Nothing is worse than when a job comes to a screeching halt, whether for a few hours, a few days, or in the case of the pandemic, months at a time. In any case, work stoppages are extremely costly and sometimes unavoidable. When the world came to a sudden stop in 2020, many construction management teams were caught completely off guard. Contractors found themselves in an unprecedented situation as jobs were canceled, their workforce plummeted, and material costs skyrocketed.

For many, however, 2020 became a period of growth as the industry rebounded in 2021 creating new opportunities and allowing contractors to adapt to a new normal. Instead of allowing circumstances out of your control to dictate your bottom line, now is the time to prepare for future unexpected stoppages. A big-picture plan that accounts for your finances, assets, and labor management is key. Here are some tips to help construction management teams plan for the unexpected.

Keep your finances in check  

Financial stability is fundamental to coming out of work stoppages relatively unscathed. Financial security allows companies to absorb the costs of unplanned stoppages by giving them the flexibility to adjust assets and labor while keeping them ready for work resumption. A financially stable contractor can focus on the project at hand rather than worrying about requests for money to meet cash flow demands. It also makes getting approvals for project financing quicker and easier, as lenders look for stable contractors who present less risk. Getting your finances in line could look like this: 

• Keeping on top of your cash flow: Construction businesses often front much of a project’s costs before project completion. In the event of unexpected delays, a business may not have enough cash on hand to pay expenses, fund another project, or keep other projects moving. By keeping an eye on your cash flow, you can better predict your needs and flag problems before they arise.
•  Limiting discretionary spending and operating costs: When work stops, often the flow of revenue does as well, such as during the pandemic when operating costs continued to soar while revenue was hard to come by. That’s why it is important not to overspend on inventory, which can quickly cut into your cash on hand. Buying only what’s needed is an easy way to ensure a more balanced cash flow.
•  Considering a contract management system: The right software platform can simplify monitoring and managing your finances. With a contract management system (CMS), you have access to billing and invoicing, real-time metrics, and increased visibility into your cash flow. Some platforms can even automate and manage invoices to ensure timely payment.  
• Breaking up with unreliable customers: In an industry operating on thin profit margins, a slow-paying or unreliable customer can negatively affect many aspects of your business from billing and invoicing to client perceptions.
• Avoiding litigation: Having to take legal action to get paid or being sued for breach of contract is not only extremely costly but can keep current and upcoming projects delayed for long periods of time. Staying up to date on insurance, regulations, and contracts minimizes the risk of legal action down the road.
• Obtaining a business line of credit: Applying for a line of credit with a bank can offer you much-needed working capital in the case of unexpected work stoppages. This option can help take the burden off incoming cash flow, especially during volatile periods. 

Optimize operations with asset management

Asset management helps contractors track and monitor anything of value to the company. This can include time, equipment, or construction materials. By managing these assets, construction companies can run more efficiently and reduce costs.

Asset tracking is a great place to start. When you know what tools you have, where they are, and the condition they are in, you can quickly grasp your business’s operational costs and plan ahead for unexpected problems.

Tracking downtime as it happens is also an important preventative measure for keeping work stoppages at bay. By keeping a log of when and why stoppages occur, you are able to implement strategies and policies to reduce them. It also puts you in a better position for action when the unexpected occurs.

Staying on top of maintenance and repairs is also a big part of managing your assets. Old or inefficient equipment is often to blame for an unplanned work stoppage. With out-of-date equipment, not only is work slow going, but it can also be stopped completely if equipment happens to break down. Regular maintenance and equipment upgrades are vital to preventing unexpected downtime.

Take the time for workforce development

The effective management of your workforce is vital to your success. Happy and efficient labor not only helps you secure work, control costs, and meet deadlines but also is one of the keys to reducing downtime. Here are three areas to focus on:

1. Set the foundation for a strong organizational structure

A smooth and efficient organizational structure and workflow is the goal. Aim to put clear and effective processes in place to avoid costly delays and a loss of productivity. The clearer it is who is in charge of what and when, the more quickly you will be able to restart production after downtime.

2. Invest in workforce management software

Good workforce management software (WMS) can do wonders for the management of your team by streamlining communication between employees across multiple locations. WMS helps to track the progress of each job and ensure your employees are meeting deadlines. The right platform provides a single place to easily manage not only your labor but also your time, money, and materials.

3. Consider technology to boost productivity

Giving your employees the best tools for the job is an effective strategy for boosting productivity on a jobsite. New technology can eliminate repetitive manual tasks, make the jobsite safer, and free up time for what they do best.  

Planning ahead is the key

Construction companies — or any business threatened by work stoppages as an operational risk — should always have a plan in place to cover worst-case scenarios. Additionally, management teams should be aware of this plan so they can act accordingly in the case of an unexpected stoppage. Developing a plan to staff and operate as best as you can is essential for positioning your company to navigate whatever lies ahead.

Get the resources you need to stay a step ahead of work stoppages from our experienced team at Wintrust Construction, Engineering, and Architecture.