By Eleanor O'Connor – On
Although remote work in the construction sector does not allow on-site projects to progress due to the physical nature of the job, support staff such as architects, engineers, and administrative roles can take advantage of virtual conferencing as opposed to in-person meetings.
Note: We will continue to update this article regularly.
Table of Contents
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Impact of the Coronavirus So Far
PSMJ Resources, an AEC advisory services firm, reported that for the second quarter of 2020 proposal activity for architecture, engineering, and construction firms had reached its lowest level in over a decade. The following construction sectors, ranked from biggest to lowest decrease, saw the least amount of proposal activity during that time period:
- Office buildings
- Office buildings (lease)
- Retail (lease)
- Materials manufacturing
- Petroleum facilities
- Sports facilities
- Higher education facilities
There is some good news though. According to the same report featured in a ConstructionDive article, the water/wastewater, energy/utilities, healthcare and housing construction sectors showed net growth in proposal activity for the second quarter. What does this all mean? Economic recovery for construction firms is going to be fairly shaky for a while, because although some sectors are beginning to pick up speed, the majority still have a ways to go.
Much of America’s workforce is working remotely in response to the novel coronavirus (COVID-19) outbreak. Surprisingly, some construction projects have actually experienced rapid completion due to limited on-the-job disruptions and “blank” canvases (empty buildings).
Amid limited on-the-job disruptions though, the construction industry will likely be facing supply chain interruptions as a result of China’s slowdown caused by the pandemic. Ultimately, there will soon have to be a tradeoff between limited on-the-job disruptions and supply chain slowdowns.
With supply chain interruptions, Trent Cotney of Cotney Construction Law warns of higher cost and price fluctuations, material shortages, logistics breakdowns, order cancellations, and extended shipping delays. These disruptions will also make securing funding and insurance increasingly difficult for builders.
As a result, facing slower project completions will expose construction companies to several legal vulnerabilities with suppliers and project owners. Also, keep in mind that some project owners may want to pause before moving forward with any work due to uncertainties surrounding the coronavirus outbreak and economy.
Labor shortages are another growing threat in the construction sector. Before the pandemic began it was difficult to find skilled workers. Now, that task is even more difficult. According to an AGC survey, in one month reports of labor shortages by contractors increased by eleven percent.
And as the country begins to open back up, absenteeism is growing. Workers are experiencing a lot of anxiety and fear around returning back to work, with one Construction Dive survey showing that seventy-eight percent of contractors' felt it was "one of the top ways that the crisis has affected their business."
It’s also important to note that much of the COVID-19 impacts will not be felt by the construction sector until next year, especially for the non-residential construction sector. Anirban Basu, a chief economist for the Associated Builders and Contractors, states that this is because “non-residential construction typically lags the overall economy by 12 to 18 months.” So far though, job losses have already been felt in restaurant, travel and leisure industry construction.
An accelerated shift in technology is another trend we've seen in the construction industry due to COVID-19. The industry is being forced to adopt AI and remote collaboration tools, enabling those in non-physical labor roles to work from home while continuing to communicate with their on-site counterparts. We think this trend is here to stay because of the efficiency and productivity of these technologies. AI and remote collaboration tools can reduce the number of people needed on site by facilitating the following virtually:
➤ Tours of the construction site
➤ Time-sensitive decision making
➤ Communicating and addressing issues as they arise
How Does COVID-19 Put Construction Workers at Risk?
Aside from health-related concerns, the following factors pose potential risks to construction professionals:
➤ Limited remote work abilities
➤ Insufficient contracts for construction projects
➤ Workforce shortages
➤ Supply shortages
As the construction industry begins heading back to work, it's important to have remote work tools in place and ensure employees are comfortable using them. Why? Some experts predict there will be a "second wave" of the COVID-19 virus. If a "second wave" does come to fruition you'll want to be able to seamlessly transition to remote work wherever possible, rather than scrambling at the last minute to find tools that work and train your staff quickly.
Even if your staff is back in the office and support staff is on-site, most remote collaboration tools, like Arbeit Connect, improve communication and collaboration on-site too. By staying one step ahead you can not only be prepared for a "second wave", but your workers have more time to get comfortable using new tools while improving productivity, communication, and employee engagement.
"We've seen employee engagement that is higher than when people are working in the office. Our people are enjoying the additional flexibility of working from home," says AECOM CEO Michael S. Burke in one ConstructionDive article.
Although on-site construction workers are unable to do their job while working from home (for obvious reasons), some managerial and support staff do have the ability to work remotely in the construction sector. For these roles, telecommuting and work from home procedures are still required to whatever extent possible.
Managerial and support staff are essential for the completion of on-site jobs, which is why construction firms need to have the proper tools in place to facilitate remote work within these roles. At the bare minimum, contractors should at least be conducting meetings with internal and external project partners virtually. Limiting any unnecessary in-person contact will ensure that projects run as smoothly as possible.
VoIP Teleconferencing & Cloud-Based Tools as a Solution
These internet and cloud-based tools can allow for a portion of your managerial and support staff to work remotely:
➤ Cloud-based voice, video conferencing & group messaging platforms (Arbeit Connect)
➤ Cloud-based file storage (Dropbox)
With these tools, your off-site workforce will be better prepared to work from home (or anywhere with an internet connection), while effectively communicating with on-site workers. According to Andrew Hewitt, analyst at Forrester, for optimal productivity you’ll also want to utilize a VPN and ensure your staff has sufficient bandwidth in the location they’ll be working from.
Andrew states that a VPN will provide authentication layers so employees can access the cloud-based systems mentioned above without compromising any sensitive data. As for bandwidth, an internet connection of at least 50 Mbps should be sufficient.
Get Creative With Social Distancing
Despite utilizing a video & voice conferencing tool to facilitate communication between virtual & on-site workers, construction workers will still need to be present on job sites to continue moving forward with construction projects.
Because construction workers that provide on-site work cannot work remotely, you need to find a way to follow social distancing guidelines to the greatest extent possible.
How Construction Workers Can Social Distance
➤ Stagger on-site employee's work schedules to avoid crowding
➤ Require that a 6 ft. distance be maintained between employees on the job site at all times
➤ Encourage employees to avoid taking public transit and carpooling - if they do not have a car, consider providing them a rental car for the time being
➤ Refrain from performing any tasks on job sites that don't allow a 6 ft. distance between workers
Create a COVID-19 Information Hub
COVID-19 wreaked havoc on the construction industry. Because of that havoc, communicating clearly and consistently can be challenging. Especially as crews begin to return to work amid looser restrictions, it's a good idea to invest your resources into creating a COVID-19 information hub for your company. Here are some suggestions on what to include:
➤ Relevant messages from leadership
➤ Policies & best practices relating to COVID-19
➤ Any forms relating to COVID-19
➤ Links to relevant CDC resources
➤ All preparedness & response plans for COVID-19
➤ Guides for properly using personal protection equipment
➤ Mental health resources
As for which channel you should use for delivery, think of what would be the most easily accessible by your employees. For example, if they usually have access to the internet, the hub could be a page on your company website that's visible to all such as the one created by EV Construction.
If you normally communicate with employees via e-mail, then sending out a weekly newsletter would be a better option. In a ConstructionDive article, the CEO of EV construction shared the multiple methods they'd be using to distribute information contained in their hub to employees: newsletters, emails, webinars, video calls, and blogs.
Whichever way you choose to do it, creating an easily accessible hub will help ease your employees fears of going back to work, ensure safer working conditions, and reduce worker absenteeism as a result.
Legal liabilities and insufficient contracts for construction projects pose another financial risk to those working in the construction sector. If you haven’t done so already, now is the time to review your construction project contracts to ensure they have provisions to protect your firm from being liable for any of the following:
➤ Increased costs
➤ Supply chain delays
➤ Project interruptions
According to Trent Cotney, CEO of Cotney Construction Law, including or reviewing current force majeure clauses and price acceleration provisions in your construction project contracts are important for protecting your firm from being held liable for these scenarios.
Force Majeure Clauses
Including a force majeure clause can protect your firm by extending, temporarily suspending, or terminating the client contract due to unexpected and unavoidable events. Trent explains that when implementing this, make sure the force majeure clause answers the following questions:
➤ What events are considered force majeure?
➤ Who is responsible for suspending performance?
➤ Who is allowed to invoke the clause?
➤ Which contractual obligations are covered by the clause?
➤ How should the parties determine whether the event creates an inability to perform?
➤ What happens if the force majeure event continues for more than a specified period?
If you have already included a force majeure clause in your client contract that answers all of these questions, make sure that the provisions protect you against pandemics. Many contractors may not have considered that to be a potential risk when they originally included the clause.
Price Acceleration Provisions
Trent also explains how adding price acceleration provisions to your client contracts can protect your construction firm from labor and material price increases. These provisions give contractors the ability to adjust contract prices to more accurately reflect the revised actual cost of labor and materials. This can ensure that your firm receives the correct compensation when taking into account price surges that may occur as a result of supply shortages.
Here’s one example that Trent provides of a price acceleration provision that you could include:
“If there is an increase in the actual cost of the labor or materials charged to the Contractor in excess of 5% subsequent to making this Agreement, the price set forth in this Agreement shall be increased without the need for a written change order or amendment to the contract to reflect the price increase and additional direct cost to the Contractor. Contractor will submit written documentation of the increased charges to the Prime Contractor/Owner upon request. As an additional remedy, if the actual cost of any line item increases more than 10% subsequent to the making of this Agreement, Contractor, at its sole discretion, may terminate the contract for convenience.”
Specialized Subcontractor Shortages
In addition to potential supply shortages, the lack of specialized subcontractors needed to complete projects also poses a risk to construction firms.
“Factory workers, construction workers, supervisors, and managers could all end up quarantined in a city like Seattle and not be available to work,” Construction Attorney Steve Lesser says. "Absent a reliable work force, projects become stalled."
If your firm is located in or relies on subcontractors located in an area with a significant amount of COVID-19 cases, seek out back-up subcontractors in areas that have been less impacted by the outbreak that you can rely on if need be.
Supply Chain Shortages & Interruptions
Due to the slowdown in production that has been felt globally, supply chain shortages and interruptions are to be expected. With that comes more volatile fluctuations, increased costs and slower project completion times. You can protect your construction firm from legal liabilities with suppliers and clients by doing the following:
➤ Identify supply chain vulnerabilities and take action to mitigate these
➤ Implement cost-saving measures
➤ Review client contracts to ensure proper protections are in place
According to the New York Times, limited access to overseas supplies such as marble, tile, paving stones, furniture, lighting, and elevators pose one of the biggest threats to construction firms as of now.
Layoffs in Response to Higher Costs
With supply chain interruptions come higher costs, and with higher costs come potential layoffs. You may not have experienced rising costs of doing business yet, but you may soon. To prepare, take cautionary measures by finding ways to reduce costs and eliminating non-essential services. Layoffs should be the last option if all else fails.
If you’re looking to save money while allowing managerial and support staff to work remotely, consider transitioning to our VoIP phone system, Arbeit Voice. We’ve been able to unify companies’ communications while slashing phone bills by up to 50%. The best part is our responsive support team makes the transition and setup process as easy as possible for you and your employees.
How is the Outbreak Affecting Construction Projects?
The novel coronavirus outbreak (COVID-19) has been impacting construction projects differently in each state. Projects are continuing as normal in some states, while in others construction has come to a nearly complete halt.
The effect of COVID-19 on construction projects in specific states are arranged in alphabetical order below. We’ll be regularly updating this post to reflect updated state regulations, legislation and proposals affecting the construction sector, so be sure to check back often!
According to a ConstructionDive article, the governor of California has explicitly stated that construction work, including residential construction, is an essential service.
“The California State Public Health Officer and Director of the California Department of Public Health is ordering all individuals living in the State of California to stay home or at their place of residence, except as needed to maintain continuity of operation of the federal critical infrastructure sectors, critical government services, schools, childcare and construction, including housing construction.”
Due to the containment measures that have gone into place in the San Francisco Bay Area in particular, The Associated General Contractors of California are seeking clarification on whether the governor’s orders override the stricter construction shutdowns in certain cities.
Ramping Up Hospital & Building Construction
Not only is California allowing most construction projects to continue, but the head of California’s Building and Construction Trades Union has plans for thousands of construction workers to “retool and refit” hospitals and buildings as a “surge response to the pandemic.”
The majority of the Aspen City Council recently agreed to loosen construction restrictions, as reported by The Aspen Times. They also agreed to expedite building permit issues to let developers work on multiple projects simultaneously, as well as extend the right-of-way construction season from June 1st to July 1st, and then have it resume prior to Labor Day.
According to The Colorado Independent, a stay-at-home order has been issued for the following cities in the state of Colorado:
➤ San Miguel County
The order requires that businesses “implement work from home policies and delivery of goods to the greatest extent possible.”
Denver has considered liquor stores, recreational marijuana dispensaries, and all construction projects exempt from the order, given that “extreme physical distancing” is being put into practice.
Additionally, the governor of Colorado ordered all “non-critical workplaces” in the state to cut their in-person workforces in half. Construction along with the following industries are considered exempt from the order - health care operations, critical infrastructure, and manufacturing, critical retail, critical services, news media, financial institutions, defense, public safety services, vendors providing critical service and/or products, and critical government functions.
A health order has been issued that requires all residential and commercial construction sites to close by April 1st and remain closed until at least April 17th with the following exceptions:
➤ Internet/broadband providers
➤ Other service providers that maintain the safety, sanitation & essential operation of residences, essential activities & essential businesses
The following types of businesses in the construction sector are considered essential and can continue to operate as normal in Connecticut:
➤ All skilled trades (electricians, HVACs, plumbers, etc.)
➤ Residential and commercial construction
➤ Related construction firms and professionals that are necessary for emergency repair and safety services on essential infrastructure
➤ Construction support activities (planning, engineering, design, bridge inspections, etc.)
You can read more on the State of Connecticut’s actions relating to COVID-19 here.
According to a ConstructionDive article, construction work is being considered essential meaning that the majority of projects will be able to continue.
An executive order was signed by the governor stating that “all public-facing businesses that encourage public congregation or that by the nature of their service to the public cannot comply with the CDC guidelines concerning social distancing are going to have to cease their operations.”
The following businesses relating to the construction sector are exempt from the order:
➤ Home repair
All non-essential businesses were ordered to close by the governor. These businesses relating to the construction sector are exempt from the statewide order:
➤ Building/property maintenance companies
➤ Construction Companies
➤ Construction, medical and personal protection equipment
➤ Utility maintenance services
Under the governor's new executive order, only public construction projects such as wastewater plants, roads and bridges are explicitly being allowed to continue. According to the Press Herald, outside of these some exterior projects are continuing to take place while interior projects are coming to a halt.
Due to a shortage of protective equipment, the governor of Minnesota issued an executive order requiring all health care systems and businesses with health care protective gear must disclose their inventories to the state. Construction companies that have access to protective healthcare gear are included in the order.
Michigan's governor recently announced that construction work will resume on May 7th, as reported by Construction Dive.
According to The Detroit News, the industry will be subject to the following new requirements:
➤ Enforced physical distancing measures
➤ Designation of an on-site supervisor to oversee COVID-19 safety measures
➤ Daily health screenings for workers
➤ Requiring face masks to be worn when physical distancing is not possible
Although the governor has urged city officials to lift the construction ban, several cities including Boston have went on to place an indefinite ban on all construction.
According to a ConstructionDive article, so far the following cities within the state have halted all construction:
➤ West Tisbury
Emergency construction projects as a response to the outbreak are the only exception.
According to the Omaha World Herald, The governor of Nebraska has encouraged the continuation of construction projects during the novel coronavirus outbreak. Omaha, in particular, has seen construction and redevelopment sites continuing to run along smoothly, maybe even smoother than before the outbreak.
New construction projects are also beginning to take hold as we approach April. Highway and infrastructure contractors are already beginning to call in their crew to get work started on these types of projects.
According to Eli Segall of the Las Vegas Review-Journal, the governor of Nevada has considered home building and other construction activities to be essential work.
Although construction work is being considered essential, that does not mean job sites can continue to operate as they did before the pandemic. Nevada state officials have stated that construction sites should take the following precautions:
➤ Ensure workers remain 6 ft. apart
➤ Restrict meetings and gatherings to 10 people or less
➤ Conduct daily assessments of workers' health conditions
** 6/8/2020 UPDATE:
New York City is joining the rest of New York State in reopening nonessential construction.
Read more on this here.
As many states begin to slowly reopen, Governor Cuomo has given some insight on what that will look like for New York State. When the decision is made to reopen it will be done in an incremental fashion, beginning with construction and manufacturing professionals returning to work.
Before reopening though, construction firms will need to show they can operate safely and abide by CDC guidelines. Until New York reopens, only school, healthcare facility and affordable housing projects will be allowed to move forward.
According to a ConstructionDive article, the majority of construction projects are continuing to move forward in New York.
“New York State on PAUSE” Executive Order
➤ Skilled trades (electricians, plumbers, construction firms and other related professionals) providing on-site work for essential infrastructure, emergency repair, and safety purposes are exempt.
➤ As of right now, construction firms will not need a special designation to continue on-site work
➤ Only employees that are needed to provide essential products and services can work at the physical business location
➤ Whether all construction work should be exempt from the executive order is still being discussed
New York City
In NYC the Department of Buildings ordered that all construction work be halted, aside from emergency construction (activities needed to ensure the health and safety of building occupants), essential facility work (roads, bridges, transit, utilities, healthcare facilities, transitional housing and homeless shelters), and projects requiring only one on-site worker.
According to a Daily Voice article, when a Bergen County executive proposed the county-wide shutdown of construction companies, the New Jersey governor revoked the order and considered construction to be essential.
According to the Las Cruces Sun News, the following construction sector related businesses will be allowed to stay open in the state of New Mexico:
➤ Childcare for facilities for workers employed in essential services
➤ Infrastructure operations (public works, commercial and residential construction/maintenance)
➤ Safety and sanitation services for residences and essential businesses
➤ Gas stations and auto repair facilities
➤ Hardware stores
➤ Real estate services
➤ Mailing and shipping services
➤ Professional legal and accounting services
➤ Logistics and storage services
A phased reopening of construction sites in Ohio began on May 1st, as reported by Construction Dive.
Construction workers and job sites continue to stay active after being deemed essential in the governor's order to shutdown all non-essential businesses within the state.
According to a BisNow Article, there has been a lot of debate regarding whether construction work should continue. Some unions believe on-site work should come to a halt to keep workers safe, while others believe construction work should continue on job sites to keep workers employed.
At any time the governor could order that all construction work come to a halt.
According to Oklahoma’s Channel 4 News, construction firms are continuing on-site work, but with added precautionary measures such as social distancing and allowing only up to 10 employees to be working in one area at the same time.
As reported in a Construction Dive article, construction projects resumed on May 1st for Pennsylvania. The governor provided the following guidance for facilitating the reopening of construction within the state:
➤ Provide face masks for all employees
➤ Have hand-washing stations readily available & accessible by all employees
➤ Stagger employee shifts, breaks and work areas
➤ Maintain a six-foot minimum distance between all workers (with the exception of times they must deviate due to personal or public safety reasons)
➤ Designate a "Pandemic Safety Officer" for each project, worksite or contractor
➤ Establish practices for handling employees with probable or confirmed COVID-19 cases
➤ Limit gatherings to no more than 10 people
➤ Limit tool sharing and sanitize if they must be shared
➤ Implement jobsite screening based on CDC guidance
➤ Prohibit unnecessary visitors and limit supplier deliveries to worksites
➤ Ensure that workers avoid carpooling to the jobsite
Governor Mandates Closure of Non-Life Sustaining Businesses
➤ Requires the closure of all real estate brokerage firms and nearly all forms of construction including residential, non-residential, utility, highway, street, and bridge.
➤ Healthcare facility construction sites are the only exception currently.
Despite these closures, construction work on the University of Pennsylvania Health System's Pavilion hospital is continuing 24/7.
According to an Austin American-Statesman article, shortly after Texas began to reopen new virus clusters began appearing in Austin. Unfortunately, the construction industry accounts for nineteen of the thirty-six new COVID-19 clusters. COVID-19 is still a risk to those in the construction industry. This shows how important it is to incorporate remote work wherever possible and implement precautionary safety and health measures for on-site workers to follow.
The mayor of the City of Austin announced a stay at home order that will go into effect on March 24th at midnight. The following businesses relating to the construction sector are allowed to stay open being deemed critical infrastructure:
The order specifies that commercial and general home construction are being deemed non-essential, while projects relating to affordable housing, homelessness and essential government functions will be able to continue.
The AGC and Vermont Agency of Transportation have been working together to establish protocols and systems that would allow road and bridge construction to continue amid the novel coronavirus outbreak.
Despite many other businesses being ordered to shut down, Vermont’s road construction contractors have begun working on projects as a way of getting ahead of potential supply chain problems.
The governor of Washington has released a construction-specific clarification to the state-at-home order. The clarification specifically states that the following types of construction workers that do not provide work relating to healthcare, transportation, energy, defense, critical manufacturing, emergency repairs or publicly financed low-income housing must cease operations:
➤ Sheet metal
➤ Iron workers
➤ Pipe trades
➤ Heavy equipment & crane operators
➤ Pesticide applicators
➤ Cleaning/janitorial staff for commercial and governmental properties
➤ Security staff
➤ Operating engineers
➤ HVAC technicians
➤ Moving/relocation services
➤Forestry & arborists
The governor of West Virginia has ordered a Stay at Home order to go into effect on March 24th at 8:00 PM. The following essential infrastructure relating to the construction sector will be allowed to remain open:
➤ Utilities (water, sewer, and natural gas)
➤ Coal mining and production/distribution of raw materials including oil and gas
➤ Hardware and supply stores
➤ Businesses that manufacture, produce, prepare, build, store, sell and distribute materials and facilities necessary to respond to the epidemic
➤ The building, construction and other trades that support essential infrastructure
➤ Flood control and solid waste recycling, sanitation collection, and removal
Starting on March 25th at 8 AM, all non-essential business and non-essential travel will be prohibited by the governor of Wisconsin.
Next Steps: How Can We Help?
The Arbeit team is well-versed in working remotely. Due to the non-physical nature of our work, we do understand that it's much easier for us to work from home as opposed to jobs of a physical nature such as construction.
Overall, construction is being widely considered an essential business during the novel coronavirus (COVID-19) outbreak, meaning many firms must continue operating. We want to help you achieve unified communications between on-site workers and support staff, with no location for the two to meet in-person needed.
Whether you are or aren't looking to use our products in transitioning team members to working from home, give us a call so we can point you in the right direction of advice & tools that may help you out.
Our team wishes your business and team an abundance of health, safety and profitability during these trying times. 💜
➤ Interactive map showing the status of construction activity in each state
Disclaimer: This article is not intended to be medical or legal advice.