In construction and real estate, everything is future focused. Are you looking far enough ahead? Unsurprisingly, some of the changes that are likely to most affect these industries in coming years are related to technology, and they could mean exciting things for your business. It’s not all good news, though; some of the trends we’re forecasting could spell trouble.
Opioids and Marijuana
The opioid epidemic affects Americans in all 50 states and across all industries, but we have particular cause for concern here in Maine. Ours is one of the top 10 states for opioid-related overdose deaths, and the number of opioid overdose deaths rose by 10.9 percent between January 2017 and January 2018. In part because opioids are often prescribed after injury, workers in the construction industry are at elevated risk of developing addictions. And of course, impaired workers create unsafe conditions for everyone on the job site.
In related news, recreational marijuana sales are expected to begin here in Maine in spring 2019. While many are celebrating that news, concerns about on-the-job impairment are troubling many in the construction industry.
If your business doesn’t yet have a rigorous drug use policy, now’s the time to create one. An effective policy might include extensive mandatory safety training, random drug testing and an action plan for helping affected workers seek treatment and safely return to the job.
Recruiting and HR
Labor shortages continue to plague the construction and real estate industries. Employers who have struggled to find qualified tradesmen can expect the shortage to continue and possibly worsen in coming years. We can attribute the lack of skilled workers to several factors. Some of those factors – like immigration policies and the aging of the current construction workforce – are outside your control. The fact that schools tend to put more emphasis on college than on trade or vocational schools is also a bigger problem than a single employer can solve.
But motivated employers can do more to build up their workforces. Increasing pay and benefits helps attract experienced workers. Creating training programs and reimbursing tuition for relevant trade programs can be an effective way of finding young employees who are unskilled but willing to learn. Local high schools and trade schools are fertile recruiting grounds.
Like in most industries, technological advancements that affect construction and real estate are happening so quickly that few businesses can keep pace. They won’t all be useful for all construction and real estate companies, but some of these developments are potential game changers.
Augmented reality (or virtual reality) is a pricy investment that pays off in spades for businesses that can afford to use it. With an augmented reality system, a builder can take a client to the site of his future home and show him a 3D image of the building, set against the real, live backdrop. Another exciting development is the popularity of building information modeling (BIM). This technology allows builders to oversee an entire project, from the first designs to the final touches, using 4D, 5D, 6D, 7D and even 8D programming.
We can also expect to see drones being used in even more ways, including for photogrammetry (taking measurements via photography) and project management purposes. The development of more advanced information systems will improve efficiency of communication, allow for higher-level mobile work and reduce paper usage. Semi-autonomous equipment and 3D printing may also be commonplace within the next decade, too.
Succession Planning and Exit Strategies
Where will your business be in 10 years? Will you still be part of it? Business owners who are focused on day-to-day operations and year-end goals often fail to make big-picture plans. Most business owners (79 percent) say that they want to leave their businesses within the next decade, and about the same number of owners expect that they’ll leave their businesses because of their own plans. Yet 83 percent of business owners have no concrete, written plans for their own exits.
If you’re planning to pass your business (or your share of a jointly-owned business) to a partner or relative, failing to make those plans is a risky and potentially disastrous move. You might intend to wait 10 or 15 years before retiring, but what happens if an illness or injury forces you to leave the business suddenly? Will your employees be taken care of? Even if you hope retirement is a long way off, creating succession plans can’t wait. In the best case scenario, you won’t use them until you’re ready. And if the worst case scenario happens, at least your business can remain operational.
Although we can make some educated guesses about the future of construction and real estate, there will always be uncertainty ahead. Prepare for your own financial future, and for that of your business, with the help of ARB’s specialized CPA services. Contact David Jean to talk more about trends in construction and real estate or for help in addressing the needs of your business.