CONSTRUCTION CHALLENGES WITH TODAY?S LABOR WORKFORCE AND SUPPLY CHAIN
It’s safe to say that the current construction industry can best be described as “unpredictable.” This uncertainty is directly affecting current bank/credit union construction and remodeling planning and project execution.
“With today’s depleted labor force and consistent supply chain issues,” explains DEI’s Regional Vice President of the Midwest Bob Boehmer, “the effect on construction schedules and budgets has been a challenge for everyone in the industry.
In almost no other industry is the gap between available workers and opportunities more pronounced. And the labor shortage doesn’t just apply to the electrician wiring your building or the framer raising steel beams. Unfortunately, the labor shortage also impacts the supply chain and the manpower required to process raw materials and transport them. In the meantime, the ongoing issues with the supply chain are causing project delays, time-consuming logistical headaches, and price hikes.
A STREAMLINED PROCESS
Design/build is a true turnkey process where the project owner (bank/CU) contracts directly with a firm
for both design and construction services. Using this method shortens the time frame of the overall project because design and construction can occur simultaneously, providing the construction team ample time to vet qualified local subcontractors and secure needed materials with long lead times such as steel, aluminum, and electrical products and components like generators.
According to the Associated Builders and Contractors, “In 2023, the industry will need to bring in nearly 590,00 new workers on top of normal hiring to meet industry demand, and that’s presuming that construction spending slows next year.” Given this gap in manpower, the job of vetting qualified subcontractors should begin earlier than normal in the project because when done properly, this is a time-consuming task. For instance, it’s important to review a subcontractor’s history, references, employee roster and current projects, and pricing. Once the preferred subcontractors are fully vetted, a schedule based on projected permit completion is provided to make sure they can meet the detailed outline and schedule and to ensure their ability to acquire the necessary materials. Occurring at the same time, in the design/build process, construction documents are being reviewed by state and local authorities.
BE PROACTIVE
Material and labor shortages don’t become a problem overnight. The accumulated and combined strains
of pandemics, extreme weather conditions, and world events have exacerbated these problems, and the result is an even greater potential for substantial project delays, schedule and budget overruns, and inflation. Even though some of these issues are out of our control, being proactive can go a long way to avoiding major project setbacks.
Proactive, advanced planning is achieved by a team that communicates throughout all phases of a project, from initial design through construction. Construction software such as Procore gives clients and subcontractors access to daily construction photos and timelines, providing a constant source of project communication and updates. This source of information, along with on-site meetings, allows all team members to know well in advance when they need to be on site or have materials ready.
“The goal is to attempt to minimize the effects [of shortages] in the very early stages, “says Jamie Case, DEI’s EVP of Construction.
Given the recent Infrastructure Investment and Jobs Act (IIJA), qualified construction labor is at a premium, which makes advanced planning a must. Because the design/build firm controls all aspects of the project, the owner has a single point of contact, which allows for better communication and less mediation by the owner between the architect and general contractor.
Overall, the goal is for your next construction project are to partner with a firm that understands the importance of communication, planning, and the ability to anticipate labor and materials supplies. Communication and early action help keep the project on time, which helps keep the overall cost of construction down.
THE BENEFITS OF RENOVATING AN UNOCCUPIED BUILDING
With the increased costs in available real estate, renovating an existing building can make a lot of
financial “cents.” To increase the speed in which you are able to occupy a completely renovated space, it’s beneficial to leave it vacant during construction. Your employees and members will appreciate not having to navigate a construction site and deal with all the noise, dust, disruption, and safety concerns that go along with renovation occupancy. If finances allow, you might even consider moving the business temporarily to a mobile branch in the parking lot or relying only on the drive-thru of the building.
Sometimes, however, there is no choice but to move in if you’re dealing with an ending lease or replacing a closed branch. If you must occupy the building during renovation, prepare yourself for a phased construction plan that will eventually include closing your main lobby, increased project cost, and slower time to completion.
Part of this is due to the fact that the amount of space available for project materials will be limited. Rather than deliver materials needed for the entire project, you’ll be able to store only what’s needed for the current phase. This can lead to material delays further along the schedule or the substitution of material to replace an item that is no longer available.
Unfortunately, the same is true for labor. The original electrician, or other subcontractor, from phase one may no longer be available during phase three because the company needed him on another project between phases. Labor costs are also more expensive if workers are only allowed to work at night, trying to avoid disruption to business during the day.
Renovating an empty building reduces construction timelines, safety concerns, and overall cost. If possible, consider relocating during a construction renovation.