Top 5 Ways COVID-19 is Reshaping the Construction Industry

By | June 10, 2020
COVID-19 is Reshaping the Construction Industry

The novel coronavirus has brought the whole economy to its knees. With governments imposing strict lockdowns and closing international borders all around the world to slow down the spread of the virus, the whole world is paralyzed. And businesses are nowhere near equipped to handle the full impact of the crisis. 

The COVID-19 crisis has crippled the construction industry, mainly due to disruption in the global supply chain.

Business owners need to understand that the construction industry will never be the same again.

Companies need to take the risk seriously and be adopt changes to continue operations or else face a downturn. 

How the COVID-19 Crisis is Reshaping the Construction Industry

In the face of the COVID-19 crisis, business owners are confused when it comes to the debilitating question.

How to respond to the crisis and increase resilience across the business? The first step is to understand that things will never be the same, and it is time to adapt. 

Here are the top 5 ways how COVID-19 crisis is reshaping the construction industry and bringing in new norms and regulations.  

1. Remote Work 

A lot of industries have started remote work set up in response to the COVID-19 crisis with an increase in video conferencing and online networking.

However, this ideology might be a bit difficult for most construction businesses because the sector has always enjoyed traditional office work arrangements. 

Even though most of the construction business owners are reluctant to adopt remote work arrangements, unfortunately, COVID-19 has made it necessary if a company wants to continue operations.

Even though the construction workers need to work on-site, however, office roles like HR, procurement officer, and client relations can work remotely to avoid exposure. 

As business owners realize the benefits of remote work arrangement in terms of increased productivity during economic downturns, remote work will become a norm in the construction industry. 

2. Revisiting Payroll Policies

Payroll has been in the limelight because of the COVID-19 pandemic. Now it is very critical for business owners to provide support and compensation to the employees when there is a financial crunch.

Because of the pandemic itself and the consequent economic decline, it has become challenging for businesses to make payroll and salaries on time. 

As construction companies are faced with this challenge and formulating business plans, this is the perfect opportunity to revise payroll policies and introduce much-needed changes to make the business more efficient.

For example, as physical bank checks and payroll distribution is almost impossible, companies should think of ways to digitalize payroll infrastructure with remote accessibility. 

Companies should also revise their business policies, including legislative guidelines regarding work-tie reduction, compensation to employees, and revised filing deadlines.

We suggest consulting a construction management expert regarding new guidelines and preventing any payroll issues. 

3. Emphasis on Health and Hygiene Practices 

The coronavirus pandemic has highlighted various shortcomings in the healthcare system.

News about shortages in the protection equipment is very common as the pandemic reaches its peak.

As of now, there has been no vaccine yet for COVID-19, so the only way to slow down its spread is through proper hygiene and health practices. 

Therefore, we will see a bigger emphasis on hygiene and health safety practices on construction project sites.

Companies will have to put specific Standard Operating Procedures (SOP) to slow down the spread of the virus.

Some of the provisions include the use of face masks, regular handwashing, disinfecting the equipment, and social distancing measures.

These practices will eventually turn into habits that will stay even after the crisis is over. 

4. Reviewing Contractual Provisions 

COVID-19 crisis has highlighted the importance of important clauses of the contracts in construction projects.

Some of the standard inclusions in the contract include the force majeure and impossibility of performance clause.

All construction business owners must consult with a delay expert in reviewing their contractual provisions to cancel the job or settle the contract due to delays caused by the pandemic. 

As many contractors are facing disruptions and delays in the construction work, they may be unable to finish the project on time or at all.

Therefore, these provisions will help them cancelling the job or securing their payment.

The force majeure provisions and the impossibility of performance are critical in this crisis.

Contractors need to revisit their contractors to make sure it addresses issues like the COVID-19 pandemic in the future. 

5. Supplies are sourced locally

In the pre-pandemic world, the construction sector enjoyed a global material supply chain with international sourcing mainly from China.

Companies were able to forecast their demand for construction material and placed orders through the global logistics network.

However, after the pandemic, there has been a major shift in the construction material supply chain. 

The lockdown measures and closing of international borders have forced many producers to shut down, and as a result, it has adversely affected the global supply chain.

In response to this disruption, construction business owners need to look for local sourcing and reassess the current construction supply chain to mitigate the disruptive situation. 

Local suppliers are more reactive then international ones, so they will quickly adjust to the demand and in response to the crisis.  

COVID-19 Crisis – Change for the Better!

We are months into the COVID-19 crisis, but the situation is still unprecedented in various ways.

However, it is essential for construction business owners never to lose sight of the future and how the pandemic is reshaping the industry.

If you still have doubts about how the crisis will affect your business, then consult with a construction project management expert to gain insights into the possible variables. 

Take this situation as a learning opportunity and incorporate change in your business for the better.