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March 27th, 2020 | Published by NEW Construction AllianceIn the hopes of sharing key insights and best practices, The Build Out held a “virtual town hall" by interviewing some of our members to share key insights and best practices with all of our members about the impact of COVID-19 on the industry.
We spoke with John W. Schneider, president of Consolidated Construction Co., Inc.; Adam Tegelman, director of operations for Murphy Concrete & Construction (MCC); and Marcus Koehl, CPA, senior manager, audit for Wipfli.
One thread that ran through all the responses given to The Build Out was the need for open, clear communications during these trying times. MCC’s Tegelman stated, “the most important part is communication.”
When asked for his best advice to his industry peers, Schneider made a similar suggestion: “Keep your employees informed and safe. The safety and health of our employees are the lifeline to our future.”
Tegelman explained that in addition to planning and communicating, employees and companies must be flexible in these uncharted waters. “[we must operate] under the assumption that we must adapt continuously.”
Koehl, who specializes in the construction sector, believes that construction being deemed an “essential industry within the State of Wisconsin’s Safer at Home order,” should help mitigate some of the financial strain on the industry because “mass shutdowns of projects is not legally required.”
He continued, “there will be project owners who will elect to shutdown projects. While Wipfli can’t provide any legal advice, contractors should spend some time planning for the contingency of a project shutdown to have a plan in place for how sites are going to be secured and protecting the work that is already in place. Additionally, a plan should be adopted for how to document any additional costs incurred due to a shutdown.”
Schneider pointed out that while none of their projects have shut down completely, several “jobsites are still running but with many restrictions, which is slowing down production.” He added that “a number of projects are being delayed” pushing start dates back 2-4 months.
While construction has been deemed essential, other industry shutdowns and school closings have put a strain on our industry’s capabilities. “Our biggest challenge is having available workforce. We have given our employees an option to take a ‘voluntary layoff’ if they have to take care of kids or if they feel they are at high risk to catch the virus,” Tegelman observed.
Tegelman believes the coronavirus situation has only exacerbated an existing challenge, “Having enough available workforce has and is going to be a big issue as we navigate through this challenge.”
Koehl pointed out that another consequence of the shutdowns that’s affecting construction operations is travel. “Companies with employees traveling are being impacted, whether travel is local or national,” he said. “On jobs where employees may be flying back and forth to the job site, they are now required to drive instead of fly.”
Having a crisis communication and/or crisis response plan in place for these occasions has aided many of our members. Schneider said theirs “provided the structure for us to communicate with our employees accurately and timely” and Tegelman said that COVID-19 “was a good challenge to test [their plan.] It’s helped us realize the areas we need to work on. However, I was impressed with the resolve, planning and communication to our employees it provided in this tough time.”
Looking past the current emergency, many have wondered what the short- and long-term economic future will look like overall, but particularly for the construction industry.
Koehl thinks there is reason to think positive once we are past the current situation. “We are still living in a demand market. For the construction industry specifically, there will still be projects that will need to be completed. Certain changes needed for our health industry infrastructure can and are also creating new construction opportunities.”
The New Construction Alliance COVID-19 Resource page can be found here.