Last month I was chatting on Skype with a very good friend of mine who works as an executive for the Cumby Group, a high level construction company. I made the comment to my friend that there will be more business and more money-making opportunities for his firm, given that so many smaller companies had been forced to close their doors for good. Now the Cumby Group is a big operation and whilst they have certainly had their fair share of pain in the last 12 months, there is no doubt that they will be alright, and will be able to continue operations.
I was quickly corrected by my friend, who actually spoke worryingly about the risk that these closures has on the industry as a whole.
Loss of Talent
The result of so many businesses which worked in the construction industry closing, is that there are now much higher levels of competition for jobs. Let’s say that you need an electrician for a big project, you will now have 5 options to every 1 that you would have had in the past, which seems like it is a positive. Unfortunately however it will not be long before some of those 5, get sick of applying for jobs which they are unable to get, and eventually they will look elsewhere for work, and may even switch careers. This will result in a loss of talent in the industry which will certainly hurt many companies.
Construction is already a highly demanding industry and those who pay for projects want the job done perfectly and with haste, a common gripe of those who work within the construction sector. This, my friend worries, will only get worse in the coming months and years because there are going to be less companies available to carry out the work. The result of this will be a more demanding client who needs jobs done yesterday, before moving on to the next one. Ultimately some more companies in the construction sector could buckle under the pressure of bigger projects and less companies to support.
Using The Smaller Firms
Something which I had never considered until speaking with Paul, was just how heavily companies like the Cumby Group rely on those smaller firms to get the job done. This type of group will take on the project and help to manage the client and they will then utilize up to 7 or 8 different companies to deliver on the construction project. When you consider the construction site you are talking about plasterers, window glazers, bricklayers, project managers, electricians, plumbers and gas fitters to name just a few, these are all recruited from smaller firms and without these firms being in existence, it poses quite the headache for the company which is heading up the project.
As you can see, what may appear to be a benefit on the face of it, is in fact bad for everyone involved.
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