Does post-pandemic construction bring threat or opportunity? Three ways AEC firms can move forward in 2022 with confidence.

Posted by Deltek on February 15, 2022

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Since the COVID-19 pandemic forced much of the world to lock down in early 2020, industries have been forced to adopt new technologies to come out on top. AEC is no exception.

Today, firms find themselves in a transformed world, but with more rigorous digital tools and processes available to successfully ride the waves of change. As industry reports release their 2021 summaries and predictions for the future, after skipping 2020, they’re showing readers that the future is full of opportunity and promise.

In this blog, we’ll take a look at what comes next for Built Environment firms and explore the three tips industry experts offer for firms that want to hit the ground running in the post-pandemic market.

After a challenging eighteen months, opportunity awaits

After a year’s hiatus, Building Magazine’s top 150 consultants list made a triumphant return at the end of 2021. While it, of course, includes a list of the most significant industry players, around a third of whom use Deltek’s solutions, it also surveys hundreds of firms on how they feel about the future of the industry. Across its 350 respondents, it finds a great deal of optimism now, compared to pre-pandemic.

For instance, 47% of firms surveyed say their margins are moving up. By comparison, only 35% saw their margins moving upward in 2019. Likewise, just 1% say they’re pessimistic about their current economic outlook compared to 25% in the year before the pandemic broke out.

New working patterns create a complex blend of reward and risk

Most of the other responses are equally encouraging, but some present a mix of optimism and challenge. For example, over three-quarters of respondents report that staff will be encouraged to pursue home-working. While that’s a huge win for workers seeking more flexibility, there are complex questions that must be answered about how a blend of home-workers, office staff, and those on-site can gel and deliver projects efficiently.

And there’s a broader question of whether home working is the right move at all for certain firms. As Core Five partner James Clark says: “When everybody was at home, people were working harder and longer during lockdown. But they didn’t cover the same amount of ground [as they would in an office] and were 5% to 10% less productive.”

Hiring plans: optimism meets realism.

A significant majority (90%) plan to increase staff levels over the next year compared to just 69% in the 2019 survey. This ambition is commendable, but it meets head-on with the current climate of labor shortages.

According to the Office for National Statistics, employment in the construction sector fell from 2.3 million in 2017 to 2.1 million at the end of 2020, a 4% fall in UK-born workers. And the impacts of Brexit become clear here as well, as this figure shows a 42% fall in EU workers. It all adds up to 38,000 jobs left unfilled in the sector between May and July this last year, a 20-year high in job vacancies.

The question remains: will positivity across the industry win out against the ‘great resignation’ we’re currently seeing? Or will the two clash?


 

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What can firms do to make the most of the opportunities available?

On the path to success, firms must deftly avoid the challenging market conditions ahead, while making moves to capitalize on the many opportunities available. These three steps can help firm leaders move forward with confidence:

1. Collaborate on digital adoption

The initial shock of the COVID-19 pandemic forced many firms to adopt new digital systems – and those organizations are now waking up to the transformative power of digital processes.

Savvy firms will likely be questioning how they can further accelerate their digital development. But the industry experts we’ve spoken to advise against asking these questions in a vacuum.

Craig Finn, Head of Preconstruction at Henry Boot Construction suggests collaborating with partners to ensure you adopt digital systems that align with your business goals and are compatible with your broader digital ecosystem. “Our digital transformation program has been heavily influenced by what our supply chain partners are doing and what they’re learning,” says Finn.

Nick Nieder, Deltek’s Director of Product Management agrees that building digital systems can’t be done without talking to those outside your business because “it’s not just about building a structure, it’s the client experience.”

2. Promote a more attractive industry for workers

While there will certainly be increased competition for talent in the wake of the great resignation, some industry players see technology as a way to open up the industry to new types of talent.

David Hancock, Construction Director at the government’s Infrastructure and Projects Authority expects rising demand for new types of work, such as drone piloting, to attract a more diverse cohort: “That will allow people who haven’t previously considered construction to come in. Not only will it allow better diversity across genders, but we’ll also have more roles for people with disabilities.”

3. Use technology to further increase efficiency

Anecdotally, we’ve seen some firms make amazing leaps forward in their digital maturity since March 2020. However, our most recent Clarity survey found there’s more to be done, with just 1% of architecture and engineering firms today describing themselves as digitally ‘advanced’.

But even as firms embrace a digital future, our experts see whole swathes of technology that are currently untouched in construction. Cheques still form the bulk of payments instead of digital transactions, and while blockchain could provide further payment security, it’s but a twinkle in the eye for many construction IT leaders.

Hancock sees significant opportunities for firms to adopt techniques and technologies from other industries such as retail and manufacturing: “we don’t really do just-in-time delivery in the construction industry,” he observes. “We do just-in-the-week.”

There are many paths to success. Which one will your firm take?

We’ve discussed the opportunities and risks awaiting today’s construction companies and explored three ways to make the most of the coming years. But in truth, there are many ways firms might navigate 2022 and beyond to find new levels of success and growth.

Our recent white paper, How can construction firms build on the opportunities from the pandemic’s digital revolution? explores these different options in greater detail, and looks at how construction firms can make the most of the opportunities they discovered during the pandemic’s digital revolution.

Get the white paper now and learn how you can enhance collaboration across remote teams, navigate future disruption and set your firm up for success.

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