Business Tips

Managing construction risk

Managing risk on your construction sites

Anyone who’s spent time in the construction or field service industry knows firsthand how high-risk the space can be. Job site injuries, natural disasters, contractual hiccups and more can all creep their way into your workflow—many causing irreparable damage or a large amount of cash to remedy. Yet, if your mindset is proactive and enough work is frontloaded, there are proven ways you can slow down and minimize risk across all your job sites. This is especially true today thanks to the rise of technology and software solutions to help streamline the process.

Here’s a little more about the types of risks involved in construction and the steps you can take to manage and reduce risk across your own sites.

Common construction risks

  • Safety—sprained ankles, tweaked lower backs, broken bones, job site falls and other injuries associated with job sites.
  • Financial—With 80% of large construction projects going over budget, it’s an inevitable occurrence that contractors run into financial troubles from stakeholders, vendors and more. These hurdles can stagnate progress on sites, or halt them entirely.
  • Contractual—These risks usually fall on the shoulders of subcontractors. Occasionally, there may be legalese or wordy verbiage hidden in a contract that places a penalty or full responsibility for any errors on subcontractors, making it an especially sinister risk to look out for.
  • Natural disasters—blizzards, flooding, tornadoes, hurricanes, etc. that can impede progress on construction projects.

1. Be proactive and know what’s in your control.

First and foremost, it’s important to know what’s in your control and what isn’t when it comes to risk management. While you may not have control over certain events, creating a step-by-step protocol for when these occurrences do happen can help mitigate further damage.

For example, while flooding that pumps the brakes on your project certainly is out of your control, having a preparation and recuperation plan put in place that your workers and stakeholders are familiar with can help make the situation smoother. You can also have items in your contract listing out what actions need to be taken in case of such a natural disaster. Being proactive will protect your company’s pocketbook and project deadlines—so set aside the time to get it done.

While you may not have control over certain events, creating a step-by-step protocol for when these occurrences do happen can help mitigate further damage.

2. Mitigate risk through contracts.

Making sure your contracts are airtight is absolutely essential to minimizing risk. Keep Murphy’s Law in mind when drafting your contracts and prepare for the worst. Without clear protocols laid out when it comes to reimbursable expenses, variation claims, indemnity provisions and more, you’ll put your company’s financial livelihood at risk. Fault for all incidents that occur could come down on your head, so be sure to consult with an experienced legal team when drafting your contracts.

3. Host toolbox talks.

An easy and effective way to decrease accidents across your job sites is regularly hosting toolbox talks. A toolbox talk is an informal meeting focused on topics related to safety, such as job site hazards and safe work practices, tailored to the specific job a crew is working on. During these meetings, both workers and supervisors get to share tips, status updates, and insights to help crews safely navigate the project they’re working on.

Toolbox talks create a company culture that puts safety first at your organization in addition to cultivating a sense of camaraderie among crew members. And because these talks are based on the specifics of the project at hand, they can significantly decrease the likelihood of workplace injuries and hefty legal fees.

4. Stay fully compliant.

One surefire way to regulate financial risk is staying fully compliant, which in turn will lower the chances of a potential lawsuit or fines. Luckily, much of the confusion of compliance can now be wiped away with the help of workforce management software like ours here at ExakTime.

ExakTime’s accurate and detailed time and attendance records for your mobile workforces are stored in our airtight cloud, so you’ll always have proof of what they really worked, and payroll will be seamless for all your Davis-Bacon and standard projects.

Plus, with our mobile app, you can keep your legal bases covered by having employees sign off on forms directly from their smartphones to confirm they haven’t been injured during work that day.

5. Keep detailed records of all job site activities.

Reducing risk gets a whole lot easier when you have data to back up your claims. Whether you’re answering stakeholder’s questions about fast-approaching project deadlines or examining which projects are cutting into your profit margins, having detailed labor records can help you out. For instance, ExakTime’s time tracking software keeps tabs on hours worked by job site and even cost code, plus equipment usage and more—enabling you to pinpoint exactly what processes need to be changed to sharpen your margins.

Before partnering with a vendor, conduct research online to see what customers have to say about them.

6. Use trusted tools and vendors.

From smart geotrackers to project management software, there are more tools at your disposal to help with risk management today than ever before. While this makes life in construction much easier, it also makes it difficult to decide which option to choose. Before selecting a software tool, you should consult review platforms like SoftwareAdvice, Capterra, the iTunes App Store and TrustPilot to see what past and current users think about the app.

Before partnering with a vendor, conduct research online to see what customers have to say about them. You can look through their case studies on their website, or choose vendors based on referrals from friends when possible. Doing your due diligence before siding with a solution will help lower the risk that something goes awry while doing business with them, so be as thorough as you can.