Fourth Industrial Revolution

In the Phoenix Business Journal December 20-26, 2024 issue, there was an article summarizing a panel discussion with several companies deeply involved in Construction. In this case, it was specific to the Arizona market, but many of these comments and considerations are appropriate for all those in construction across the country.

There was an interesting comment about the ‘fourth Industrial Revolution’ and how it is transforming construction through the integration of more advanced technology and the adoption of sustainability practices.

With continued tight labor markets, companies have been very focused on developing and training their work force. This includes field training, but also helping assess staff interest in future growth with the company. The goal is to bring the younger generation to the construction workforce, but also to help them grow and stay in the industry. Having and sharing a growth plan, communicating what that looks like, and setting reasonable timelines has been very important. When this has been communicated, coaching and regular check-ins are important. No one wants to over-state expectations then find that the employee is not ready for the new role and may fail.

As for the office, several of the firms said they have some amount of flexible work opportunities from home. More often, they’re being flexible with start and stop times to accommodate traffic, kids’ school drop offs, and other work-life balance issues. In-person collaboration remains very important, keeping the projects productive. Having some remote options seems to have been well received by the companies represented in this panel.

Back to the technology comments: there were references to technology tools like BIM modeling (we held a webinar on this several months ago) to address efficiency and collaboration. Taking advantage of integrated accounting software for project management, banking, fleet management, and credit cards for expenses, are all tools to bring efficiency and accuracy, saving time at several levels. This includes the field as well as data collection and reconciliation for the office and management.

There were some interesting comments about AI (Artificial Intelligence), as well. The Visual Designers have been using AI for quite a while, but as an industry, construction has been a slow adopter of AI. Simple tools such as Copilot to review long contracts, record and summarize meetings, and draft communication updates are some easy ways to get others engaged with these tools. It’s not only about encouraging their use; your clients will have higher expectations regarding what is provided, in what detail, and how quickly. To meet these expectations, we’ll have to use these tools!

There was a section about the R&D tax changes in the last few years. The tax treatment changes have been very unfortunate, greatly impacting when expenses can be realized and what taxes are due on income in the meantime. Many professionals really thought this would have been resolved by now. Add in the bonus depreciation that’s going away while interest rates are high, and it’s had a huge impact to growth and planning.

Another hot topic for this panel was succession planning, and they had a few nuances I hadn’t heard before. There’s the typical succession planning, who will step into which roles, but also what was termed ‘emergency succession planning.’ If a key person won the lottery or retired tomorrow, what would the ripple effect be in the company? Who would step in and where? What gaps would appear and how would they be addressed? Even in the succession conversation, systems, software, and technology are big components as we consider new ways to work and get things done.

Nurturing younger generation workers within the construction industry, now and for their career; leveraging technology for efficiency and accuracy; incorporating software solutions that integrate for the field and office functions; planning for succession in the short and long term; all of these are part of the strategic growth ingredients for the construction industry and your company’s growth.

Nothing here is a ‘one and done’ item. These take time, planning, discussion, discovery, and an investment of time and money. We would welcome the chance to walk with you on this journey! – CMW