Every construction business owner and project manager is aware that the industry carries an immense amount of risk. OSHA reports that during the past year, over 20 percent of worker deaths in private industries occurred at construction organizations. In addition to protecting employee safety and well-being, construction project managers must be empowered to protect their organizations from a variety of risk factors.
Preparation, education and a proactive attitude can be key to protecting your organization, team and project portfolio from falling prey to risks. Join us as we review five must-have construction risk management tips to help you protect your company.
1. Educate Yourself on Risks
There’s no shortage of things that can go wrong on a construction project. From worker safety to client happiness, it’s critical for project managers to take a comprehensive view of risks and understand what each category can entail. Capterra writes that risks in the construction industry are commonly categorized as:
- Natural Disaster
2. Have a Construction Risk Management Plan
Planning for a problem-free project in construction isn’t simple. Projects are often moving targets, and potential issues can change rapidly. However, Risk Management recommends that you view the “construction contract as the bedrock of risk management.” By ensuring your contract is designed to mitigate risks, you can ensure that you are able to plan adequately and purchase sufficient insurance coverage.
3. Be Proactive
You should plan for risks before issues arise. Proactive efforts can be more effective than reactive attempts to fix your project timeline or budget. Ideally, this effort should begin during your project planning phases. At some organizations, a proactive approach to risk management requires a drastic shift in thinking.
4. Challenge Assumptions
Assumptions and guess-work are the enemy of effective risk management. “Assumptions” can be untrue, which can lead to major problems and vulnerability. Develop a culture of challenging assumptions, asking questions and carefully thinking things through.
5. Make it a Company-Wide Effort
Your efforts to build risk into your processes are important, but may not be as effective as a company-wide initiative. Your leadership team can’t be everywhere at all times. Empower your team to observe, monitor and report risks immediately to ensure you’re never surprised when something doesn’t go quite as planned.
Risk is a natural part of the construction industry, but it doesn’t need to cut into your potential for profitability and a strong reputation. By becoming educated on construction risk management, your company can be better prepared for the worst-case scenarios.