When is it right to start thinking about succession planning and preparing a construction company for transition? Many would agree – in concept, at least – that serious thought regarding succession and transition planning should begin at a company’s inception and be revisited throughout its lifecycle, but as a practical matter, it is frequently not part of the mindset when growing a business. This article explores issues that construction company owners should consider in order to achieve smooth transition of ownership and control. We will address three critical questions:

• What happens to the business when an owner retires;
• In the event an owner(s) become disabled; and,
• Unplanned exit/owner pre-deceases her/his exit from the company

Our earlier alert on AB5 outlined the Dynamex case, which brought the inflexible ABC Standard to California for determining whether a worker is an employee or an independent contractor for IWC wage orders. The Legislature passed, and Governor Newsom signed, AB5, codifying the Dynamex case and the ABC Standard for wage orders, the Labor Code, unemployment insurance, and worker’s compensation issues.

We also discussed the Borello test, which applies when a hiring party can meet the construction or construction-related trucking exception and which applies a more employer friendly multi-factor test.

A construction site is not a factory, so managing a construction project is unlike managing a production line. Aiforsite, a construction tech startup, uses video, IoT, and AI to make construction controllable – analogously to manufacturing.

“Contractors go to seminars and read about the benefits of digitalization. However, when they eventually want to buy a solution that would digitalize their construction sites, they come out empty-handed,” says Kari Hirvijärvi, the CEO of Aiforsite. “There are plenty of apps and services that are point solutions, that do not help to manage a site comprehensively. That’s where we come in.”

A joint venture led by ExxonMobil awarded Fluor Corp. and two partners the $3.73-billion engineering procurement and construction contract for onshore facilities associated with a $30-billion liquefied natural gas project in Mozambique, the company confirmed October 8. The project would be Africa's largest private investment, said Bloomberg.

Replacing two Cape Cod Canal bridges for an estimated $1 billion rather than rehabilitating them would be more cost-effective, according to a federal study announced on Oct. 3.

Finnish economics professor Osmo A. Wiio claimed that we typically overestimate the near future and underestimate the distant future. His thoughts resonate well with today’s perception of design automation.

Back in the 1980s, I took part in the first-ever Finnish “integrated CAD” projects, in which the architect, the structural, HVAC, and electrical engineers exchanged CAD files instead of blueprints. We used minicomputers, which had about as much computing power as today’s laser printer. Still, we were able to automate design tasks.

After 20 years, the end of the $550-million Brays Bayou Flood Damage Reduction Project in Houston is finally in sight

Reprinted courtesy of Louise Poirier, ENR and Pam Radtke Russell, ENR
Ms. Poirier may be contacted at poirierl@enr.com
Ms. Russell may be contacted at Russellp@bnpmedia.com

Even with a lot of focus recently on diversity in the workplace, construction is still a male-dominated industry. According to recent surveys, women make up less than 10% of the construction workforce.

There is a higher percentage of women serving in Congress (currently 23.7%) and in the active duty military (14%). Women do, in fact, make up 47% of the total civilian workforce. So, as the construction industry looks for ways to hire and develop skilled labor, diversity has become more important than ever.

There are several challenges to increasing diversity, specifically among women in construction that need to be addressed. These include unwelcome worksites, sexual harassment issues, flexibility and the perception by others that women on the team are not as capable for projects that require manual labor. It’s not the women, it’s the environment and the culture.

Reprinted courtesy of RubinBrown LLP, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Millennials are slowly taking over the workforce as baby boomers are exiting. By 2024, it is projected that three in four U.S. workers will be millennials. This is particularly impacting the construction industry, with more than 40% of the current construction workforce likely to be retired by 2031. This change is creating a labor gap that must be filled, but the problem is attracting millennial workers to the industry.

The rising workforce is quite different in comparison to its predecessor. The priorities have shifted. Millennials are after benefits and perks rather than pay, so much so that more than 80% of millennials would change jobs to obtain better benefits, and nearly 90% would pass up a pay raise in favor of benefits and perks.

Millennials will require a different approach to recruit, but it isn’t impossible. Below are a few steps contractors can take to attract them to their teams.

Reprinted courtesy of Darren Bounds, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

Hospitality construction and renovation work is unique in that, more often than not, it requires contractors to perform complex, bespoke, and intricate work while remaining invisible and inaudible. To eliminate disruptions to the typical flow of business, seldom do luxury hospitality venues close for construction. Instead, renovation and restoration projects must be completed in short, often aggressive timelines.

In addition to everyday construction challenges, aggressive timelines require general contractors to anticipate and plan for a number of scenarios. Inevitably, the one-of-a-kind Italian tile will get delayed in customs, or a spontaneous labor strike will prohibit ships from being unloaded, thus delaying critical materials to the jobsite. These occurrences cannot be used to rationalize delays.

Reprinted courtesy of Kate Ivanova, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.

With the recent increase in the number of federal and state task forces aimed at curbing tax fraud in the construction industry, construction companies would be wise to ensure their businesses are in compliance with the tax laws. One area in particular that has drawn increased scrutiny by federal and state tax authorities is the misclassification of construction workers as independent contractors instead of as employees of the business. Construction companies can reduce the risk of an audit and incurring costly penalties by accurately classifying its workers at the outset of the relationship.

Reprinted courtesy of Gregory Seador, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.