We just returned from the 2019 Acumatica Summit, where industry experts pulled back the curtain on emerging trends in the construction industry. Insider CPAs, construction company controllers, industry consultants and Acumatica partners shared insights that forecast the coming landscape for construction in 2019 and beyond. Four common themes emerged that are top concerns for forward-thinking construction companies.
What should you expect to come your way this year? Here's what we learned.
War Over Talent
There's a boom in construction right now, which is a good thing for contractors—but it comes at a cost. Because there are more jobs than people, it means attracting and retaining talent is a big issue. Contractors will need to find ways to get creative, provide a good working environment, and make sure their workers are paid well—and paid accurately.
The construction boom might mean you don't have to compete for contracts, but you do need to compete for talent. If your employees don't trust you to take care of them, they can easily move on to the next company down the street. It's more important than ever to have systems in place that ensure everyone is being paid correctly.
Increasing Violation Claims
As competition for talent heats up, so will wage violation claims. This isn't anything new—the Department of Labor has targeted construction companies for years. But what is new is the cottage industry of lawyers who go to job sites looking for opportunities to sue.
These lawyers ask your workers questions about your company to see if there's an opportunity to make a claim against you. They conduct interviews on the spot asking your workers if they feel that they're being taken care of. If not, there's talk about filing a suit. According to CPAs at the summit, the average wage violation claim starts at $1m.
The Government will also continue to crack down on construction companies, calling it "wage theft" instead of wage violations. In this case, the general contractor can be personally liable for fines.
Right now, contractors have as much work as they can handle, which gives you the freedom to be choosy about the jobs you take. Many construction companies prefer residential jobs over government contract or a project that uses union employees.
But strategic companies are looking ahead. They realize this boom won't last, and eventually there will be a need to pursue government and union work. If infrastructure bills make it out of Washington, D.C., there would be a significant government money up for grabs. That shift will bring a whole new set of issues to figure out—including how to stay compliant and also make a profit. You don't want to spend $10 just to make $9.
Many companies are leery of pursuing government contracts, due to compliance concerns. Those jobs are good money, but they come with strings attached, and with added complexity. Without a system to help you efficiently and accurately stay in compliance, you could be throwing away your profits.
Strategic contractors are using this peak time to prepare for the valley.
Need for Tech
2019 will see an increase in technology at the job site. The Acumatica Summit featured drone demos, "mixed reality" goggles and new voice technologies. Acumatica has created the first Alexa-for-business service that lets you query your work orders, project status, sales opportunities and more.
More contracting companies are adopting cloud technology and other advanced tech. Some are starting to use drones to assess the status of a job. Others are employing biometrics to confirm employee attendance on-site.
Will your company be more mobile this year? If so, you don't want tech that ties you to the ground. If you're looking into cloud services this year, IDI's Contractor Central is already there. Not ready to let go of all your premise-based solutions? No problem. We integrate with both cloud and locally hosted systems.
Contractor Central is built to handle the coming challenges and trends in the construction industry. Protect your payroll, keep your company compliant and get into the cloud.
Check out this quick video to learn more!