COVID-19 in the Construction Industry – Managing Distancing from a Work Perspective

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By Eric Johnson

As calls for distancing continue to increase in both social environments and working environments, social behaviors can adapt relatively quickly to increasing distance, but work environments can pose challenges. The cases of the latter can involve situations that require the presence of employees in a mandatory way and/or in a teamwork environment. In the case of construction, we look at several types of organizations in the construction industry and how the COVID-19 recommended social distancing will affect both the organization and the business.
Software-based firms have the best opportunities for employee remote work. Key drivers for these organizations would be the ability of software and programs to be engineered/serviced off-site at employee/sub-contractor homes and the scalability of those backbones that can increase bandwidth in areas of demand such as for hospital construction or respirator construction. Those firms with cloud arrangements are best positioned to meet these demands.

Engineering organizations with the ability to work remotely can take advantage of software-based tools to allow for a work-from-home setup that can mimic most workstations. Leaders in these organizations can work with their employees to set up a home office and provide the latitude to take equipment and inputs such as plans and other physical necessities to complete work. For those individuals who are in mandatory situations requiring their presence, leaders can work to reassure their families by setting up teleconferencing abilities for spouses to have a visual presence at work. Additionally, the ability of possibly reducing hours in office to mission critical work only can aid in being productive while limiting the time in virus transmissibility. Lastly, although this is a difficult time, increasing morale within the team is paramount to employee health and psychological safety. As projects are put on hold, identify those areas where future business may lead and work toward building competencies in those areas.

Construction organizations face greater challenges due to the onsite nature of the work and the fact that some projects are essential, e.g. hospital construction, etc. Prevention of the spread of COVID-19 is paramount, so construction firms will need to first isolate mission-critical work to meet any gathering requirements (e.g. 50 people or less) and then space single-worker activities to reduce close proximity. This will involve modification of the contracts and project plans but will pay off in potentially reduced employee illness and overall spread if done correctly. Employees will want to go above and beyond regarding PPE, requiring face masks and eyewear protection at all times, showing workers they are taking the threat seriously. Union support, where applicable, will be crucial to managing the worksite.

Social distancing will have its costs. Leaders will want to fully review all contracts – for those with stip-sum contracts, ensure that costs are managed with appropriate measure and look to possibly renegotiate. For those firms with cost-plus contracts, while there is less risk, discussions with the owner should take place to ensure any changes are clarified. Challenge points may arise from sub-contractors in poor financial situations that cannot provide services to the organization or key employees who fall sick from COVID-19. Additional risks can stem from decreases in revenue from clients who cannot pay, with increasing risks from those with shorter net terms (rising to those with longer net terms as the contraction progresses). Forecasting scenarios will be critical in these situations to reduce service interruptions to clients if they are still continuing operations and clear access to credit will serve as important bridges to revenue.