The construction industry has faced a number of challenges in its history, from economic downturns to Brexit, but now it faces something completely new: COVID-19. Initially uncovered in China and making its way across over 180 countries and territories, the novel Coronavirus is affecting the lives of billions, and its repercussions are being felt in every sector.
So what can those in the construction industry do to help their employees and clients keep moving during these turbulent times? Here we have laid out some top tips to get your business through the pandemic and out the other side.
Communication is Key
One of the best things you can do is make sure that everyone is on the same page. In a climate where everything is constantly changing, it can be hard to predict what tomorrow will bring, so keeping employees, contractors and clients informed of any changes to projects or schedules will ensure that everyone can work towards the same goals. Should you need to push back any deadlines or rearrange any meetings, give as much notice as possible – everyone is in the same boat here, and the best way through is to help each other.
At the time of writing there has been very little impact on the construction supply chain as a result of the pandemic, but that does not mean that there won’t be. While there are too many questions to be answered around possible lock-downs in the UK, it doesn’t mean that you can’t be prepared. Make sure that you are keeping in touch with your suppliers; you might find specialist contractor software useful in this unique situation as travel becomes ever-more out of the question.
Take Care of your Workforce
Your staff are your most valuable resource, and your primary duty in a pandemic is to look after them. If you have the infrastructure, allow them to work from home where possible and make sure they only travel to essential meetings – video conferencing should replace face-to-face meetings where possible.
For those who are unable to work from home, hygiene will be of the utmost importance. Make sure you have hand-washing facilities and soap on sites and in offices, and keep monitoring advice from the government. It could also be worth splitting teams to avoid everyone coming down with the Coronavirus at the same time, and cross-training your employees in other roles will help in closing gaps should anyone be self-isolating or ill.
Pay is probably quite high on your employees’ list of concerns at the moment, and understandably so. Your payroll and accounts departments are business-critical and should be protected as a result. While the government has promised that it can cover 80% of the salary of anyone who needs to be temporarily laid off, financial protections over self-employed staff, who make up 37% of jobs in the industry, are still unclear. Nonetheless, anyone who is advised to self-isolate should still continue to receive their usual pay.
With all of this uncertainty, it’s no wonder that contractors are becoming increasingly concerned about contracts. It would be worth checking your current contracts for any clauses that relate to government intervention and force majeure. While the government is still discussing force majeure, if it is found that the current pandemic counts, contractors must then establish that COVID-19 is the cause of any delays; without this, there can be no claim for extensions. If you cannot find anything in a contract, try reaching out to the client and have a conversation about altering it so that you know you are covered.
The finances of companies all around the world are likely to see a hit as a result of the pandemic, and those in the construction industry are no different. With fluctuations in staff availability and ever-changing advice, it is important that you keep abreast of help and support that is being offered by the British and devolved governments.
On 17 March, Chancellor Rishi Sunak announced £330bn in loans for companies impacted by COVID-19, intended to help businesses pay rent, salaries and suppliers. With no interest for the first six months, they are to be made available at high street banks very soon. The IR35 tax reforms have also been postponed until next year, providing welcome relief to many.
Regional governments have set up their own packages; Scotland has put aside £2.2bn for businesses in the form of 10,000 grants and 1.6% relief for all properties. Meanwhile in Wales, a figure of £1.4bn includes a £10,000 grant to all businesses eligible for Small Business Rates Relief with a rateable value of £12,000 or less.
If you have to defer any tax payments, make sure to call HMRC to discuss arrangements, and liaise with funders and banks to secure sufficient credit.
It can be hard to plan for the future when it’s hard to see what it will entail. While some sources claim this will all be over in a few months and others say it’s more likely to be next year, it is impossible to put a date on when life and the economy will be back to normal. In a bid to start getting on the right track, organisations like the Construction Leadership Council, the Federation of Master Builders and the Association for Consultancy & Engineering have written to the prime minister, asking for more investment in the construction sector and calling for:
- The government to ensure that all construction sites in the UK are able to remain open for as long as they responsibly can
- The implementation of financial measures, like the deferral of VAT and PAYE payments, to keep cash moving
- Tax incentives for the house-building sector
- Investment in future consultancy demonstrator projects
- Wider funding of R&D and innovation
This could also be the time that the future of the industry is really considered. Could breakthroughs be made in virtual reality? Could processes be streamlined and productivity improved? The CITB has confirmed that it will help to protect skills during the pandemic so that British construction companies can play leading roles when life returns to normal, so while uncertainty rages, businesses can see a light at the end of the tunnel.
With everything up in the air, staying grounded and informed will instantly find you in a better position. Use the help that is provided, take care of your staff, and keep looking forwards – this period will pass, and then the country can look to rebuilding.