Types of Risk in Construction Projects and How to Mitigate Them

SINC Workforce : No. 1 In Construction Management Software

This guide takes you through some of the common risks associated with construction projects, along with how you can identify, manage, and mitigate them to make your construction projects more efficient and timely.

Risk in construction projects and how to overcomes from it

1. Safety and unsafe work conditions

Safety is a major concern in construction projects. When a contractor pushes workers to complete the work quickly and cheaply, safety measures and precautions may get overlooked. 

Several reasons can cause safety hazards on a construction site, such as:

• Lack of fall protection for workers
• Lack of protection for people from falling objects
• Unsafe equipment and property conditions
• Miscommunications and language obstacles
• Lack of safety precautions for workers working near power lines

While the causes of accidents at construction sites can vary, it is the responsibility of the project manager and the developer to ensure the safety of the workers. A quick way to alleviate the safety risk in construction projects is by establishing safe work conditions for employees.

This includes providing them with the proper gear, training them properly to avoid communication issues, and ensuring the proper and safe functioning of dangerous equipment. It is also critical to promptly investigate any constriction accident and identify its cause to make sure such incidents can be eliminated in the future. 

2. Worker issues

Construction projects are labor-intensive. A 1998 report suggested that there are more than 110 million construction laborers in the world. And still, a shortage of labor is a significant Risk in Construction Projects. Regardless of how good is the design or architecture of a building, if the developer does not have the right labor to execute the construction, the project will not be completed.

Another major hurdle with construction workers is the lack of quality and productivity. The times have changed, and now, construction laborers need to do more than just placing bricks over bricks. Technology has made its way to construction, and construction companies need workers who have the skills required to pull-off modern-day construction tasks. 

Contractors can mitigate this Risk in Construction Projects by conducting proper background checks and interviews before hiring construction laborers. In addition, project managers can also use project management software to track and manage the performance and productivity of their laborers. 

3. Lack of coordination

As discussed before, miscommunication can lead to Risk in Construction Projects. If a construction site has employed workers from different countries and regions, language hurdles can arise, which can lead to inefficient communication between workers and contractors.

Coordination issues can occur even if the entire team speaks the same language. Construction projects deploy a hierarchal structure, where the instructions flow from the developer to the project manager, from the project manager to the contractor, and from the contractor to the laborers. 

For instance, if the need for installing electricity cables arises but is not communicated in time, the construction process may not proceed as per the scheduled plan. 

To avoid such risk in construction projects, there needs to be strong management that ensures all the teams and laborers working on the project are on the same page. If required, project managers can also use task management or construction software to track and manage the progress of the project. 

4. Inaccurate documentation

A typical construction project requires a copious amount of documentation: legal documents, material reports, laborer information, and whatnot. Construction project managers need to manage documented data for the preconstruction process, construction phase, and project closeout. 

Construction companies using paper-based document management are likely to face risk in construction projects. Piling up papers will not only make it challenging to locate critical documents but will make the process more time-consuming, inaccurate, and less productive. 

To reduce this risk in construction projects, contractors and project managers need to use dedicated software solutions that enable them to store, manage, and organize critical documents related to the construction project. Using document management software allows you to save your documents in various formats, make multiple copies for them, and find the desired information in a matter of seconds. 

5. Reporting errors

Construction projects are sensitive, and even a minuscule delay or error in reporting can affect the budget and timeline of the project. For instance, let’s assume you are a contractor, and you notice that a team of laborers working on the electrical installation has met with an accident, which will delay the project timeline and add to the overhead costs. 

If you fail to report this to the project manager in time, the entire construction project can get delayed for hours or even days. Such instances of inconsistent reporting are common in projects where paper-based systems are used for tracking and reporting the progress of a project. 

To alleviate this risk in construction projects, project managers need to adopt a more streamlined solution for submitting field reports. Mobile construction software can help facilitate timely field reporting and reduce the risk of human error.

Besides, certain solutions allow ou to report problems in a timely and accurate manner by sharing visual information like photos and videos to provide in-depth information about the problem. Project managers can then analyze these issues in detail, and if required, can propose a new timeline and budget for the project. 

6. Disputes

Disputes in construction projects are common. While some of them can be easily resolved, some conflicts can severely affect finances and schedules associated with the project. Some common disputes that can lead to risk in construction projects are:

• Differing site conditions
• Contract errors or omissions
• Claims error
• Payment issues
• Poor work quality
• Failure to properly administer the contract
• Noncompliance of contract-related obligations

A sustainable way to reduce the dispute risk in construction projects is to appoint strong management and document everything from the beginning. Implementing technology throughout the construction lifestyle, such as Building Information Modeling (BIM) can improve the documentation process and eliminate any possible disputes. 

Even if you don’t use technology, discrepancies and conflicts can be reduced by streamlining all processes and ensuring all the contractors and managers are on the same page. Conducting regular meetings and discussing the progress, impediments, and short-term goals of a project can go a long way in eliminating disputes and making the construction process more efficient and timely. 

Final thoughts

The key to effectively managing risk in construction projects is to establish a high level of consistent collaboration and communication between all parties involved. Project managers need to ensure everyone is on the same page and working towards the same objective. 

Using mobile construction software can help in streamlining and automating the tracking and reporting of a project’s progress, thereby alleviating risks and increasing consistency across all teams. 

Are you looking to avoid the risk of construction projects?

SoftwareSuggest’s expert, industry-specific recommendations can help you select the best tools and technologies to manage your construction projects.