The world could not have anticipated in late 2019 just how many radical changes it was about to experience. Many of those changes are still ongoing. The COVID-19 pandemic first started to make headlines in late 2019. It really took off in 2020 as it began to sweep the globe. Businesses and individuals of all stripes had to consider how they would adapt to the rapidly changing reality all around them. Some have done better at this than others. But we could all stand to learn from the events that have already unfolded in order to prepare for the future. In particular, we want to zoom in on how the construction industry needs to adapt to the challenges that it faces in this pandemic world.
Record numbers of Americans have quit their jobs since the start of the pandemic. There are numerous factors that one can point to as to why this is happening. Some employees are concerned about the potential risks to their health and well-being that the pandemic poses. Others worry that if they don't make certain moves right now, they will not have the same employment opportunities in the future. Then there are some who took the money offered by the government in the early days of the pandemic and have found other passions to pursue. This combination of factors has meant that the demand for labor is near an all-time high. However, the supply has not picked back up.
Harvard Business Review provided some details about this. They pointed out just how powerful the surge of resignations from jobs has been when they stated the following:
According to the U.S. Bureau of Labor Statistics, 4 million Americans quit their jobs in July 2021. Resignations peaked in April and have remained abnormally high for the last several months, with a record-breaking 10.9 million open jobs at the end of July. How can employers retain people in the face of this tidal wave of resignations?
That many people leaving in a single month is practically underheard of. Those high numbers of people leaving have remained stubbornly high throughout the course of the ongoing pandemic. This means that there is no legitimate reason to believe that labor is going to come surging back into jobs that they had previously left.
Construction managers and others who are in the business of hiring and firing employees to work in the construction industry should prepare themselves for a prolonged period of increased labor costs. It seems that just about the only way to maintain a steady workforce is to offer premium pay and benefits. There are millions of unfilled job openings right now. Hence, many employees feel that the power has shifted into their hands somewhat, and they are likely right about this.
The labor union movement in the United States has been bolstered during this pandemic as workers have begun to demand increased rights and pay. Large-scale strikes and walkouts have made headlines again in the last few years. Thus, there is little that a construction manager can do other than embrace the reality of the economy as it stands now and attempt to provide the best offers that they can for the labor that they desperately need. If they can outmaneuver the competition like this, then they have a legitimate opportunity to perhaps ride things out.
Another headline-grabbing issue giving construction managers migraines involves the supply chain disruptions felt all over the globe. Shipping containers used for moving products have started to become extremely scarce in our pandemic world. Many of these containers were diverted at the beginning of the crisis from their typical routes. They helped move masks and other protective equipment to different parts of the world that they did not typically travel to. That wouldn't be such a big deal except for the fact that getting the containers back to their regular routes has proven to be a logistics nightmare.
There are some glimmers of hope that the worst of the disruptions may now be behind us. But that has given little comfort to business managers who are stuck paying far above market rate for the containers that they are able to get where they need to go. The demand for these containers remains so high. They are being demanded by so many companies all at the same time that prices have gone through the roof.
Check over the fine-print details of all contracts that you currently have active.
Look to local suppliers for certain goods that you may be able to purchase from them.
Try to add diversity to your company's personal supply chain when possible.
Help customers understand that delays in their projects may be somewhat inevitable at this time.
It is not pleasant to tell customers that the construction that they have ordered and paid for might be delayed. Those customers might become understandably upset. You might feel like you have failed to deliver on a key tenant and promise that your business has made.
However, you should try to cut yourself some slack. Understand that everyone is going through the same crisis that you are. There are similar issues playing out with construction industry companies beyond your own.
There is a case to be made for taking on less work at this time if you honestly know that the company simply cannot meet the supply needs for those projects. It might be better business to be honest about this with the prospective customer. Let them know that you would be happy to work with them on a project in the future. However, remind them that you are currently unable to provide them with the assistance they need. That outcome means deferred revenue. But that is better than revenue being denied if you were to make a bad impression on the customer and lose the opportunity to work with them at all.
Be clear, be concise, and check all of your details. Do the best that you can to ride out the storm. These issues will begin to resolve as time goes on. You just need to prepare how you can deal with them in the meantime.
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