According to a survey, the AEC (Architecture, engineering, and construction) market is projected to reach $15.8 billion by 2028.
The exponential growth of the AEC industry can be attributed to urbanization, housing demand for the growing population, technological advancements, infrastructure investment, etc. However, this sector faces several resourcing challenges like rising labor costs, skill gaps, high attrition, inefficient processes, etc.
The inability to address these bottlenecks can lead to project failures and affect the firm’s financial health. Therefore, AEC firms must implement resource management strategies to enhance workforce productivity, successfully deliver projects, and maintain profitability.
In this blog, let’s explore the effective methods to overcome resourcing challenges within the construction industry and how SAVIOM’s ERM tool can help.
2. What are the major resourcing challenges in the AEC industry?
The AEC industry requires various resources, like architects, engineers, and construction workers, to successfully deliver projects. However, procuring and maintaining a skilled talent pool is a significant challenge for the AEC firms due to the ongoing retirement of senior professionals from the workforce and the lack of interest among new-generation employees to join this sector.
In addition, the industry is experiencing a rapid proliferation of technological advancements which have widened the existing skill gaps. Furthermore, the use of outdated tools and spreadsheets can make it challenging for AEC firms to identify and schedule competent resources appropriately, resulting in double bookings and internal conflicts. Additionally, a lack of foresight into pipeline project demand can lead to last-minute firefighting for competent resources.
Besides, the absence of real-time data on resources makes it difficult to monitor workforce utilization and prevent under/overloading effectively. Lastly, due to the lack of visibility, managers cannot anticipate and manage the ramp-up/ramp-down of construction professionals, leading to a resource shortage or an increase in the bench size.
Now, let’s discuss the solutions to address these challenges.
3. 7 best strategies to overcome resourcing challenges in AEC firms
Listed below are some industry best practices that help these firms manage the workforce effectively:
3.1 Develop a centralized platform for all AEC resources
The use of legacy tools in the construction industry leads to information silos. This makes it difficult to compile the data, leading to delayed decision-making. Besides, a lack of visibility into the construction resources’ present and future bookings can lead to scheduling conflicts.
Therefore, firms must implement a centralized database that provides real-time information on the professionals’ attributes. This will help managers schedule and allocate the right resources to projects, thereby eliminating data duplication and multiple bookings.
3.2 Foresee & bridge demand gaps for pipeline AEC projects
When construction managers have foresight into pipeline project demand, they can identify the excess/shortage of skills and accordingly take remedial measures. For instance, a pipeline project requires four civil engineers and two architects. However, the firm has one civil engineer and four architects.
For the shortage of three engineers, managers can facilitate training for existing resources, implement out-rotation and backfill strategy, or initiate planned hiring. Contrarily, for an excess of two architects, they can bring forward the future project timelines or sell the extra resources at discounted rates. This will prevent last-minute firefighting and minimize capacity wastage.
3.3 Assign competent resources to construction projects
Since AEC projects are skill-intensive, managers must have real-time visibility into the resources’ attributes, like skills, competencies, experience, cost rate, etc., to identify and assign competent resources. Moreover, it prevents allocating over and under-skilled construction resources to tasks.
For instance, an underqualified architect deployed to critical tasks can experience stress and burnout, leading to sub-par quality. Conversely, assigning a highly experienced engineer to low-priority work can lower their morale, resulting in disengagement. Thus, allocating best-fit resources can help construction firms deliver projects on time and within the budget.
3.4 Improve productive utilization of AEC professionals
When managers lack real-time insights into the utilization levels, they cannot effectively track and optimize the construction professionals. This results in under or overutilization of resources, causing stress, burnout, disengagement, etc. It will eventually jeopardize the quality of deliverables, leading to schedule and budget overruns.
Therefore, visibility into the workforce pool can help managers efficiently monitor the construction workers who are overloaded with work and accordingly take measures like resource smoothing and leveling to optimize their workload. Moreover, managers can proactively identify the resources working on non-billable work and mobilize them to billable or strategic projects. This will improve billability and productivity.
3.5 Leverage contingent & permanent AEC resources as appropriate
Due to external factors and ever-evolving client requirements, the AEC projects are prone to scope changes and volatile resource demand. Therefore, it is essential for managers to maintain a blended workforce of permanent and contingent workers. It will help them cater to scope changes and meet the client’s expectations.
For instance, the initial specifications for a new two-story office were to build ten rooms and an underground parking area. Midway through the project, the client requested modifications like adding a large cafeteria and lounge. Based on the requirements, the firm can hire contractors for the change request, reducing the workload of permanent resources. This will ensure the timely delivery of projects within budget.
3.6 Manage ramp-up & ramp-down of AEC resources
Construction projects are prone to frequent ramp-up and ramp-down activities. However, due to improper forecasting and lack of visibility into the project lifecycle, several resources end up on the bench without sufficient work. To efficiently manage the bench size, managers must have foresight into upcoming ramp-down activities.
This will allow them to ascertain any project vacancies and assign the released employees quickly. Likewise, when there is a sudden ramp-up of resources, managers will have enough lead time to fulfill the requirement and ensure seamless project workflow. This way, the AEC firms can improve resource billability and profit margins.
3.7 Implement training and development programs for AEC professionals
According to a survey, 80% of construction firms face skill shortages.
The AEC sector encounters skill gaps due to factors such as rapid technological advancements, global competition, etc. Therefore, employees must stay abreast of the latest skills. So, managers can facilitate L&D initiatives such as on-the-job training, shadowing opportunities, seminars, workshops, etc.
Moreover, they can identify competent AEC professionals and upskill them to fill critical or leadership positions as part of the succession planning. This will enable organizations to futureproof the workforce and take up new opportunities.
Now that we know the solutions, let’s understand the benefits of a resource management tool.
4. How does the modern ERM tool help AEC firms address resourcing challenges?
Implementing a robust tool like Saviom enables AEC firms to manage their resources effectively.
The tool’s 360-degree visibility and advanced filters enable firms to identify and allocate professionals based on their skills, availability, cost, location, etc. Further, the competency matrix helps identify the skillsets of resources in real-time and facilitates training for appropriate AEC resources.
Moreover, forecasting and capacity planning provide foresight into future project demand and identify the capacity vs. demand gaps. Accordingly, managers can take measures to bridge the gaps.
Furthermore, real-time reports like forecast vs actuals, utilization, and color-coded heatmaps help optimize resource usage with corrective measures in case of deviations. In addition, people-on-the-bench and project vacancy reports enable managers to identify benched employees and proactively assign them to suitable projects. This way, an ideal ERM tool can help AEC firms deliver projects successfully.
5. Final thoughts
The workforce serves as the critical success lever in the AEC sector. Therefore, it is essential for these firms to effectively utilize their professionals, which can significantly contribute to successful project delivery and client satisfaction. Following the above best practices and implementing next-gen ERM software can address resourcing challenges and improve profitability.