The labor productivity growth that the construction industry has experienced in the last two decades has been dwarfed by the productivity growth experienced by the manufacturing sector and overall US productivity growth. Here are some of the biggest factors that have contributed to this disparity.
Why construction has lagged behind other industries in digital transformation efforts
An aging workforce is resistant to learning multiple new tools to conduct daily activities
The construction workforce has been shrinking for years, and the industry has struggled to attract younger workers. As a result, the average age of a construction worker remains high. This means that the workforce is naturally more resistant to disruptions to established workflows.
Construction workers have used spreadsheets and physical paper to collect and share information for decades and would need to adapt to entirely new methods of working should companies digitally transform.
Disparate operational departments have differing requirements from newly introduced solutions
Construction projects bring together multiple operational departments. Between finance teams, HR teams, on-site staff, contractors, subcontractors, suppliers, and more, each team or stakeholder needs something unique from new technology investments. Companies can be reluctant to invest in multiple expensive platforms and solutions for each operational department.
However, the development of multi-purpose solutions such as CRM systems can help business leaders overcome this challenge. Modern CRM solutions allow construction businesses to consolidate operations using specialized modules that still operate within one unified platform. Effective CRM solutions can also integrate with existing software that construction teams might have already adopted.
Outdated technology is still in use despite the availability of modern alternatives
The technology space has evolved significantly in the past few years. As more construction companies become willing to adopt software and hardware solutions, more vendors have developed tools specifically for the industry. Despite this increase in solution availability, construction businesses still rely on outdated technology for some key workflows. This is true even for companies that have adopted software to a limited extent.
According to research from JB Knowledge, estimating, accounting, and project management are the workflows that are most likely to still be done using spreadsheets. This is the result of technology existing in specific silos and being used only for specific functions, thereby forcing collaborative tasks to be done on outdated systems.
Why construction businesses must embrace digital solutions in 2022
1. The construction sector needs to augment an increasingly stretched workforce
As productivity stagnates in the construction industry, business leaders must find ways to improve operational efficiency beyond hiring more people. These solutions can come in hardware and software forms. Hardware solutions such as exoskeletons and augmented reality headsets can help reduce the load that workers have to carry at the project site while software solutions can help close the gap between office and on-site workers.
This can help information flow seamlessly between operational departments and ensures that the entire construction team has all the information they need to work efficiently and effectively.
2. Adopting technology now can give construction companies a competitive advantage over digital laggards
Technology can help companies raise productivity, increase profitability, and improve communication and scheduling between operational teams. In some industries, the competitive advantage that can be gained from adopting technology has been lost since technology adoption has reached the point of saturation. However, the construction industry has yet to reach that point.
Companies that adopt technology before their competitors have the opportunity to fine-tune processes, build complex solution stacks, and optimize workflows to make the most of their new systems. This gives early adopters the advantage of learning how to maximize the utility of software solutions that are growing in popularity ahead of the laggards.
3. Technology can help the construction sector attract and retain top talent
The construction talent crunch will likely take years of coordinated effort from businesses to overcome. However, there is one way to immediately make the industry more appealing to young workers. Millennial and Generation Z workers are digital natives, which means they grew up with technology and expect to have the appropriate tools at their disposal when they work.
The absence of modern solutions can make an industry utterly unappealing. Digital solutions that improve processes in construction can also help make the sector more attractive to young workers who are also more likely to stay at companies where they feel comfortable and supported.
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How integration helps businesses overcome barriers to digitization
The benefits that various digital solutions can deliver to construction companies are virtually endless. However, this does not mean that technology alone can deliver the best solutions for businesses. A larger technology stack does not guarantee greater productivity, profitability, or operational efficiency—each piece of the puzzle must fit into a larger plan.
Business leaders must understand how different pieces of technology interact with each other and learn how they can work together to produce the best results. Business leaders can do this through integration. Once every solution feeds information into a single platform and simplifies tasks for construction teams, business leaders can rest assured that they are making the most out of their technology investments.
Ultimately, there has never been a better time for construction companies to embrace new software and hardware solutions to improve business operations. The systems that make a difference have been proven to work and have a strong history of delivering results in the construction industry. At the same time, the slow adoption of technological solutions in the sector presents an opportunity for industry players to take the lead in deploying and reaping the benefits of modern technology early.
