People, usually those in the business for a while, often ask me what’s been happening to the construction industry. There seems to be a bewilderment among the old-timers and experienced contractors. I can attest to the same problems they have. The quality is going downhill, everything’s getting expensive, and nobody seems to be doing anything about it. It’s tough to describe succinctly, but let me try.
It starts in the finances and continues to the workers
The vast majority of developers today have a financial background. Most of their staff have business degrees with MBA’s or other various certifications. You’ve got to realize that Millennials didn’t grow up with hard labor or valuing hard work. Most value education beyond everything else. Now that the business is filled with MBA’s, it creates a culture not of quality or construction fundamentals, but of portfolio theories.
This culture permeates into nasty habits that are plaguing the industry. The mentality that if it passes a city inspection it’s quality work. Who cares if it’s not quite right? Most of the developments are sold shortly after they are built, so it’s the next guys problem. The incessant drive to push price down creates worse plans, breeds more careless work, and finds ways to sneak around quality. I personally know individuals that manage multi-million dollar development portfolios that fundamentally do not understand the process of building something big. Even worse, they’d rather just purchase things because development is too much work.
On the ground this mentality becomes more evident. New workers are inexperienced and largely don’t want to do the long hours and tough labor of their parent’s generation. I struggle with this developing my own projects. It’s tough to find good laborers nowadays. Even the smaller contractors are taking a different approach. They used to be the hardest working guys of a group who took the extra step to develop a company. Now, they often are middle-men trying to take a cut of other people’s work. At some point the market has to cut out the paper pushers and get back to laboring.
What happens in estimating
We take a very different approach when estimating projects. Most GC’s are doing general estimates, sending it to subs to bid, and trying to receive lump sum costing. The question we receive the most is “can you give accurate pricing?” It’s the wrong approach. The market has a general price for just about every trade you can imagine. Price differences don’t come about because one company is charging 30% more for the same work than another. They occur because they didn’t properly quantify the job in front of them.
Our estimators takeoff the project down to the smallest of material details. We quantify and narrow the scope of work so that estimates coming in are more exact. It’s far easier to compare bids when quantities are known beforehand. We find that our clients have lower variance in initial estimates. Contractors start to gravitate towards the true cost. For our subcontractors, our estimates are an excellent reference to get to the right number and an even better reference to show the project managers that you mean business. It’s not a number on a board anymore, but a full sheet that shows every detail.
Let’s get back to the virtue of working hard. It starts with our estimates. You can expect high quality hard work from us. We hope that fits your company.
