From land acquisition to materials purchasing and equipment use, there are countless moving pieces involved in construction. If something unexpected occurs — like a severe weather event or shipping delays for countertops — a project can fall behind schedule and lose money. This is why risk management is so vital; it gives teams the power to bounce back quickly.
There are multiple ways to minimize risk in your organization, including improved resource utilization and better project planning. The right tools, like takeoff software, wearable technology, and automated systems, can give your team the resources it needs to overcome almost any obstacle.
Here are 12 different ways to reduce risk within your organization so more projects get completed on time.
A risk assessment details any potential threat to your project. These risks can range from weather problems that cause delays to safety issues related to the materials you use — like electrical wiring.
Risk assessments don’t need to be complex. You can pull from past data and run through a checklist of potential issues to look out for before each project starts.
Your goal isn’t just to identify the risk. You also need to mitigate it. Make sure you have a plan to avoid, transfer, or reduce the risk of facing any problems with the project. This way, if a crisis arises, you will be ready to respond.
Wearable technology is one of the most exciting safety trends on construction job sites. Sensors on equipment can better prevent accidents by providing alerts when objects and people are nearby. Smartwatches can detect falls, alert workers to the need to drink water, and enable hands-free communication. There are even smart hard hats that have multiple safety features built-in.
Consider whether your business can utilize any of these tools and how they can reduce your risk of accidents — eventually lowering your equipment repair and workers’ compensation costs.
Multiple tasks can be automated in construction. Robots can take care of someone of the most labor-intensive and dangerous tasks, reducing the risk of injury for human workers. Automated technology can also increase efficiency.
For example, automated excavators and skid steers can easily move terrain and prepare a job site for a concrete foundation. Digitized concrete pours can prevent wasted materials as the cement won't dry before it is used.
When you talk about risk in construction, most people immediately think about injured workers or damaged equipment and materials. However, construction companies are also at risk of cyber threats. Your data contains everything from the employment information of workers and contractors — including Social Security numbers — to the financial accounts of your company.
A major part of any company’s risk management is protecting its data through effective, cloud-based storage.
Detailed project management provides clarity to organizations. It allows you to see what tasks need to be completed and any potential roadblocks that could prevent upcoming work. This tracking can also prevent downtime. If you know what tasks are coming down the pipeline, you can start gathering materials and scheduling workers for improved workflow.
Evaluate how you currently track tasks and map out projects. It’s in your best interest to update your processes to make them more modern, detailed, and effective. Plus, once you get a system in place, you can simply replicate similar jobs and adjust them for your current work, making task tracking a fast and easy part of project planning.
Building Information Modeling (BIM) brings in different stakeholders to map out the lifecycle of the construction project. Instead of one person mapping out an entire plan, multiple parties share their insight into when and how they will get their part of the job done.
For example, your concrete subcontractor will tell you when they need access to the site to lay the foundation. Your electrician doesn’t need to be part of these discussions and will highlight their role later on.
This process allows your subcontractors to operate on their terms and mitigate their own risks. It also means you don’t need to be an expert in everything. BIM allows you to take a higher-level leadership role instead of micromanaging every step.
When you receive a request for proposal (RFP), you can decide whether you want to submit a bid. Too often, companies bid on projects that are out of their expertise or are too large to handle just to keep growing their business. However, it is better to be strategic about the projects you take on, especially if you are looking to mitigate risk.
Consider how you calculate area dimensions and the software tools you use to make sure the areas are measured accurately and efficiently and are within a scope you can handle. You can also use cost estimators to set a fair price and see whether the job would be profitable for you in the long run.
It’s better to walk away from a high-risk job that could cost you more than you want. With the right quantity surveyor software, you can get an idea of the scope and risk that comes with each RFP to see if you want to submit a plan to it.
Consider who you work with in a professional capacity. Some people avoid going into business with their friends or romantic partners because they want to keep those two aspects of their lives separate. Not every married couple can also have a working relationship.
Also, develop processes within your organization to carefully vet contractors, vendors, and employees. Develop a code of ethics and conduct for anyone who represents your brand. This can protect your reputation in the event that your company becomes associated with bad behavior from a contractor or vendor.
Collaboration tools are essential for preventing miscommunication. They create a paper trail of who agreed to what and which deadlines have been set. Not only is it easier for multiple stakeholders to contribute to BIMs through collaboration tools, but you can also refer to any agreements by vendors if they miss their deadlines. This can keep a project on track and mitigate losses.
A few collaboration tools to consider for your team include take-off software for your contractors and communication tools like Slack or Microsoft Teams. You can also invest in mapping tools to draw out plans for various projects.
Develop processes to listen to clients, take notes on their needs, and develop approval checks throughout the build. If you and your client aren’t on the same page, you could end up creating something they aren’t happy with. You also might agree to a larger, more expensive project than you realize.
This is another place where software systems can help you out. You can create virtual mock-ups of what the client wants and ask them to sign off on these plans before you execute them.
If you are on the fence about retaining a contract lawyer, know that their expertise is worth the investment. A lawyer will review all of the terms within a contract and make sure you are protected. They will check for unreasonable deadlines or high-risk clauses that your clients add. Catching these problems can reduce your chances of future litigation while providing more insight into what both parties are agreeing to.
Never sign a contract unless you are completely sure what each clause means and you agree to all of the terms.
Effective risk management is developed over time as you grow your experience. The more problems you face, the more you can look out for them in the future. With the right documentation and planning tools in place, you can learn from today’s problems and reduce your risk for tomorrow.