Construction Industry Trends: September 2019 Roundup

Some significant transportation infrastructure projects are close to becoming reality after committee approvals in September. Nearly $86.6 billion in transportation funding for 2020 was approved by the Senate Transportation, Housing and Urban Development and Related Agencies Appropriations Subcommittee in mid-September as part of a larger funding bill. The appropriation is a slight increase ($167 million) over the 2019 bill. The largest chunk of the funding ($46.3 billion) will go to highway projects across the United States, though the bill includes $2.8 billion for rail projects, $13 billion for Federal Transportation Administration projects $2 billion for transportation safety projects and nearly $1 billion for maritime and port projects. The bill also allocates $17.7 billion in budgetary resources for the Federal Aviation Administration. Meanwhile, New York City’s Metropolitan Transit Authority proposed a $51.5 billion budget for its 2020-2024 capital plan. The plan is 70 percent larger than the agency’s current plan. The plan includes more than $40 billion for improvement of the city’s subway system and busses and $3.3 billion in bridge and tunnel improvements.

The Takeaway: This is a great sign, showing that investment in infrastructure is not something elected officials are going to let die on the vine. Contractors have been worried about how an impending recession might affect business. But with several more years of projects being planned for and funded now, especially for heavy highway and civil contractors and general contractors in growing commercial real estate and housing markets, it appears there will continue to be no shortage of work. Now it’s time for contractors to find the right solutions to increase construction productivity and start knocking these projects out.

A September article in Construction Executive magazine looked at how recruiters and contractors are revamping their traditional recruiting strategies to appeal to younger, more tech-savvy professionals. Recruiters are targeting mobile devices and applications to get in front of potential candidates. Meanwhile contractors are connecting with candidates via social media, hiring recruiting firms and adding program and career managers to help mentor and build up younger workers – using technology to find common ground for learning. One contractor noted in the article, was able to onboard more than 200 new hires over a two month period, using applicant tracking software.

The Takeaway: The path to getting buy-in on construction as a viable career path from the next waves of labor forces runs squarely through technology. We’ve been hammering this point home on this blog for several years now. Especially as business and commerce worldwide increasingly moves to the cloud, its important to modernize not just for the sake of the benefits these technologies can provide but ensuring that a viable workforce will continue. Few people want careers where they have to use outdated technologies and manual processes. Already perceived as dangerous and challenging contractors need to show that construction jobs can be engaging and innovative – where professionals can work smarter and grow with technology.

A September article in Construction Dive noted that contractors should be preparing to comply with changes to federal overtime regulations. The U.S. Department of Labor updated the overtime rule on Sept. 24, establishing a new minimum salary threshold of $35,568 for overtime eligibility. The update implements the Fair Labor Standards Act’s overtime mandate, making more than 1.3 million additional U.S. workers eligible for overtime pay. The rule, which will take place Jan. 1, will allow employers to count non-discretionary bonuses, incentives and commissions as up to 10 percent of an employee’s salary as long as they are paid annually. Though the new regulations could still face legal challenges, HR experts that Construction Dive spoke with said contractors should still be prepared. David Miller, an attorney at Bryant Miller Olive told Construction Dive that the new rule is expected to impact mid-sized employers the most, especially if they’re not already tracking workers time.

The Takeaway: This is yet another reason why having time management and labor tracking solutions in place is vital for contractors. In addition to contractual and union requirements and job cost tracking, staying on top of labor hours and labor costs can make or break projects profitability. We’ve seen demand for construction-specific HR management solutions spike among contractors as they look to gain more control of labor costs, as well as streamline HR processes and better attract/onboard new talent.

The time for contractors to modernize their operations is upon us notes a September article on ForConstructionPros.com. The article, which features Viewpoint’s own vice president of product management, Jeremy Larsen, notes that many contractors are still relying on outdated technologies or manual processes, but are reluctant to change. Larsen maps out the process for modernization and why the benefits far outweigh any reservations contractors might still have. “Those that continue to resist technology could soon find themselves at a disadvantage, going up against competitors that can work smarter and faster,” he said.

The Takeaway: Ok, so shameless plug aside, we wanted to highlight this article because Larsen is absolutely right. As global business races to modernize and more and more contractors are moving to cloud-based software to run their organizations, the days of manual processes and old construction software are on the way out. Already clients are demanding the contractors they hire for projects work with modern technologies and real-time collaborative software and communication vehicles. And the younger generations of construction professionals are much more tech-savvy and will continue to push the industry toward innovation. Unlike years past where hardware and software investments were huge capital investments made roughly every 10 years or so, today’s cloud-based solutions allow contractors to smartly scale for the future by providing an integrated platform that allows them to innovate in real time as technologies advance rather than replace whole fleets of outdated systems. Sure, change can be hard, but it’s inevitable, and this is one change contractors should be making sooner rather than later.

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