In partnership with Procore Technologies, Dodge Construction has released the results of its 2022 Top Business Issues for Specialty Contractors Report, which highlights key issues impacting speciality contractors, including workforce management, technology and profitability
The 2022 Top Business Issues for Specialty Contractors Report aims to help businesses understand recurring trends better while broadening industry awareness of the advantages of leveraging digital solutions.
This global research was completed by five types of speciality contractors: mechanical, electrical, plumbing, steel and concrete. Key findings include:
Labor shortages and supply chain issues continue to afflict the industry
The research found that over 90 percent of speciality contractors report their projects have been negatively affected by a shortage of skilled labour. Experts anticipate the current shortage to worsen: on average, 33 percent of the current workforce is likely to retire in the next five years.
The labour shortage, alongside supply chain disruptions, is having a significant impact on the industry. About one-third of speciality contractors cannot pass materials cost increases on to owners on half or more of their projects. This is highest among steel contractors (43 percent) facing a very volatile cost market. Speciality contractors identify poor resource management (ie: labour, materials, equipment) and poor client communication as top drivers of rework.
Speciality contractors most frequently cite construction technology investments to counter the negative impact of labour shortages to improve productivity.
Rework is significantly impacting profit margins
Poor resource management often drives unplanned rework, which is a key drain on productivity, schedule management and cost control.
In addition to that, unbillable change orders represent major lost revenue, especially for larger companies. On average, 30 percent of project revenue is lost because of unbilled and unpaid change orders, according to survey respondents.
Construction technology can help alleviate some of the industry’s most pressing challenges
On average, specialty contractors report that 20 percent of workers’ time is currently spent on low-productivity tasks, such as tracking down information or documenting information on paper.
According to the report, an average of 39 percent of respondents state they still primarily use whiteboards, spreadsheets and other outdated processes. This lack of standardized processes hurts field-to-office communication, negatively impacting the effectiveness of key project processes.
Will Lehrmann, head of product, speciality contractors, at Procore commented: “The challenges specialty contractors are faced with today highlight the need for a connected platform built to address their needs.
“Several key takeaways show that the power of technology can help improve productivity and efficiency—as well as combat the workforce and skill shortages—that many specialty contractors are still facing.”
For contractors to advance and evolve to meet the needs of their clients, the report suggests company leaders must identify where inefficiencies are present within their organizations and adopt more dynamic technology solutions to address them.
Best practices for technology evaluation and implementation include:
- Identifying needs before evaluating options
- A phased roll-out plan
- A structured process for engaging key stakeholders
- Metrics to determine success
Steve Jones, senior director of industry insights research for Dodge Construction Network added: “Specialty trade contractors are vitally important to the construction industry.
“Dodge and Procore partnered on this research so these companies can better understand how their peers are performing and what could improve their critical outcomes. We sincerely hope these insights will help them operate more safely, efficiently and profitably.”
To learn more, download the report.
