The construction industry is poised to stabilize this year, after several years of fighting pandemic-related challenges, such as the ongoing labour shortage, job safety issues and rising costs. Rise above the rest through strong, organization-wide programs, including:
1. Personalized Benefits
With an existing labour shortage and approximately one in five construction workers expected to retire in the coming years, the construction industry is struggling with recruitment and retention.
Employee benefits and health and safety initiatives are now more important than ever. In fact, with some experts suggesting that the number of workplace related deaths and injuries are 10 times higher than what was reported, chemical companies will need to step up their focus on health and safety – especially as exposure to chemicals is a prime cause for concern.
With experienced employees leaving the workforce, firms will need to step up. Forward-thinking organizations will identify and address safety concerns before work begins through comprehensive training programs.
In addition, many construction companies are offering a broad range of employee benefits and financial incentives to attract new workers. Firms that develop a comprehensive benefits strategy based on personalization will create a quality employee experience (QEX) that enhances engagement, boosts recruitment and retention and improves overall employee wellbeing.
2. Risk Management
It would be impossible to eliminate all risk, especially in an industry rife with issues beyond your control. For example, the rise in catastrophic weather has impacted nearly half of construction projects around the world.
In Canada, with inflation still sitting above 3%, costs are expected to remain high in 2024. Construction insurance is becoming more expensive, and those firms working on large-scale projects may notice even higher rates.
Organizations will need to review their risk management programs to secure competitive rates. Those that can demonstrate they have policies and procedures in place to protect against chemical spills and other claims will be more successful in securing appropriate protections. Brokers and advisors can help by identifying potential issues and determining appropriate levels of coverage.
3. Technology Solutions
Although the construction industry has been slow to embrace change, construction firms are investing in data analytics, artificial intelligence, and telematics to increase safety and improve efficiency. Organizations with increased risk are relying on technology solutions to maintain safety information and monitor exposures.
Yet these solutions also come with greater risk for cyberattacks. Cyber insurance is expected to rise less than 10% in 2024 – less than in previous years – but a rise in claims could push rates up even higher.
Firms that take proactive steps to reduce cyber risk – such as multifactor authentication, comprehensive backup strategy, and cybersecurity training and protocols – will be better able to secure coverage. An expert broker can provide insight into assessing emerging risks and the best strategies for mitigating exposures.
Plan for Success
In 2024, consider these tips to strengthen your entire organization:
Create a comprehensive plan. Every organization needs risk management, but construction companies need it more than most. With so many things that can go wrong, it’s critical to identify exposures and plan the right response ahead of time.
Introduce personalized benefits. With so many employers and a shortage of labour, standing out is critical. Organizations that allow employees to personalize their own benefits not only increase engagement, but also encourage employee wellbeing and improve recruitment and retention.
Focus on workplace safety. Injuries can multiply with the number of new hires. Be sure to review safety policies regularly and clarify as needed. A risk professional can help.
Rely on your broker. Your broker is on your side – but only if you allow it. Review exposures and coverage needs at least 90 days ahead of policy renewal to allow time to assess options. In addition, make sure to share details about upcoming business changes and opportunities.
About the author
Simon J. Fenn, CIP, is Senior Vice President at global Top 5 insurance brokerage Hub International. He has more than 44 years of risk management and insurance experience in the world’s top insurance brokerages, companies and reinsurance companies. Simon was Senior Vice President and National Construction Practice Leader at Canada’s largest insurance brokerage for five years, before establishing Fenn & Fenn Insurance Practice Inc. in 2003 (aquired by Hub in 2022). His experience with international brokerages includes a wide array of construction projects including nuclear plants, as well as representing the largest General Contractors in Canada. Today he continues his role as a member of the HUB International National Construction Specialty. Simon holds a Chartered Insurance Professional degree with the Insurance Institute of Canada (Ontario).