for construction projects. As prices rose, contractors started to pass on those costs to their customers. The cost to frame a house more than doubled during the height of the lumber price spike.

Some customers delayed projects to try to avoid high material costs, while others just paid the price. Many contractors started adding price escalation clauses to their contracts to protect them in this volatile market.

Conclusion

We can only hope that someday we’ll be able to put this pandemic behind us and return to life as we knew it. Some of the changes to the construction industry caused by COVID are for the better, like making health a priority and the rise of collaboration. Other changes, however, like price increases and material shortages, are best left in the rearview mirror.

 

Author Biography:

Dawn Killough is a construction writer with over 20 years of experience with construction payments, from the perspectives of subcontractors and general contractors. Dawn has held roles such as a staff accountant, green building advisor, project assistant, and contract administrator.  Her work for general contractors, design firms, and subcontractors has even led to the publication of blogs on several construction tech websites and her book, Green Building Design 101.

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Tips & Advice

Is Manual Data Entry Costing Your Business? Why Automation is the Solution

If you think that investing in software to automate your systems will cost you more money than doing everything manually, you’re not alone. Many businesses operate under the assumption that paying for automation is more expensive than paying people to do things. The truth is there are hidden costs to doing things by hand, and those costs can significantly affect your bottom line.

We’re going to look at the hidden costs you may not realize you’re incurring by doing your data entry manually. The magnitude of some may surprise you.

1. Increased error rate

Workers entering data manually, without verification, can have an error rate as high as 4%. That means for every 50 entries, two are wrong. In an experiment in 2009, it was shown that data entry workers made up to 10.23 errors when entering data from thirty spreadsheets. This is the nature of human data entry.

When errors involve money, the stakes are high. These errors could lead to over-and underpayments, over-and undercharging customers, disruptions to the accounting and auditing processes, and may lead to financial trouble. Data entry errors have cost companies millions of dollars.

2. It takes time

Manual data entry takes time. The average typist can perform 10,000 to 15,000 keystrokes per hour. Depending on the amount of data and its form, it can take even the fastest typist hours to perform data entry. If the data requires comprehension or analysis before entry, this slows down the process even more.

It could take a competent operator between 8 and 10 minutes to enter 400 units of data. This may not seem like much, but if the volume of data is high, it can cost your company valuable time that could be spent on other workflows, like analyzing the data.

3. Can’t focus on important business tasks

With so much time spent ensuring that the data entered is correct and finding and fixing errors, there is no time left to work on the business. Managers spend their time ensuring that the data they’re reporting is accurate and less time actually analyzing that data. A survey found that 37% of manufacturing professionals don’t trust the reliability of manually entered data when making strategic decisions. If you can’t trust the data you’re getting from your team, how can you grow your business or take on additional work?

4. Inhibits business growth

When management receives data, it often makes decisions based on that information, whether it’s correct or not. These decisions may inhibit the growth of the business. For example, a costly mistake can lead managers to believe a project is over budget when it’s not. They then make moves to cut company spending to protect the company, when instead, they should be investing in future growth.

5. Hidden costs

Most companies think automation costs more than entering data by hand. The truth is there are hidden costs to entering data manually. There’s the obvious labor to enter the data, then more labor to check for mistakes, and more labor to fix the mistakes. At each level, it becomes more expensive and time-consuming to detect and correct mistakes.

It has been shown that incorrect data can cost companies up to 30% or more of their revenue. In particular, a 2018 Goldman Sachs report stated that the direct and indirect costs of manual paper invoice processing are $2.7 trillion for businesses around the world. The hidden costs of manual data entry can be enough to make or break your business.

6. It’s boring

Continually spending days or hours doing mindless data entry can lead to employee dissatisfaction and turnover. When workers spend hours keying in the same information, they are bound to lose focus, which increases errors and leads to frustration. Data entry work is repetitive and tedious. 55% of employees in a survey cited the collection, uploading, and synching of data as the least productive part of manual data entry. When employees don’t feel productive, their morale lowers and they are then more prone to make mistakes.

Automation is the solution

How can companies save themselves the time and money that is lost through manual data entry processes? Automating as much as possible is one way to recoup these costs. By using machine learning and automation, the software can automate much of the data entry process, leading to fewer mistakes and speeding up the process.

Premier Software uses AI, machine learning, and automation to speed up invoice entry and other repetitive tasks, so you can spend time working on your business and less time entering data. For a demo of how our automation works to save you time and money, schedule one today.Author Biography:

Dawn Killough is a construction writer with over 20 years of experience with construction payments, from the perspectives of subcontractors and general contractors. Dawn has held roles such as a staff accountant, green building advisor, project assistant, and contract administrator.  Her work for general contractors, design firms, and subcontractors has even led to the publication of blogs on several construction tech websites and her book, Green Building Design 101.

 

Categories
Industry Insight Trends & Technology

How COVID-19 Has Shifted the Construction Industry in 2020

Field workers wear protective face masks for safety on a construction project

Things have changed in 2020; we all know that. With industry shutdowns, social distancing, and new safety regulations, there’s no way they couldn’t change. The construction industry is unique in the effects the pandemic has had on our work. Since much of our work still has to be done on-site and by groups of people working closely with each other, the industry has had to pivot quickly. This has led to innovations in several areas, with the most prominent being technology, safety, and communication.

Construction technology

There have always been early adopters of construction technology, and many companies have been on the cutting edge for years. But these adopters have been widely dispersed and technology hasn’t gained much momentum in the industry, until now. In fact, up until now construction has been one of the slowest industries when it comes to adopting technology.

In 2020 the game changed. Suddenly everyone had to adopt technology, whether they wanted to or not. Some tech, like video conferencing, everyone had to quickly adapt to, so we were all in it together. There is some technology however, that the construction industry had to adapt on its own.

Drones have been in use on construction projects for a few years now. So they aren’t completely new to the industry. But suddenly project teams had to rely on them to get information from project sites. Drones are now being used by roofing contractors to do takeoffs and inspections, by site teams to perform project walk-throughs, and as a tool for surveying parts of projects that are difficult to get to. Expect drones to continue to grow in popularity into the future.

Virtual reality (VR) has allowed project teams to view projects and do inspections without having to be present physically. VR runs the gamut from photographs that are sent to inspectors and team leaders to a full video tour by a project team member with a phone or by drone. While the use of photos and video have been around for a while, they were never used for formal building inspections. Jurisdictions have been quick to adopt these technologies due to the fact that they needed to limit their on-site visits. The use of VR has the capability to speed inspections and shorten schedules.

The use of robots and other equipment to assist with the installation of building materials has also increased this year. Glass companies are using additional equipment to help them install large panes of glass with only one or two real person team members. This has improved the safety of installation and also sped up production. The use of robots and equipment to assist with installation continues to increase, and probably will as we continue to look for ways to work smarter.

Safety

2020 has been the year for new safety and health regulations, including regular health checks and added PPE. Local jurisdictions have been quickly issuing new guidance to contractors on how to keep their job sites running during the pandemic, while keeping workers as safe as possible. Contractors have had to pivot multiple times this year, reassessing their safety protocols and making sure that everyone is complying with the new requirements.

Companies now have to implement health monitoring protocols into their job sites. On large projects this can be difficult, as workers are entering and leaving areas through multiple entrances, and sites aren’t always monitored. In addition, companies have to track where workers are working at all times and who they are working closely with, in case they need to do contracting tracing. They also must keep detailed records and have them available when requested. Many companies have turned to technology to assist them with this, including the use of wearables, location monitoring, and automated health checks. Until the vaccine is widely distributed, these protocols will remain in place.

PPE needs have skyrocketed this year. Suddenly facemasks and gloves were in short supply. Now that supplies have leveled off, it’s easier for contractors to get a hold of the PPE they need. Many sites are requiring face protection, gloves, and masks be worn at all times to keep employees safe. These protocols are likely to continue into 2021 and beyond, as we try to maintain the health of all on-site workers.

Manpower use and crew size have decreased this year. Large job sites that had hundreds of workers were reduced to tens. Many companies had to look at alternative ways to get their work installed. Some used added equipment or robots, while others looked to prefabrication. Fabricating assemblies off-site reduces the number of employees in one space, allowing more workers to continue working safely. Prefabrication also reduces the amount of material used, prevents weather damage, and is better for the environment. This is a trend that will continue to gain momentum.

Communication

In a Forbes article, Johnny Clemmons, SAP Global Vice President Industry Business Unit Head of Engineering, Construction, and Operations, said that in the future, “Information must also be democratized, digitized, and universally placed into the hands of constructors to make a real impact on the industry.” While communication has often been a struggle in construction, many companies were forced to step into the future whether they were ready or not. The face of communication on job sites will be forever changed due to the pandemic.

Videoconferencing immediately jumped into the forefront of everyone’s day-to-day life. Zoom calls and Teams meetups are the norm today. These meetings have allowed people to remain in contact with each other, see each other, and maintain some sense of normalcy when face-to-face meetings haven’t been allowed. While many are suffering “Zoom fatigue,” these calls have allowed team members to attend meetings and view sites without having to travel, saving time and money. Conferencing this way may continue to be the norm going into the future, especially as security improves.

Cloud storage allows teams to access files, documents, and photos from anywhere with an internet connection. Since many project executives have been working remotely or at home, the ability to have access to these documents is paramount. This has allowed teams to easily keep up to date with project changes and ensure that team members have access to all the project files.

Collaboration and communication among team members has been more difficult when they can’t meet around the table and have open discussions. Many have turned to project management software to assist in collaboration. The ability to review drawings or documents, make changes, and have them updated immediately has improved project communication and helped ensure that work is done correctly.

The new normal

While drastic changes in technology, safety, and communication have occurred this year, the industry has quickly adapted and integrated these changes into his everyday processes. Teams are now better poised to deal with changes on-site with the use of these tools. While the use of on-site technology and current safety protocols may be reduced once the pandemic has passed, the need for communication and collaboration among team members will continue into the future. Companies that adopt tools such as construction project management software will have more success in the future, leading to better projects and improved client relationships.

 

Author Biography:

Dawn Killough is a construction writer with over 20 years of experience with construction payments, from the perspectives of subcontractors and general contractors. Dawn has held roles such as a staff accountant, green building advisor, project assistant, and contract administrator.  Her work for general contractors, design firms, and subcontractors has even led to the publication of blogs on several construction tech websites and her book, Green Building Design 101.

Categories
Industry Insight

COVID Changes in Construction

changes in the construction industry because of COVID-19 pandemic

If there’s one thing 2020 taught the construction industry, it’s that flexibility is everything. Having the ability to make changes, adapt, and stay organized is important. It’s even been the cornerstone of the success for many companies through these challenging times.

But just how much has COVID changed construction? And how are the most adaptable companies keeping track of these changes? Read on to find out.

COVID’s biggest impacts on the construction industry

The Coronavirus Pandemic affected the construction industry in some profound ways. Many of these impacts are changing the way the industry operated for many years. It’s hard to tell if any of these changes will be permanent. However, construction companies and personnel need to adapt to them now.

Job site safety

It wasn’t that long ago that job site safety meant wearing a hardhat and fall protection. Now it means so much more.

Construction sites across the world are adapting to strict social distancing guidelines. Workers must stay six feet apart from each other. If they can’t stay clear from one another, they need to don PPE. Also, bathroom facilities need constant attention to remain sanitized and safe. 

One of the biggest changes has to do with personnel. Employers are telling employees to stay home if they aren’t well. Until now, sick days were scarce in this industry.

Extended timelines

The amount of time it’s taking for some projects to complete has more than doubled since the pandemic began. Regulations shut many job sites down for months at a time. This downtime cost builders and owners lots of time and money.

Many supply sources closed down as well. With job sites closed, suppliers from small shops to large chains had to make decisions. Many found it better to shut their doors and furlough employees. When suppliers re-opened, they found a backlog of orders to sort through.

All these factors have added up to increased timelines and scheduling conflicts. Owners, general contractors, and project managers need to adapt to keep projects from derailing completely.

Materials shortages

One of the rather unexpected changes to come about from COVID is the materials shortage. When authorities let sites reopen, many contractors found themselves struggling to source materials.

The lumber industry took a hard hit from COVID. During the shutdown, many lumber mills and logging operations had to shut their doors as well. Coupled with the fact that most homeowners were off from work during the best DIY-months of the year, lumber started flying off of the shelves.

Trucking was also affected by COVID. It drastically increased the amount of time it took to get materials to a job site or supplier.

When construction sites reopened, it was clear that there weren’t enough supplies to go around. The supplies that were available were as much as twice as expensive, potentially destroying the profit margins on most projects.

The effects

All these factors add up to some expensive and significant changes. Increasing safety measures, extending deadlines, changing suppliers, and shopping for alternative materials are all changes that no one was expecting before the pandemic.

So how do you survive it?

How to stay adaptable with the right technology

If there’s one way to survive all of the changes that COVID has thrown at us, it’s through adapting. The construction industry as a whole is reluctant to change. But, adapting to new policies, practices, and tools is important. They could be the difference between surviving and allowing tight margins to swallow your company or project up and spit you out.

 

The best way to implement these changes is to embrace technology. The right construction software will help you adapt and overcome these changes. You’ll be able to focus on the job at hand while streamlining your administrative work.

Forecasting

One way to stay nimble during the pandemic and any future changes the industry may experience is to use effective forecasting software. 

Many contractors think of forecasting as a long term strategy meant to identify trends, but forecasting is much more. While it is extremely effective at identifying trends, forecasting has an immediate benefit. It shows you how changes you’re dealing with now will effect your project as it moves forward.

One example of how effective forecasting software can help you navigate these changes might be purchasing PPE for a project. If you’re on a project that now requires increased PPE, your profit margin may be in serious trouble. Inputting the cost of your PPE into the right software can show you its impact across the length of a project. 

That same software can show you where you’ve come under budget, allowing you to shift some cash. By having a good grasp on your project with forecasting software, you can make adjustments in real time. You’ll be able to cover the increased cost of PPE instead of scrambling to find funding for the rest of the project.

You can run this same scenario with increased materials costs, timelines, or any number of other changes that you need to stay on top of. Forecasting is the best way to understand how these changes will affect your project.

To learn more about how you can forecast with Premier Construction Software, you can schedule a personalized product demonstration here.

Change Order Management

If you haven’t seen a major increase in change orders during the pandemic, it’s coming. Projects simply cannot go as scheduled right now. Materials are short, projects are over timelines, and budgets are less than stable.

Software that handles your change orders can save owners, general contractors, and project managers a lot of time in front of the screen. Automatic generation for budget shifts and external change orders means less human error. 

Project managers and general contractors can also send change orders to their customers electronically. They can then receive an approval with an electronic signature within minutes.

These same programs can also keep track of proposed change orders and budget transfers. Owners and project managers can use it as a road map that shows them where the project stands, how it got there, and where it’s headed.

Cost Plus Billing and Time and Material Billing

The materials shortage and increase in costs are changing how many contractors structure their contracts. Instead of shouldering the costs or submitting change orders for approval, many are opting for Cost Plus or Time and Material Billing structures.

 

While both of these structures protect the contractor’s bottom line, they can be a challenge to put together on a large project. The right software can do it for you, automatically generating reports and payment applications. You can even set markup percentages by trades and material markups automatically.

Providing detailed and transparent payment applications means your customer will have fewer questions. Good software keeps your accounts receivable organized and easy by removing the hassle of billing.

For more answers on how Premier Construction Software can help you with your Cost Plus billing or Time and Materials billing, click here.

Adapting to changes during COVID

Change is hard, and the construction industry resists it all costs. However, resisting these changes can cost you everything. Implementing new policies and tools, while staying nimble and alert to the status of your projects and profit margins might make all the difference.

We don’t know when the pandemic will pass or what its permanent effects will be on the construction industry. However, there are lessons worth learning; best practices change, and flexibility and fluidity are key. The industry’s adoption of streamlined tools and technology could be the most important COVID-related change to date.

 

Author Biography:

Tom Scalisi has over 15 years of experience working in the trades. Since moving to full-time freelance writing, he has developed a passion for helping construction companies grow. He enjoys teaching contractors how technology can streamline their businesses and educating them about their rights during payment disputes. 

Categories
Industry Insight

The Impact of COVID-19 on Construction Costs 

Project manager calculating increased construction costs due to COVID-19

The novel coronavirus (COVID-19) has disrupted businesses in ways no one could have predicted and for a period of time longer than most anticipated. The good news is that the majority of U.S. businesses have been permitted to resume operations and are finding ways to adapt to the “new normal.” However, with that being said, the construction industry has suffered major financial impact as the cost of doing business has risen and the ability to complete projects on time has been impeded as a result of COVID-19. 

 

In this article, we’ll cover some of the major ways the coronavirus pandemic continues to impact construction costs.

 

New Standards for Workplace Safety

new safety measures implemented in the construction industry due to COVID-19

New health and safety regulations have required construction companies to develop plans for returning to work that outline how they plan to keep employees safe and operate in accordance with local laws and ordinances. Developing, documenting, distributing and implementing new safety protocols requires time and resources, all of which comes with a cost to construction companies.

 

New Personal Protective Equipment (PPE) requirements also come at a high cost. Not only is it difficult to calculate how many masks and gloves are needed to complete a project, N95 masks are still difficult to come by, especially in large quantities. As a result, some construction sites have begun to rely more on air scrubbers, HEPA filters and other dust control measures to save the N95 masks for situations where close contact is unavoidable. Sanitizing stations and temperature check programs also come at a significant cost and require rental fees, material costs and man hours for setup and management.  

 

Another factor to consider is how social distancing rules impact the pace of construction schedules. Before the COVID-19 pandemic, job sites would typically be packed with subcontractors which is no longer considered safe. With fewer people allowed to work at any one time, projects are taking longer to complete, which invariably costs more.

 

Project Delays & Cancellations

A workforce survey conducted by the Associated General Contractors of America (ACG) and Autodesk between August 4 and 26, 2020 reports that 60 percent of responding firms say they have had at least one future project postponed or canceled because of the coronavirus, and 33 percent report having projects that were already underway halted because of the pandemic. Additionally, the share of firms reporting canceled projects in August nearly doubled since the survey conducted in June, when 32 percent of respondents reported cancellations.

 

The survey also found the coronavirus has had a negative impact on firms’ confidence in the demand for future projects. Only 42 percent of firms report their volume of business has returned to the same level as last year, or is expected to do so in the next six months, compared to 52 percent who held this view in AGC’s June survey. Another 37 percent expect returning to normal levels of business will take more than six months, while the remainder don’t know.

 

Labor Shortages

The same ACG workforce survey found that while “the coronavirus has harmed the construction industry, prompting project delays and cancellations, layoffs and furloughs, it remains difficult for a majority of firms to find craft workers to hire.” Results from the survey found that 52 percent of firms are struggling to fill some or all hourly craft positions, especially openings for laborers, carpenters and equipment operators. 

 

Ken Simonson, ACG’s chief economist added, “Ironically, even as the pandemic undermines demand for construction services, it is reinforcing conditions that have historically made it hard for many firms to find qualified craft workers to hire.”

 

Global Supply Chain Disruption 

Global supply chain disruption due to COVID-19 affecting the construction industry

The COVID-19 crisis has had a global impact and caused disruption within every element of the supply chain. Suppliers, manufacturers, subcontractors, banks and the like all have been impacted in various ways, creating the need to develop mitigation plans for all aspects of business. 

 

According to Beroe Inc., a procurement intelligence firm, “the global construction industry will face disruptions for next 3-4 months from the pandemic as companies globally are being squeezed by the coronavirus outbreak, through labor market and supply chain disruptions.” Furthermore, “companies with worldwide supply chains may see tier 2 and tier 3 suppliers highly affected by disruptions related to the pandemic. The construction industry may experience constant supply issues surrounding construction equipment and materials from Asia.”

 

Final Thoughts 

Now, more than ever, it’s imperative to keep a constant pulse on your company financials and project costs—and we can help. Premier Construction Software’s all-in-one, cloud-based solution allows you to easily compare the original, current and estimate at project completion and account for anticipated costs. With over 20 customizable fields, and full drill down capability, project managers have access to all the job costs and accounting details they need to make more informed decisions.

 

And while the increased costs and other financial implications caused by the coronavirus pandemic are beyond any one person’s control, there are ways you can reduce other costs in order to mitigate the overall financial impact to your construction business and future projects—for example, by improving efficiencies across your team through automating complex processes to save you time and to reduce human error.

 

To learn more about how our software can help you save time and money, click here to schedule a personalized product tour. 

 

Author Biography:

Kathryn Dressler is a content strategist with more than 10 years of experience across the spectrum of marketing services, including blogging, social media, public relations, copywriting and editorial services.