Every year, the Associated General Contractors of America (AGC), in partnership with Sage, surveys contractors from across the US to uncover industry trends. Results from the 2020 Construction Hiring and Business Outlook survey found that construction companies are anticipating a strong demand for their services this year and are using technology to enhance productivity. Here is an overview of the key technology takeaways from the survey.
Staffing is still a challenge
Nearly three of out four construction firms plan to increase their head count in 2020. However, 81 percent of the nearly 1,000 firms surveyed also reported having a hard time filling salaried and hourly craft positions. In addition, 43 percent of firms expect that in the next 12 months it will continue to be hard to hire and 22 percent expect that it will become harder to hire.
“Contractors are very optimistic about demand for construction in 2020,” said Stephen E. Sandherr, chief executive officer of AGC. “At the same time, many construction executives are troubled by labor shortages and the impacts those shortages are having on operations, training and safety programs, and bottom lines.”
This isn’t a new problem. The qualified worker shortage has been weighing on contractors’ minds for the past several years. This year’s survey results reinforce that it’s affecting more than just a firm’s ability to fill open positions. Not having enough qualified workers affects how firms operate and their ability to meet deadlines, often resulting in projects that take longer and cost more in the process. At the same time, projects are becoming more complex. As less experienced workers take on increasingly more complex projects, it increases the firm’s risk. We’re going to continue to see firms turning to technology to help bridge the gap.
Strategic approach to IT
Technology can be strategically applied to increase productivity of current staff. Thirty-two percent of firms have adopted or increased use of labor-saving equipment such as drones, robots, 3-D printers, or laser/GPS guided equipment. Firms are becoming more strategic about IT as they try to remain competitive in today’s environment. According to this year’s Outlook survey, 48 percent of contractors indicate they currently have a formal IT plan that supports business objectives while an additional 10 percent of contractors plan to create a formal IT plan in 2020.
Outsourcing is one sign that contractors are taking a more strategic approach to IT. According to the survey, 84 percent of respondents outsource either IT or a business function, down from 91 percent last year. While the percentage of respondents currently outsourcing went down, outsourcing for specific functions went up. Forty-five percent outsource backup and disaster recovery, up from 26 percent last year. Thirty-six percent outsource voice over IP (phone service over the internet), up from 27 percent last year. And 35 percent outsource desktop (light maintenance), up from 19 percent last year.
Increase in technology spending
The results also show that contractors are spending more in order to fund their IT plans. Forty-two percent of respondents say they currently spend 1 percent or more of revenue on IT (keep in mind this number does not include those who indicated they were unsure of the percentage of revenue). In addition, 46 percent of contractors report they will increase IT investment in 2020, up from 42 percent last year. Most telling — only 2 percent of firms plan to decrease IT investment, while 44 percent expect their IT spending to stay the same as last year and 9 percent are unsure. The technology areas with the largest planned increased investment are project management software, document management software, fleet tracking/management software, and estimating software.
Collaboration is key
While we’re seeing the majority of firms using some type of technology to collaborate with project partners, the numbers decreased from last year. Seventy percent of respondents are using file sharing sites such as Dropbox or Box, down from 75 percent last year. This is likely due to purpose-built construction solutions addressing this need more effectively. Forty-seven percent use online project collaboration software designed to keep building teams in sync and improve a project’s financial and quality outcome. Only 15 percent are not using any project collaboration technology. We expect the adoption of cloud-based collaborative tools to increase as greater collaboration among teams helps reduce errors and improve efficiencies.
Construction is getting even better at collaboration. Building information modeling (BIM) is another collaboration tool used primarily by respondents for clash detection, constructability input into the design process, construction means and methods, and to visually communicate project scope to clients. Eighteen percent of respondents expect an increase in the number of projects that involve BIM in 2020 while 39 percent expect to have about the same number of BIM projects (+ or – 10%).
Embracing cloud technologies
Contractors are also advancing their use of cloud technologies. Forty-nine percent of respondents use cloud-hosted technology for project management, while 37 percent use cloud technology for some component of field operations and 31 percent use cloud technology for accounting. When it comes to cloud-based mobile solutions on the job site, the numbers are higher. Sixty-eight percent use mobile software for daily field reports, 61 percent use mobile technology for employee time tracking and approval, and 55 percent use mobile technologies for both field access to customer and job information, and for the sharing of drawings, photos, and documents.
Barriers to adopting new technology
Finally, the use of information technology is not without its challenges. Forty-three percent of contractors say it’s difficult to find the time to implement and train on new technology. Employee resistance to technology and communication between the field and office are the other top concerns as identified by 38 percent and 36 percent of respondents respectively. Connectivity to remote job sites was a close fourth with 35 percent of respondents identifying it as one of their biggest challenges. These were the top four issues identified last year as well. Contractors can help mitigate some of these concerns by setting priorities and implementing technology in stages.
Technology will continue to play an increasingly important role in the industry as firms look to innovative new technologies and techniques to help them be more productive with their current workforce and remain competitive in today’s climate.
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AGC 2020 Construction Hiring & Business Outlook
The AGC of America surveyed 1,000 contractors from across the country for their annual Construction Hiring and Business Outlook. Here are the key technology trends you need to know about.