Top 8 Organizational Challenges in the Modern Construction Industry

The worldwide population is growing, and the world is changing faster than we can imagine. However, let’s not forget that as the population grows, most people are moving from rural to urban areas as well. As a result, this is causing the demand for construction to reach new climaxes. 

After all, construction is one of the largest industries in the world and accounts for a percentage of the global GDP, which is expected to grow even more in the future. However, there are always challenges you have to face with every profitable industry and don’t think there aren’t any in the construction world.

Don’t go anywhere because, in this article, we will be discussing the top organizational challenges the construction industry is facing. 

Let’s dive right in! 

8 Organizational challenges the construction industry faces 

1. Poor productivity

As of now, the barriers to entry are pretty low, so there’s not really that much competition going on in the market. However, there’s no need for too much competition to damage your reputation and profit margins. The best approach you can undertake is to invest in newer technology and better practices. 

These types of issues arise with labor productivity. Some businesses have benefited from a massive increase in labor productivity, while others have remained the same in the past few decades. However, according to statistics, the overall average increase of labor productivity has only increased by 1% in the past two decades! 

Why is productivity so important? It’s important because of how effectively you use your time. According to a study, the construction industry claims that only 15% of work is done right and efficiently. This is because lots of time in construction is wasted by waiting for materials and equipment, taking a few breaks, and traveling from one destination to the other. 

This poor productivity causes construction companies to fail and lose to their competitors. It isn’t an easy obstacle to overcome. This is where they get trapped in trying to increase productivity levels, avoid profit margin losses,s and generate the set amount of profits they want to achieve. 

2. Compliance regulations 

Technology is evolving fast, and let’s not forget that rules and regulations have to keep up with it. However, continuously keeping up with regulations isn’t easy, especially when you live in different countries that are affected by these regulations. Compliance rules include international laws, country-specific or super-specific, and even local rules. Sometimes, you may have to comply with rules that your city only implies. 

It’s not difficult to miss a message or make a mistake during construction, but whenever you fail to comply with rules, this can turn into a nightmare for the company’s reputation and finances. Nevertheless, it’s always good to practice following the rules and re-read through them to ensure you are staying up to date. 

Alternatively, you can publish a construction change order form on your site in case there need to be any amendments to your construction details. It’s an effective way of communicating with your audience. 

3. Safety issues 

Safety issues--

Let’s be honest about this; the construction industry is a dangerous industry to be in, and according to statistics, there are, on average around 36 fatalities each year. A considerable percentage of total fatalities yearly come only from the construction industry. One of the most common was falling from heights, which accounted for more than 30% of the cases. This isn’t any surprise, knowing that construction has insane heights and involves dizziness and working with heavy machinery and insane working conditions. 

Considering the risks associated with construction, companies need to take the necessary safety measures and ensure the safety of their employees. Companies that don’t succeed in protecting their workers may even face financial and criminal charges. However, technological innovations have provided that we can promote a much safer environment in the construction industry. 

In fact, according to a study, 60% of the surveyed contractors claimed that wearable technology could enhance safety, while the rest believed that automated equipment or robotics would improve safety measures. 

4. Labor shortage 

There has been a significant drop in labor in many industries, especially construction ones. According to statistics, the number of unfilled positions in the construction market was at an all-time 2nd highest. The number, as of now, is around 400,000 positions, and it’s unknown whether this number will grow or not. 

The start of the recession has given industries a more challenging time in filling labor gaps. Let’s not forget that the construction industry has undergone many different generations: traditionalists, baby boomers, generation X, and millennials. 

The amount of generational change has set up a challenge for the construction industry regarding attitudes, work ethic, and overall behavior. Traditionalists are rarely in the workforce now; baby boomers are in the retirement phase. Moreover, the recession has caused skilled workers to leave the industry as well. 

However, as of now, most baby boomers are in charge of most construction companies, and millennials are the majority of the workers, according to studies. Some challenges faced due to the lack of workers are the increased project complexity and decreased work experience with the newer generation that has joined this industry. Thus, this increases risk, lowers the overall work quality, and increases safety concerns! 

5. Working on schedule 

Working on schedule 

Experience is a priority; however, it’s not a surprise if professionals make mistakes whenever they make mistakes with their scheduling if they manage it manually. This is a common issue that modern-day technology can cure to a high degree with the different types of automation systems, construction employee scheduling software, project management applications, and virtual task boards. 

This is a common issue that modern-day technology can solve, and its advantage is that it can solve this issue, if not entirely, at least partially. However, this wouldn’t be a long list if it dealt with the construction industry’s many other problems. 

6. Wearables 

Many construction workers globally aren’t wearing the proper equipment whenever they are working. Nevertheless, there is equipment with IoT devices that construction workers can use to monitor the situation in their current environment. For example, Zippkool developed clothing that keeps the body at operating temperatures and protects it against heat. 

Additionally, we have clothing that includes wearable sensors designed for construction workers who are carrying heavy machinery. Suppose the sensors start to detect that the worker is exhausted. In that case, it’ll notify the manager so they can consider giving the worker a break and avoid any more activities that’ll further fatigue the worker. Alternatively, we also have glasses, which allow workers to use manuals and follow instructions without any difficulties. 

Sadly, many construction workers worldwide don’t have all the required clothes and materials to work in their current environments. Let’s not forget that most of them don’t even have the proper clothes to keep their body at operating temperatures. 

7. Rise of material costs 

Rise of material costs

If the current recession has bought anything, it’s a rise in prices, which is pretty bad news for construction workers. It’s a combination of inflation, tariffs, increased demand, and much more. From last year, building costs have risen on average by 14%. Some of the expected increases in prices were in pipes, plates, iron, steel, and more. 

The combination of construction materials is rising in the long term, but the short-term ones are dropping. However, after the recession is over, there may be a significant drop in prices, which will favor people who work in the construction industry. 

8. Communication issues 

A common challenge in the construction industry is communication. Lack of communication in projects may be a direct reason the project doesn’t go as planned between different departments and teams. However, modern-day technology has made it possible for users to eliminate this issue. 

Construction workers can use smartphones to solve this issue and enhance communication. Whether by email, SMS, or even a phone call, if you use your smartphone, you can get many things done quickly. 

This can prevent many issues and misunderstandings that can be made during the project. We are humans, so mistakes can happen at any time. In short, technology has completely changed the game for us, but if you don’t use it to your advantage, you may suffer several communication issues in the construction industry. 

Wrapping it up 

That’s all for this article. These are the top 8 organizational challenges the modern construction industry is facing nowadays. Above all, these issues are something to be concerned about and shouldn’t be avoided. The rise in material costs, safety issues, and even other costs can really accumulate over time. It isn’t something pleasant, so your best bet is to always stay prepared for what may happen.