Construction Risk Management in 2021: Industry Trends and Challenges

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An undeniable fact: construction has always been risky. You know the reasons: poor records of completion; high levels of litigation; waves of time-sensitive RFIs; tough competition; increased pressure to save time and money; new health and safety hazards and regulations; and the list goes on. Risk management is a fundamental part of any project management; we all know the right procedure: identify risks by reviewing documentation and specifications and rely on previous experience; prioritize, trying to quantify the impact of a particular risk; and finally, manage – decide whether you’re going to avoid, reduce, transfer, or accept the risk and design an action plan. But with the changing industry and new challenges, novel risks arise frequently. What to expect in construction risk management in 2021 and how to prepare yourself – learn more in this blog.

Pandemic risks are still here.

As the global community keeps fighting outbreaks and new variants of the virus, we cannot write the pandemic off as a continuing operational risk. COVID safety practices encouraging people to stay at home if they were exposed or are subject to quarantines due to mild symptoms mean that the ongoing shortage of skilled labour will keep increasing. At the same time, “on-the-job exposure claims” alleging that employers allow unsafe working conditions during the pandemic are likely to become more frequent. To reduce these risks, rely on comprehensive guidelines on COVID safety measures for construction workers and prioritize keeping good communication with employees (check out this blog to learn more about the effects of good communication and other project management tips).

Another thing to keep in mind is that the supply chains will continue to be haunted by the pandemic, impacting both schedules and budgets. Remember that currently supply chain resilience is more important than ever.

Is there a vaccine for boosting financial health?

Although construction and its workers were considered essential and could continue working, shutdowns slowing and freezing the economy, together with supply chain disruptions, jeopardized schedules and operations. As a result, the industry is now working with exhausted balance sheets and tight profit margins.

Continuing financial pressures demonstrate the importance for general contractors and project managers to show how quality and safety are measured and managed on the job site. The reason? Quality is now growing into an essential insurance risk selection factor.

While you can’t control material availability and whether your workers might catch the virus while grocery shopping or from their families, you can control the insurance. Apart from fully understanding your policies, one of the best practices is reviewing them regularly and analyzing costs to ensure adequate coverage while mitigating the risks of being over-billed.

Technology solutions: do the benefits outweigh cyber risks?

We are witnessing how tech innovation and digital solutions help in streamlining construction processes and project management. Among other benefits, we see a positive impact on productivity, quality, and safety. Some analysts expect the industry to undergo fundamental technology-related changes over the next three to five years.

However, for many people, digital tools are strongly associated with high cybersecurity risks, and this is often the reason why they choose not to rely on technology solutions. Numerous Multivista clients share their concerns about someone else getting access to their sensitive data. In response, we can assure them that the system we use for storing and handling 360 Photo projects meets all major security requirements and can protect the uploaded data.

With 360 Photo, you can also prove that job site conditions meet health and safety requirements, and the project follows quality standards and guidelines. Reach out today or view this Brochure to learn about other ways to make construction risk management an easy task by leveraging photo documentation.