8 Top challenges and issues in the construction industry

8 Top challenges and issues in the construction industry

Construction problems are all too common throughout a project’s life cycle. Project managers tasked with ensuring projects remain on schedule, within budget, compliant with safety regulations, and running smoothly know that it can be difficult with the amount of potential and unanticipated issues that tend to crop up. Here are some of the top challenges and problems in the construction industry.

Challenge NameProblemSolution
Cost OverrunExceeds budget due to poor estimates, design changes, and payment delays.Improve planning, manage changes, ensure timely payments.
DelaysProjects often face delays from uncontrollable factors and management issues.Leverage technology for scheduling and data accuracy.
Slow Adaptation to Emerging TechnologiesHesitance towards new tech adoption limits efficiency improvements.Invest in new technologies for management and communication improvements.
Inadequate CommunicationCommunication gaps lead to unrealistic expectations and missed tasks.Use clear guidelines and technology for better communication.
Labor ShortageSkill gaps and a declining workforce challenge the industry.Invest in tech and partnerships with schools for apprenticeships.
Poor Planning, Forecasting, and BudgetingGoals unmet due to improper planning, forecasting, and budget issues.Set realistic goals, communicate effectively, and plan finances carefully.
Lacking Organization and Haphazard Document ManagementManual documentation prone to errors.Shift to digital, paperless document management.
Problems with Cash FlowPayment delays disrupt the ability to pay for labor and materials.Implement modern payment systems and manage finances efficiently.

1.   Cost overrun

Among the top construction industry problems is cost overrun, or when a project exceeds its pre-planned budget. A McKinsey study estimates that 98% of large construction projects deal with cost overruns of more than 30%. It’s often caused by poor cost estimates during the planning phase, design change requests, and payment delays.

The result: lowered profit margins, material shortages due to the lack of a remaining budget, damage to the construction firm’s reputation, and delays, which is in itself a prevalent industry issue.

2.   Delays

The same McKinsey study also states that 77% of construction projects are at least 40% late. Some contributing factors can’t be controlled, such as the weather, the nationwide labor shortage (caused by recessions), and equipment failures. But there are definitely factors that can be prevented, including scheduling issues, project conflicts, and incorrect data.

Even the most diligent and conscientious project manager is prone to human error. One of the best ways to mitigate risk is to reduce the need for manual management through the use of technology, but the industry’s willingness to adapt can be a problem as well.

3.   Slow adaptation to emerging technologies

Perhaps one of the trickiest problems in the construction industry is its hesitance to adopt new methodologies, which include technologies that could very well make their workplaces more efficient. Even when construction firms acknowledge that there are technological solutions that they could benefit from, budgeting frequently remains quite small for new software platforms and gadgets.

Even so, technologies like Bridgit Bench allow construction firms to counteract some of the industry’s core problems, such as disorganized workforce management, insufficient scheduling, and inadequate communication.

4.   Inadequate communication

One of the more everyday construction issues is inadequate communication. Since projects require multiple professionals during the planning stage and many contractors on the job, effective information exchange is crucial for the project’s success.

Oftentimes, there’s a disconnect between the office and on-site workers. Communication inefficiencies are linked to a high percentage of construction problems, with inadequacies resulting in complications such as unrealistic expectations (due to planners not being on the field and being unaware of how long a task may take) and important tasks being overlooked (with teams remaining uninformed about issues until it’s too late).

Project managers will need to establish clear guidelines and can keep everyone in the loop by summarizing any obstacles and progress made at the end of each day. Documenting all communication also helps in cases where conflicts arise.

Here’s a look at all the communication options built into Bridgit Bench to help keep your team up to date.

5.   Labor shortage

Many construction challenges originate from one core issue: the persistent labor shortage. The industry has long been needing more skilled and qualified professionals to build the world’s future infrastructure, but it’s proven to be difficult for a number of reasons.

The Great Recession in 2008, for example, saw many skilled workers laid off or leaving the industry and never returning, and the 2019 COVID pandemic only worsened the aggressive labor shortage.

Further exacerbating the lack of available labor is older workers retiring and leaving behind a pretty significant skill gap. The younger generation has evidently not been enough to fill the hole, as according to Associated Builders and Contractors, the number of construction workers aged 25 to 54 declined 8% over the past decade.

There are many ways to counteract the shortage of young workers, such as investing in new technologies to demonstrate a commitment to efficiency and working with educational institutions to offer apprenticeship programs.

Better people planning is just one click away

Take a quick 1-minute walk-through of Bridgit Bench before booking a demo with one of our representatives.

Request a full demo →

6.   Poor planning, forecasting, and budgeting

When projects aren’t properly planned or forecasted, it leads to unachievable goals, which results in construction issues like stagnant productivity. Forecasting may focus too much on the long-term and too little on the short-term.

It helps during the planning phase to break a larger goal into smaller and more attainable monthly, weekly, and daily objectives to assess whether it’s actually feasible. If not, it’s important to communicate the possibility of issues with stakeholders and provide solutions or an alternative plan that adheres to a realistic budget and timeline.

In terms of budgeting, incorrect estimates can be detrimental to progress and can see projects delayed or dropped altogether, which is why initially accounting for all expenses is vital to the project’s success.

7.   Lacking organization and haphazard document management

Another one of the prevalent construction problems is lacking organization and haphazard document management. Construction involves dealing with a lot of documentation, from contracts to material orders to receipts to insurance certificates. Manual document management can be inefficient and create room for error.

Turning your system into one that’s digital and paperless allows you better access, centralizing all important information.

8.   Problems with cash flow

Problems with cash flow often cause construction challenges. Having a steady stream of funds is crucial to paying employees, subcontractors, vendors, and suppliers on time. When payments fall behind, it further disrupts cash flow, halting project progress and causing delays.

The reason so many construction firms struggle with managing a project’s funding is that they rely on outdated systems like invoicing. Considering more modern solutions can ensure that all payments are followed through with and accounted for.

Bridgit, a modern workforce management solution

Bridgit Bench is a cloud-based system that allows you to modernize your workforce management process.

Make resource and labor management more efficient and meet your workforce needs with our robust allocation dashboard that gives you immediate access to daily allocations, plus the resource statuses of current and future projects.

Bridgit also improves communication with notifications that keep your teams up to date through automated email messaging, and custom construction management reports to keep everyone on the same page during meetings.

Improve organization with centralized labor data and consolidate your project and field operations in one place. All project and field labor force information will be in one easy-to-use solution.

Circumvent the top construction challenges that the industry deals with by choosing Bridgit Bench today!

Construction Challenges FAQ

How can construction firms evaluate the impact of technology on costs and project efficiency?

Adopting new technologies isn’t an automatic process where cost savings and project efficiency are self-evident. It takes a bit of effort to determine if the technology you are using impact the bottom-line. The ideal is to have a set of key performance indicators (KPIs) that you are already monitoring such as project completion times, budget adherences, and the number of safety incidents. Then, you can compare the before and after to see if the new tech is having an impact. 

If you don’t have access to historical data, then setting those metrics up now would be a wise investment. You can also rely on qualitative feedback from project managers, contractors, and superintendents to gauge the impact. Highly impactful technology may be noticeable in cost savings, but most technology is harder to evaluate and requires a nuanced reporting approach.

What strategies work for attracting the younger generation to the construction industry?

This is an increasingly important challenge in a market seeing more labor shortages. Construction firms need to modernize their approach to recruitment and use social media to highlight the benefits of a career in construction. Younger generations are technologically savvy by default; appealing to them by highlighting the innovations in the construction industry may be a valid strategy. As well, partnerships with educational institutions to offer exposure to career options in construction and opportunities for hands-on training could be valuable.

Can Bridgit Bench integrate with other project management and financial software used in the construction industry?

Yes, Bridgit Bench is designed to seamlessly integrate with a wide range of project management and financial software solutions commonly used in the construction industry. This flexibility ensures that firms can maintain their existing workflows and data ecosystems, enhancing rather than disrupting their operations. The platform’s open API facilitates easy connections, making it possible to synchronize data across systems for comprehensive project oversight and more efficient resource management.

Michel Richer headshot

Michel Richer

Michel Richer is the Manager of Content and Product Marketing at Bridgit. He started in the construction industry early on with a local restoration company. Michel is driven to propel the construction industry forward by helping to eliminate outdated, ineffective processes.

Connect on LinkedIn →