Industry Game-Changers

Typically, disruption in the workplace is counterintuitive to productivity. But in terms of creating innovative ways to manage people, processes and technology, the concept of “disruption” isn’t such a bad thing for the construction industry. Change is stirring whether contractors are ready for it or not, and firms that have adopted new ways of managing scheduling and workflows are seeing stellar results—earning the accolades of repeat projects for key clients, as well as happy project partners.

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Best Practices

Background Screening: A Cost/Benefit Comparison

During the past decade, background screening has become a necessary way for companies to minimize liability, protect consumers and safeguard their brand. For construction management firms, the use of subcontractors and other contracted workers presents a special challenge. Even though they aren’t direct employees, contracted individuals can become the “public face” of a construction management company.

Recent litigation shows construction managers ultimately are liable for individuals performing work on commercial, industrial and residential projects, regardless of their employer. This potential for liability puts additional pressure on construction management companies to ensure workers are fully screened and adequately insured prior to being sent out into the field. If contractors or their subcontractors fail to provide adequate workers’ compensation coverage, the prime contractor is subject to penalties in the event of an audit. Without liability insurance, the contractor may be liable if a worker is injured on the job. Continue »

Adapting to a Cogenerational Workplace

Construction Executive's Managing Your Business eNewletter

A major generational collision is occurring in the workplace. Millennials, reared with technology at their fingertips, are seeking jobs and often out-competing their baby boomer predecessors who want to stay in the workforce. This collision can be frustrating, alienating and divisive; to adapt, organizations must celebrate diversity, collaboration, creativity and productivity. Continue »

Contracts

Reading Between the Lines for Contract Risk

Risk is an inherent element of construction. Weather, changing project locations and local workforce challenges all add risk beyond what’s typically experienced in a more controlled manufacturing environment. These risks may be present before an estimator even looks at the drawings—in the language of contracts written by owners seeking to reduce their own liability. Some of these risks are very difficult, if not impossible, to control. Continue »

Accounting

Budget: An Overlooked Tool That Can Boost Profitability

In today’s business environment, construction companies face the challenge of matching productive resources with market opportunities. Vital to resource management and the success of a business plan is a well-designed, flexible budget. When developed properly, a budget can be an effective guide in good and bad economic times. Highly intuitive, integrated software solutions can make financial planning and budgeting less of a task and ultimately more beneficial to a project’s profitability. Continue »

Finance

Pent-Up Demand Builds in Education Market

During the worst phase of the downturn in nonresidential construction activity, many contractors shifted their priorities from the private market to institutional jobs, including schools and higher education-related projects. While private construction volumes shrank rapidly during the aftermath of the financial crisis that began in September 2008, school construction volumes persisted for a while due to the relative stability of public sector capital budgets, which were boosted in part by the 2009 American Recovery and Reinvestment Act. A rich pipeline of projects also was in place prior to the onset of the recession. Continue »

Healthcare

Prepare Now for a Taxing 2013

This year is just getting started and the writing already may be on the wall for taxes in 2013. Careful planning and properly timed action could significantly impact taxes paid in 2012, 2013 and beyond. With the current political environment and recent legislative action (or inaction), experts predict personal income and capital gains tax rates are likely to rise in 2013. Higher taxes on ordinary dividends and the estate/gift tax also may be imposed in 2013—not to mention a higher Medicare payroll tax and surtax on high-income earners. Continue »

Accounting

Tax Implications of the New Repair Regulations: Change in Accounting Method May Be Required

Construction Executive's Managing Your Business eNewsletter

In December 2011, the Treasury Department issued temporary and proposed regulations—commonly referred to as the “repair regulations”—that provide guidance on the tax treatment of costs incurred by acquiring, repairing or improving tangible property. Tangible property includes building components, machinery, equipment, furniture, fixtures and land.

The temporary regulations adopt many of the standards included in the 2006 and 2008 proposed regulations; however, they also include significant changes that will affect most taxpayers. Companies should determine the extent to which they will be required to change their current accounting methods to conform to the new regulations. Even if an accounting change is not necessary, companies should analyze whether adopting the new standards will be more advantageous than their current methods. Continue »

The Role of Hotlines in Ethics Programs

Ethics programs have been praised for their positive effect on the engineering and construction industry, shoring up the reputation of firms and bringing stricter oversight and regulation of work practices. But all ethics programs are not equal. For firms dedicated to promoting lasting cultural change, reporting rates will be higher and incidences of ethical violations will be lower. Conversely, it is possible to implement the façade of an ethics program, yet harbor a dishonest and retaliatory culture that discourages reporting. In this case, the last line of defense is an anonymous hotline. Continue »

Best Practices

Managing Workforce Demands with Prefabrication

The claim of labor shortages in construction has a tendency to fall on deaf ears. After all, since peak industry employment was achieved in April 2006, the number of construction jobs has declined by 2.2 million, or 28.6 percent. Specialty trade contractors shouldered a disproportionate share of the loss, with the segment shedding nearly 1.5 million jobs (30 percent) since August 2006. As of March 2013, U.S. construction industry unemployment stood at 14.7 percent.

But labor shortages are on the way due to a combination of retirement demographics, the challenge of attracting younger workers and the anticipated rapid growth of certain key segments. A 2012 McGraw-Hill survey revealed 60 percent of respondents—particularly architectural and engineering firms—are concerned about the loss of knowledge associated with retiring baby boomers. Continue »

Best Practices

Complying with Revised ADA Standards for Accessibility

The U.S. Department of Justice adopted the 2010 Americans with Disabilities Act (ADA) Standards for Accessible Design on Sept. 15, 2010. During an initial transition period, covered public and private entities starting new construction or performing alterations had the option of following either the old 1991 Standards for Accessible Design or the new 2010 Standards. But as of March 15, 2012, all construction projects and modifications must comply with the 2010 standards. Continue »

Regulatory

NLRB Bans Blanket Confidentiality in Workplace Investigations

In a recent decision, the National Labor Relations Board (NLRB) banned blanket confidentiality policies as they relate to employer investigations of workplace violations, such as sexual harassment and safety concerns. The NLRB determined that policies requiring confidentiality among employees during an investigation violate Section 7 of the National Labor Relations Act (NLRA) affecting “concerted activities.” Under Section 7, employers in both union and nonunion private sector environments are not permitted to interfere with or restrain employees from engaging in concerted activities which, by definition, are two or more employees acting together in furtherance of matters of mutual interest, such as compensation, benefits or workplace conditions. This decision could have a chilling effect on employers and employees across many industries, including construction. Continue »

Outlook

What’s in Store for 2013?

Under normal circumstances, construction businesses could be justifiably optimistic about the future of the industry. After all, various leading indicators have been trending higher, including the Architecture Billings Index (ABI), which exceeded the key 50 level for five consecutive months before dipping two points in April (48.4) and another three points (45.8) in May. The ABI successfully predicted a dip in construction spending between the fourth quarter of 2011 and the second quarter of 2012. Although the period of decline may be ending, the May reading suggests vigorous recovery remains improbable. Continue »

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