COVID-19: the great disruptor

17 April 2020

Andres Reith, National Leader, Real Estate & Construction
Partner, Business Services

In all the ‘bad news’ stories of COVID-19, lies some optimism within the Australian Construction industry – who, in adversity are finding new ways of doing things.

It’s 2020, and we are living in an uncertain future. Our fast-moving economy is at an almost complete shutdown in a bid to contain a pandemic sweeping the globe, and there’s a necessity to adapt to changes daily – no, this isn’t the opening paragraph to a sci-fi novel, but the reality of the extraordinary environment we are living right now.

For the Australian construction industry, the current climate is marred, not only by the inherent economic concerns of corporate collapse due to the Coronavirus, but also health concerns, as sites continue to operate as essential services.

Within a matter of weeks, the construction industry, which is already a high-risk and tightly governed sector, has seen an increased tightening of government policy - starting with the ban of public gatherings and followed by strict restrictions on physical distancing.

This in turn has brought a need to rapidly implement strategies and education in social distancing and stringent hygiene practices. It has also created some anxiety in the workforce, emphasising the need to refocus on mental health and wellbeing, as health fears climb.

On top of this, the micro and macroeconomic pressures have seen supply chains, project timelines and workforce planning all thrown into disarray. As operators find alternative ways to plan workforces, due to unforeseen absences from self-isolation and restrictions on who can enter work sites.

"For construction, COVID-19 has become the great disruptor."

So, how is the construction industry responding?

Ironically, the term ‘disruption’ has been part of the business world rhetoric for almost a decade - particularly around technology being the biggest disruptor of our time. It’s a term which became so ubiquitous and overused, that for many industries – particularly those who were built on solid historical foundations - was nothing more than white noise.

Yet, the force and speed at which this virus has spread, has meant that changing workforces, the uptake of technology and shifting work practices are now being implemented by the construction sector, resulting in greater efficiencies and happier workforces.

It was refreshing to talk to several Australian large constructors as part of the BDO Construction Survey 2020. These operators see COVID-19 as a game changer. When faced with the ‘adapt or die’ scenario, the construction industry overall, is taking it in their stride. Those who I interviewed state, that now is time to make significant changes to work practices, technology and to rethink their office spaces.

It is though construction operators are using the environment as a trigger to reinvigorate their business and question long held business methodologies, to move to a new level of operating. We are seeing companies in the construction industry making the most of the restrictions set by government policy and social distancing.

If you put this into the historical context, it’s even more remarkable. The Australian construction industry is one of the oldest industries (the ‘national voice’ of the building and construction industry, Master Builders was formed before Australia’s federation). Therefore, it’s fair to say that a number of work practices have been engrained.

Historically, the construction sector has been held hostage by traditional work practices with high expectations on key people. Site managers ‘need’ to be on the ground, they ‘must’ hold face to face meetings, and in practice they spend too much time on the job and do not enjoy healthy work/life balance - putting strains on family relations, personal physical wellbeing and mental health.

So, how is this changing?

My findings show that there are three key areas where construction owners and operators are improving: technology, workforce planning and physical office spaces.

1. Technology

Construction operators are using technology to create efficiencies, namely through:

  • Allowing remote access to get work done
  • Past beliefs about site mangers on-site requirements are being let go. They are overcoming unnecessary contact by allowing site managers to be virtually present in several places that are geographically separated.

2. Workforce planning

Construction operators are telling me they are seeing the benefits within their organisations including increased productivity and innovation, due to simple measures in workforce planning. Most notably the use of A and B teams and flexible working.

Overall, the biggest changes that are being felt on the once time-poor construction industry, is flexible working. Other initiatives that were previously ‘too hard’ to change, are now effectively being forced into, and widely adopted and accepted.

For example:

  • There’s more efficient workforce planning taking place
  • Remote supervising methods are in place
  • Staff teams are rotating – brought about by splitting teams into A and B teams for Covid-19
  • The implementation of A and B teams, means there is an ‘off’ time, having a positive impact on mental health due to work no longer being 24/7
  • Work life balances are being achieved through people working from home (WFH). They are cutting travel times and increasingly working at times that suit them. Plus, it’s no longer frowned upon, but widely accepted by the community to be more flexible
  • Increased productivity as workers are practising social distancing.

3. Physical office space

Adjusting workforces from office buildings have had positive outcomes:

  • Companies are rethinking the requirement to have significant office space - with board room, corner office and adequate workstations for all staff, plus some more for travelling occasional staff
  • Travel costs are expected to reduce as more meetings happen virtually
  • WFH arrangements reduce requirement to have office space for deskbound workforce

These changes, while seemingly all simple measures are making great differences – and they are all changes that could have occurred in a normal context. Yet, it wasn’t until the pressure and impetus of the virus crisis (the disruption) that these companies were actually forced to create change – and create change for the better.

This is just the tip of the iceberg when it comes to the changes and challenges that will be overcome for years to come off the back of the Coronavirus. Lots of learnings will come and mistakes will be made – but overall, we will see a real shift in business model paradigms and new ways of work across the sector.

It seems that technology wasn’t the great disruptor of our time after all, but, has indeed changed the way were able to respond to the real ‘great disruptor’. For business owners everywhere, this pandemic has demonstrated disruption in its most pure form - forcing innovation to flourish everywhere we look.

Access the BDO Construction Survey 2020

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