While talking with clients around the country I am finding they are having second thoughts about being able to bid upcoming work with any level of profitably. This is due to two areas of concern.
- The amount of competition that is expected on the upcoming projects.
- The lack of experienced estimators and project personnel to build the work.
Virtually all companies expect to see increased competition on fewer projects for the next couple of years. This is being figured as the new norm.
Many in the construction industry are not only reducing staff with layoffs, they are losing staff to the people that are getting out of the construction industry. The ones leaving the industry tend to be the ones with the experience. They have been through the ups and downs before – and they see this as a time to get out.
The companies are not replacing these people – the work load doesn’t “justify” hiring replacements or hiring and training new people. This is a short sighted policy that will hurt the industry in the long term. For estimators, it takes two to five years to gain the experience need to be good. With the experienced people leaving, where will the training come from? Similarly with project managers, superintendents and the others in the industry, where will they get the training? This also applies to the craft workers. What apprentice programs will succeed without the experienced tradesmen to show them the ropes?
It is apparent the economic situation will have an impact upon the construction industry beyond the next year or two. It may have a long lasting negative impact on productivity for years to come. This can bring on lower quality construction practices that will impact profits for contractors and the project delivery cycle for the owners. Short sighted solutions are not the answer, we need to be looking for long term solutions!
