Industry Insights from a Construction Leader
Willis Towers Watson’s history with the construction industry stretches more than 50 years in North America. During that time, the company has been involved in some of the world’s most iconic projects and, for the last 30, has partnered with AGC of America on its Construction Safety Excellence Awards program. Earlier this year at the association’s annual convention in Las Vegas, Jeanie Clapp, Constructor’s editor-in chief, sat down with Bill Creedon, global head of construction, and Paul R. Becker, CPCU, ARM, director, global construction, to talk about the industry, its trends and the current challenges facing commercial contractors.
Q: AGC OF AMERICA AND WILLIS TOWERS WATSON HAVE COLLABORATED ON THE CONSTRUCTION EXCELLENCE SAFETY AWARDS FOR MANY YEARS NOW. HOW HAVE YOU SEEN THIS PROGRAM IMPACT SAFETY OVERALL FOR THE CONSTRUCTION INDUSTRY?
A: This safety program drives excellence by sharing best practices and lessons learned — not just with the AGC membership, but with the entire construction industry. People attend the judging and the awards banquet and say, “We are going to bring that back to our shop and implement it.” That’s been a really big impact on the industry. And we are proud to have been a part of it.
What’s also been great to see over the years is increased engagement from senior management. It used to be safety managers/safety personnel only, but now CEOs come to present their case. They are given only five minutes to pitch why they should be considered the best contractor from a safety standpoint, five minutes to articulate why they believe their program stands out from others, five minutes to field some difficult questions.
Q: SINCE THE AGC CONFERENCE, WE HAVE SEEN THE INDUSTRY AND THE WORLD IMPACTED BY COVID-19. AS THINGS START TO OPEN BACK UP TO A NEW NORMAL, WHAT DO YOU SEE AS SOME PRIORITIES FOR THE INDUSTRY?
A: As we have seen, the discussion around the impacts of and responses to COVID-19 could be the content for multiple articles on its own! Recognizing that, we feel an area that is going to be first and foremost for everyone will be to create the safest jobsites for workers. Similar to other true industry issues that are addressed by the AGC and its members, you are seeing an incredible level of sharing of best practices that are intended to help protect everyone involved in a project and it goes beyond an individual company or brand. We are seeing various ad-hoc groups created to help drive innovation and sharing and asking for input from any sector to create the safest worksite possible. We anticipate you will see many other sectors responding to this call to arms to partner with contractors as they have throughout history such as new technology offerings, insurance and risk management expertise, healthcare and many more. We all want to keep building, but more importantly, we want all the workers to go home to their families safe and with confidence they are being protected as well as possible.
Q: HAVE YOU SEEN ANY CHANGES IN MENTAL HEALTH ISSUES IN CONSTRUCTION SINCE WE SPOKE LAST YEAR?
A: More people are talking about the importance of mental health now and recognize that the well being of the labor force must be addressed and improved. The industry is in relative crisis as evidenced by alarming statistics: The average suicide rate is approximately 14 per 100,000 – in construction it’s 53. With seven million people in the industry, that equates to about 3,500 lives a year. Three thousand, seven hundred members of the construction family pass away each year due to suicide. We want to help educate people beyond just awareness and give them tools to help themselves
And in light of the pandemic, the construction industry’s tenacity is once again being tested. We need to support and encourage each other. During this pause, as we rely on the best of our scientific and medical community, we are given an opportunity to reflect and step forward with ingenuity, resolve and renewed sense of purpose. We are all facing never before experienced challenges.
Traditional risk control efforts in the construction industry focus primarily on physical loss. By applying that same rigor to psychological safety, we can create a culture and environment that protects and supports the mental wellness of all employees. Willis Towers Watson has partnered with Suicide Awareness Voices of Education (SAVE), developing a state-of-the-art program, integrating mental health and suicide prevention training into all key company functions of the construction industry workplace.
Q: THE INSURANCE MARKET HAS CHANGED DRAMATICALLY IN THE LAST YEAR. HOW HAVE THESE CHANGES IMPACTED CONTRACTORS, BEYOND PREMIUMS?
A: It’s important now more than ever for contractors to be proactive, strategic and willing to tell their story. Gone are the days when a contractor can say, “I’ve got an agent, I’ve got a broker, just bring me my program, renew it and send it on.” With everything in the marketplace, agents and brokers are advising their clients to make themselves available to help tell their stories to markets who are considering their risk.
We’re also seeing that turbulence creates innovation. Contractors are looking at different ideas for handling coverages that in the regular marketplace may be too much to handle or simply not being offered. What’s also an adjustment is the level of detail needed now by the various markets. You need every question answered, signed off and submitted. And, that takes more work and a lot of time on the part of the contractors and their risk partners.
Q: IT SEEMS LIKE TECHNOLOGY IS IMPACTING THE CONSTRUCTION INDUSTRY SIGNIFICANTLY AND RAPIDLY. WHAT DO YOU SEE AS THE MAJOR EFFECTS TO CONTRACTORS?
A: This cuts both ways. Risk and insurance professionals need to bring new ways of managing and financing risks that may change due to COVID-19 and the economic impacts. The insurance industry needs to be able to correlate the data that it has to bring insight to contractors that informs them across their businesses from worker safety to quality to protection of the jobs themselves. Insurance has not unlocked its data to this point to really drive change in how contractors need to build to reduce risks across many parts of the process.
From a construction standpoint, innovation will accelerate as contractors and owners look for ways to work with proper distancing on the jobsite. This could lead to even more off-site prefabricated work, enhanced use of on-the-job technology for scheduling (even deeper use of BIM-type processes to anticipate trade conflicts on schedule, to alternative delivery including IPD and Design Build. In addition, use of on-the-job sensors, real time technology to anticipate safety issues, broader health screenings of workers in real time all could be normal on all jobs going forward.
Q: INFRASTRUCTURE SPENDING WILL UNDOUBTEDLY BE A HOT TOPIC THIS YEAR. HOW CAN CONTRACTORS BEST PREPARE THEMSELVES FOR THE UNCERTAINTY THAT LIES AHEAD?
A: There’s a lot of uncertainty right now, given COVID-19. Some projects have slowed down; others in the pipeline have been put on hold but for the most part, active projects have kept moving. What’s not going to slow down is the need for infrastructure both new projects and updating/retrofitting of existing infrastructure.
But how we live our lives is changing as is the environment we live. What happens when autonomous vehicles come along? How are we going to build roads differently? How are we going to finance those roads? Also, how is climate change impacting our transportation infrastructure from both a longevity and construction standpoint? There’s a lot to figure out, and the government will need to have a critical role in sorting through the complexities.
And during an election year, infrastructure is a very popular topic. Unfortunately, everybody sees a need, but personalities get in the way and it is harder to achieve a consensus on important directional matters.
As for the economy, we’ve been talking about the building industry being strong for years now. As we look at a potential slowdown arising from the impacts of COVID-19 to the economy and the myriad of other changes to how we will need to work, it is very difficult to predict what the next year and beyond have in store. You hear from everyone how we are in uncharted waters or unprecedented times which all seems very accurate. So if you’re a contractor who lived through ‘08 and ’09, you probably said, “I’d do things differently if I knew then what I know now.” Well, now’s your chance to do things differently. Gather your crew and ask some key questions. “How’s our position going into a potentially turbulent time? What do our crews look like? How is our labor force set up? What projects do we work on?” It’s time to reassess and take care of your core. Develop or dust off your contingency plans.
Q: CONSTRUCTION INDUSTRY HAS CHANGED WITH THE TIMES AS MOST INDUSTRIES. WHAT DO YOU THINK WILL STAY CONSTANT?
A: These folks come together and act like family. That’s the one constant I’ve seen and I am confident will not go away