Contract documents

July 11, 2024

When the economy nosedives, the impact is felt across all parts of a business. Finances are the first area to feel the pain as lower revenues and profits lead to the flattening of corporate wallets. During those volatile economic times, leaders hold their purse strings, cutting costs wherever possible and doing whatever is necessary to weather the fiscal storm until the day brightens. Businesses aren’t the only ones whose behavior changes during tough economic times; employees also change.

Employees aren’t blind or oblivious to the obstacles caused by a challenging economy. They read the tea leaves, hear the whispers, see the comings and goings of colleagues, and invariably begin looking for ways to secure their future. With so much at stake, employees and corporations stand to suffer significant losses. Corporations lose valuable employees who are a major part of their brand and service model, while employees sacrifice job security and the ability to cultivate valuable career opportunities. But here’s the reality: Bad economic conditions don’t always have to result in a loss.

The economy is cyclical by nature, and difficult times are bound to occur, but by applying the following steps, both parties can come out on the winning side.

• Lead with technology: The construction industry is embracing technology more than ever, with drones, electric vehicles, and virtual reality leading the way. Adopting these innovations improves workflows and efficiency, and they can also be used as strategic marketing tools to attract and retain top-tier talents. This is especially true when targeting millennials, as so much of their lives revolves around technology in some form or fashion.
• Higher wages: Money talks in a lot of professions and that includes construction where, even with the infusion of technology, hard work, which can often be hazardous, is still the name of the game. If you’re looking to keep your staff amid a challenging economy where quality work can be a differentiator, consider raising their pay.
• Make safety a priority: Construction is a rewarding career, but it also comes with its fair share of challenges, chief among them being safety. Sites are usually loud with people and pieces moving all about, and a simple mishap could lead to a serious injury or worse. One way to keep your staff intact during an economic downturn is by making sure they know they’re valued, and emphasizing safety is a surefire strategy.
• Focus on the work environment: One of the most often overlooked reasons employees leave a job is the work environment. Everyone wants to be in a workplace that embraces and welcomes them, regardless of the nature of their work, and construction professionals are no different. Even with the inherent dangers of the field, employers must work to build a culture where the benefits – growth, communication, training programs, and safety, outweigh the hazards.

Conclusion

The economy ebbs and flows, but even during those movements, no matter when or how they occur, construction firms and the professionals that support them can remain stable. Historically, employees face the brunt of the hard times. Employers also feel the consequence, most likely in staff and financial losses. The good news is that both parties can come out on the other side with their relationship intact, and it begins with the employer taking action to lessen the impact.

Marketing isn’t just for customers; it should also focus on current and prospective employees. Technology should be the core of those efforts, as it appeals to new talent and serves as an excellent strategy to retain current employees. For employers looking to maintain their staff, increasing wages is another way to keep staff content and in place during periods of fiscal turbulence. A heavy emphasis must go into building a healthy, safe environment for workers while offering a sense of belonging and recognizable value. Twists, turns, ups, and downs happen in the economy, but investing in strategic initiatives ensures firms and the employees powering them remain standing until the storm passes.

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AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.