Group vice president at Deltek, Neil Davidson, examines the construction market challenges facing the industry and what action firms can take
Managing an architecture or engineering firm during economic volatility and construction market challenges can feel extremely daunting.
I see many of our 12,000 Architecture and Engineering customers thriving through careful planning, adaptability, and a proactive approach, to achieve above average industry growth.
Preparation, quality of decision making-and mindset all go a long way in determining success and giving a crucial edge that permeates throughout the organisation.
So, what does it take for organisations to thrive even in challenging markets?
Here we offer four areas of consideration that may help architecture and engineering businesses stay poised and capture the most growth.
A purpose that extends beyond profits and inspires employees, customers, and new talent
Every business needs a plan that aligns with its goals and objectives. This must be flexible and adaptable to changing circumstances. While the UK may have narrowly avoided a recession, the current economic climate looks set to continue and remain uncertain.
It is therefore critical to take an in-depth look at your business plan, consider different market scenarios and make the necessary changes to ensure you can pivot if the need arises. Having an understanding of the types of projects that may or may not be on the horizon as well as areas of the business such as cash liquidity will enable organisations to concentrate efforts on projects and clients for whom they can make the biggest difference.
The next generation of workers consider ESG a priority
Equally, companies that build a coherent purpose into their business plan, such as community growth or a commitment to sustainability – will emerge from challenging times, stronger.
A human-centred, socially engaged purpose will not only create value for multiple stakeholders but have tangible impact on the bottom line; organisations that operate with a driving sense of purpose (beyond the goal of just making profits) outperformed the S&P 500 by a factor of 14 between 1998 and 2013. And this is not just a nice to have – expectations from customers and employees are abundantly clear. According to Deloitte, 70% of millennials, aged 22 to 38, expect employers to focus on societal or mission-driven issues.
Embedding the purpose at every level of decision-making – and not just leaving it at the margins – will inspire employees, customers, and potential new recruits, driving long-term growth. Leaders must go beyond articulating the purpose and ensure that they are demonstrating the steps taken to achieve it.
Treat talent as a scarce resource
The success of any company depends on its employees. Staff are your most valuable asset so understanding how to invest in their productivity and skills development is crucial. Furthermore, any employee churn can be a costly exercise during challenging economic times. Knowing where investment will really make an impact can ensure you are optimising your team and directing resources where they are most needed.
For example, competitive pay is a top attraction, but job satisfaction and loyalty can also come from offering innovative benefits and ways of working.
Organisations can look at data around project pipelines and staff feedback to see where they can foster innovation and a renewed commitment to their employees.
Incentives that promote a healthy work/life balance can help reduce burnout, such as flexible working models.
Often the benefits of the effectiveness and motivation of your staff outweigh the costs of implementing new incentives or processes. Articulating your renewed investments and benefits to employees, will drive loyalty.
Build a learning organisation to counter future construction market challenges
Demonstrating a commitment to continuous learning can also help organisations establish enhanced processes, solve problems, and strengthen the bottom line.
Embedding this as a cornerstone of your culture, however, can be challenging, and requires support from senior levels to achieve the greatest impact.
Successful companies will be characterised by their commitment to both individuals and wider teams.
For the former, consider making one-to-one coaching a feature, with robust knowledge-sharing processes in place. For the latter, consider re-evaluating training and development programmes.
Employees typically stay longer when they see a clear path into what their future could look like. Putting in the time to upskill workers is not only important for staff, but for the company as a whole.
It is a win-win situation: you get highly skilled employees trained to your business’ needs and your talent is motivated and able to efficiently carry out their roles.
Enhance your technology investments
The cost advantage of investing in industry focussed digital technologies increases the more they are used. Software that enables project intelligence, management and collaboration will put organisations in a better position to maximize profits and productivity and remain competitive in a downturn.
Equally, considering other innovative technologies, such as Robotic Process Automation (RPA), which can help organisations increase productivity and efficiency in both field and office settings will allow them to adapt to market changes, quickly.
RPA essentially performs transactional activities in IT applications the same way a user would. In short, taking on tedious, repetitive tasks.
Any repetitive, high volume and structured activities with limited variance can be delegated to your digital co-worker.
Doing so will free up valuable time for the team and allow them to focus on doing what humans do best, such as collaborating, brainstorming, inventing and investing in human relationships.
As technology continues to advance at pace, there are a growing number of opportunities to explore and attract younger generations to roles in architecture, engineering, and construction. These tools can benefit your company by improving communication, project management, and data analysis.
As the adage goes “by failing to prepare, you are preparing to fail”. With a proactive mindset and the correct strategies, firms can weather the storm and thrive, even in the most adverse of conditions.
