The construction industry is facing what many describe as its most significant obstacle—a critical shortage of skilled labor—at a time when demand is booming. Factors including a scarcity of trade workers, widening generational differences, and the imminent retirement of a vast number of experienced professionals creates unprecedented challenges for the industry. According to the Associated General Contractors of America (AGC), construction employment increased in 263 of 358 metro areas between May 2017 and May 2018. Officials warn that the number of skilled workers is dwindling and will continue to do so for the foreseeable future.
There are five main generations in the workplace today: Traditionalists (born between 1927 and 1945), Baby Boomers (born between 1946 and 1964), Generation X (born between 1965 and 1976), Generation Y or Millennials (born between 1977 and 1995), and Generation Z or Centennials (born 1996 or later). In the construction industry, most firms are privately held and passed on from one generation to the next. Today, Baby Boomers find themselves in charge of many construction companies, but embrace the Traditionalists’ approach to running the business. When asked about implementing technologies to increase efficiency and productivity, many of these Boomers will say, “My father, grandfather, and great-grandfather did it this way, and that’s the way it’s always been done.”
According to Vistage’s Q2 2018 CEO Confidence Index Survey, the construction industry has not been an early adopter of technology and executives will continue to hesitate to adopt new technology in the coming year. Nearly half of the survey’s respondents don’t expect any impact on their business in the next 12 months from technologies like artificial intelligence, blockchain, intelligent digital assistants and connected devices. Traditionalists and Baby Boomers aren’t entirely primitive, however. They helped the construction industry evolve from being dependent on shovels and hammers to increasing productivity with cranes, excavating equipment, and power tools like nail guns and pneumatic staplers. These generations are still hesitant to spend money on technology, however, because it may be viewed as a significant annual expense and not as quantifiable as hard assets like machinery and tools.
Construction Executive reports that an estimated one million construction professionals will likely retire by 2020, which means Gen Xers and Millennials will begin taking on more managerial positions in the industry. Because these generations grew up with many technological developments, they work well with computers and other digital tools, like using PDFs over blueprints. Tech-oriented Millennials have even more of an advantage, having grown up in a workplace with flexible schedules and remote employment, and utilizing mobile technology like instant messaging and cloud services to communicate and share data.
Many of today’s college graduates are surprised to learn how technically unsophisticated the construction industry is and may not accept a pending offer from a firm as a result. Construction companies are missing out on great marketing and employee retention initiatives by not exploiting all of the emerging technologies that reduce build cycle times and increase personal work productivity and net margin, which is generally 3-5% annually.
Unique challenges that have plagued construction companies for centuries — field mobility, worker safety, manually managing accounts payable — can become concerns of the past, as a new wave of technology designed exclusively for the construction industry promises to alleviate these issues. Just as two-way radios once revolutionized communications at the job site, web-connected communications are the new frontier.
These technologies offer distinct benefits for industry leaders—everything from enhanced measurement abilities to improved safety protocols to central, cloud-based storage. As other enterprises rapidly embrace digital tools, construction businesses can likewise adopt tech advancements to carve a respected space within the market and distance themselves from the competition.
AP Automation: The Bottom Line
Project managers, controllers, and CFOs can all benefit greatly from accounts payable and payment automation, saving time and increasing productivity in the process. In addition to improving efficiency through streamlined and automated workflows, construction professionals can:
- Better manage costs through visibility into their cash flow and invoices 24/7
- Increase employee output and satisfaction through anywhere, anytime access from any location with Wi-Fi via your connected device
- Scale for growth by implementing automation to mimic the current process and improve the routing and approval steps
Technologies Construction Companies Should Budget for in 2018
Best-in-class construction companies are at the forefront of the technology revolution and are poised to see significant improvements in 2018.
Interested in learning how your construction company can distance itself from the competition by investing in technology? Read our eBook, Technologies Construction Companies Should Budget for in 2018, and discover how solutions like AP and payment automation will help streamline processes, leading to significant cost savings, higher ROIs, and happier customers. To download your free eBook, click or tap the image below!