Throughout a prolonged period of economic uncertainty, it is unclear how current market conditions will place pressure on industries. Inflation and the current cost-of-living crisis in particular have caused many challenges for the construction industry, for both the delivery marketplace and employees.
It is now more important than ever for businesses to find ways to thrive during these difficult times and refine their processes. Here we discuss some of the ways these companies can support their employees, improve their cash flow and come up with ways to reduce their supply chain costs.
Support employees
These times are also challenging for the employees of construction businesses, who are likely to be as productive if they experience financial worries or feel their employers are not supporting them. Surveys have found 48% of those with financial stress report lower sleep quality and one in ten believe it affects their ability to perform well at work. Above-inflation pay rises would be the obvious solution to provide employees with the assistance they need but unfortunately, businesses themselves often have cash flow problems becasue of increased construction costs.
A starting point may include formulating a plan that will signpost workers toward practical support. There is also the option to offer benefits packages, which can provide employees with discounts on travel, healthcare and childcare.
Look for funding options
Whilst it can be dangerous for construction businesses to get themselves into more debt, there are financial options available that are specially designed to help provide certainty and stability if cash flow becomes an issue. This is a particular concern in the construction industry, given payments are notoriously for arriving late, including partial payments for work that has not been fully completed.
One type of funding that could prove valuable is invoice financing, which allows a value of the money tied up in unpaid invoices to be retrieved instantly. The finance provider takes a cut of the invoice amount, meaning no further payments are usually needed. This can allow businesses to continue operating smoothly, saving time and reducing stress.
Find ways to reduce supply costs
Early engagement is key to discussing the potential challenges that may come with delivery. It is recommended that conversations cover issues within the team and what strategies could improve processes going forward. Consider the specification of the project and how changes could be made to reduce material and construction costs – are there alternative approaches that can be implemented or cheaper materials that can be utilised to deliver the same results?
The increasing cost of construction materials are unlikely to plateau for a while now, so ordering supplies at the earliest possibility is ideal and speaking with suppliers to see if there are negotiations to be made can maintain good rapport and avoid price increases. Prefabrication can also reduce waste production during construction projects and the need for more labour due to a decrease in the installation of particular components.
