Job Site Safety: Commercial Construction Index 2018 Q3 | Construction Podcast

The Commercial Construction Index tracks construction market trends throughout the industry. Listen to “A Podcast That Builds” host Ben Johnson and Dodge’s Industry Insights Research Director Donna Laquidara-Carr discuss the findings from the 2018 Q3 CCI Report, including insights into the current state of safety in the construction industry. Listen to the podcast for information on the impact of the construction labor shortage, opioid use and new construction technology on job site safety. Below is a transcript of this construction podcast.

 

Ben Johnson:    

Welcome to “A Podcast That Builds”, construction industry experts keeping you in the know with news, trends and analysis that will shape the future of building. So, our topic for this episode is job site safety and specifically the spotlight article in this quarter's CCI report, the author of which we have joining us here today, Donna Laquidara-Carr. Welcome, Donna.

 

Donna Laquidara-Carr:  

Thank you very much. It's a pleasure to be here.

 

Ben Johnson:    

Firstly, let's just remind our listeners what the CCI is.

 

Donna Laquidara-Carr:  

All right. So, every quarter we have agreed to bow start again every quarter we surveyed GC's and trade contractors to bring out a publication that's actually published by the US Chamber of Commerce and USG. And it's about how contractors feel about their business. We survey them about a lot of different topics that are specifically focused on their business, including revenue backlog, their confidence in being able to secure new business profit margin, access to financing, concerns about labor shortages, all of those business-related issues. However, we made sure we leave a little bit of room on every survey to look at key topics and trends that we think are important or transformative in the industry.

 

Ben Johnson:    

So, this quarter you chose safety. Why, why choose that topic?

 

Donna Laquidara-Carr:  

Well, there's always been a perennial concern about job site safety in the construction industry, but there's definitely new challenges that are emerging in the last few years. And we wanted to understand the impacts of some of those challenges. So, we were looking specifically, not surprisingly at workforce shortages, given the fact that our own CCI reports have indicated the depth and consistency of work of skilled workforce shortages for a while. There's another side thing to that that we also looked at in this. One aspect of workforce shortages is that fewer people are entering the construction industry. So therefore, the average age of the workforce is much higher. So, we looked at whether contractors thought that the aging workforce was any more of a risk in terms of their job site safety. Another thing that we see as a real marker of construction these days is shorter schedules.

Contractors are constantly telling us that they have to do work in a shorter and shorter frame of time. And that it creates major challenges for their business. And we wanted to see if one of those challenges with safety increased risk and safety. Finally, substance abuse, the opioid crisis is really recognized as an epidemic in the U.S. and while used only here recreational marijuana is legal in nine states, medical marijuana is legal in 30 states. So, we wanted to see, you know, given the high profile of these issues in our culture in general, how contractors are responding them to them specifically when it comes to job site safety.

 

Ben Johnson:    

So, when it comes to job site safety, which of these issues are contractors most concerned about?

 

Donna Laquidara-Carr:  

Well, to get at that question about what they're most concerned about, we asked them about their top concerns and we really limited to how they can only select one or two. So, when you really put that kind of limitation on the construction labor shortage, the skilled labor shortage, those rise to the top. And we asked that question not only about now, but about three years from now, what they're anticipating being their biggest problems. And we see that issue grow too. So, 58% now say it's a big issue, 62% say it's going to be a big issue in the next three years. The shorter construction schedules also a huge safety risk recognized by most contractors. Nearly half say that it's a top factor now. Where we see the biggest growth though between now and three years I was with the aging workforce and addiction issues, aging workforce we see 32% now say, yeah, this is really we think a top safety issue, but by three years, 38% think it will be. And addiction issues, we see 29, 22% now saying this is a big issue, but 28% in three years.

 

Ben Johnson:    

So, I find myself wondering if there, is there a split between GC's and trade contractors in terms of what they are concerned about safety wise?

 

Donna Laquidara-Carr:  

The only place where we saw that really emerge is with the lack of skilled workers. A GC's are actually more concerned about the safety risks that are posed by that than the trades are 68% of the GC's stay. They're concerned about it compared to 45% of the trades. It really is a substantial difference. The same gap actually does land up holding true for three years. Two. So, it's, you know, this concern that GC's in particular have that job site safety is declining due to the lack of skills and some of the workers is really is really a big issue for them.

 

Ben Johnson:    

So, we know that these are the ones they pick as the top risks from, from the list that you provided, but does your data show how concerned they actually are about these issues?

 

Donna Laquidara-Carr:  

Well, due to space concerns, you know, you can only ask people so many questions on a survey. So, we weren't able to follow up on every single issue the way we really would have preferred to. But here's what we do know about that. When we ask contractors to rate their level of concern about how the skilled labor shortage is impacting safety on their projects, 80% said that they had at least a moderate level of concern. Okay. This is really something that the industry is struggling with clearly. We had a similar rating question when we asked about the substances, marijuana, alcohol and opioids, and you see over half or at least moderately concerned about marijuana and alcohol and over 70% are concerned at that moderate or higher level about opioids. Now we, like I said, we didn't have time to study all the items, but remember that among the list, I kind of called out in the last question that the marijuana, the substance abuse issues were only, you know, about 12, 28% said it was a top concern for them. So, but we see that really a high percentage of them are concerned about these issues. So, when they're weighing these troubles against each other, these risks against each other, certain things emerge at the top. But in fact, there seems to be a pretty high level of concern about most of them. And I'm sure that applies to the things that actually rated higher than substance abuse on the last question, like the aging workforce.

 

Ben Johnson:    

So, the CCI data has demonstrated that a skilled worker shortage has become sort of a new normal for contractors now, but do we know what they're doing to deal with the issues specifically?

 

Donna Laquidara-Carr:  

Well, we did try to poke at that a little bit. We gave them a list of strategies that we're familiar with that can help contractors reduce safety risks. We asked them to say, okay, when you're thinking about specifically the risks that are created by the construction labor shortage, what are you using to reduce your safety risks on site? And 63% said that they're improving the safety climate on their job sites. 58% said they're improving the safety culture at their firms. Almost half 48% are providing leadership training to supervisors on site and about one third are tracking and assessing safety records and using construction site safety enhancing technologies.

 

Ben Johnson:    

So, you've mentioned the safety climate and safety culture. What is the difference between those two?

 

Donna Laquidara-Carr:  

Okay, so a safety culture is literally what it sounds like. It's a culture that permeates the company. We're improving. Safety underlies all the decisions at all levels of the company. It's really about mindset more than anything else. And really having safety just as a core value at your company. Safety climate is what's going on at the specific job site. It's where safety is clearly recognized as a priority on a specific job site. Any key difference between the two of them is that, you know, a company could have some job sites with a really great safety climate and some where the safety climate is lacking. But you know, if you have a good safety culture that does permeate your whole or organization. And what's really interesting when you look at those two things in particular as emerging at the top of this, of this list of strategies to deal with a skilled worker shortage and how they impact safety, we see that contractors are really trying more holistic approaches to deal with the skills that are missing.

You know, it's not just that we gave them a list and these more holistic skills were the only things that appealed to them of the list we happened to provide. In fact, we had a very low response rate of those who wrote in another option, because we always give on this kind of question and other option where you can say, you know, I don't agree I'm not doing any of this but I'm doing this. Instead. There were a few people that brought up training in ways that we hadn't mentioned in our list of options, but it was literally four people who responded with an option other than ours. So, these really were the options that contractors felt were appropriate and its safety climate and safety culture that emerged at the top.

 

Ben Johnson:    

Very interesting. So, another interesting aspect a you brought up is substance abuse. So, do we learn anything specifically about how contractors are responding to substance abuse?

 

Donna Laquidara-Carr:  

Yes, we did learn that. For one thing, we learned that the contractors are much more concerned about opioid use. 71% report that the safety impacts of opioid use have a, at least a moderate level of concern or higher. Only 50% of them know, have an approach to deal with this issue. So, you have, you know, the majority saying, yeah, we see this as a problem but then only half of those that see it as a problem, no one any are doing anything about it right now because presumably they're not sure what to do. So, we did ask them those who actually said, yeah, we have a strategy in place. We're doing something about it. We asked them what those strategies were and it's interesting even though the opioid abuse issue was much higher of level of concern when it comes to those who actually have strategies, they tend to be using the same strategies for marijuana, for opioids and for alcohol.

The same things came up over and over again. And those tended to be testing. They're testing their employees on a regular basis and that actually also includes prescreening. A lot of them are testing before they hire and doing interviews, doing background checks, et Cetera to do a prescreening of the employees. They feel education and communication is a big way of tackling this issue. Supervisors, they see as a key tool in their tool box to deal with this some point to zero tolerance policies. You know, if someone gets caught with an issue, that's it. And access to rehab did show up quite frequently as well.

 

Ben Johnson:    

So, I'm wondering again about the GC and trade split. Are they approaching these issues in the same way?

 

Donna Laquidara-Carr:  

Not necessarily. We do see the GC's are a little bit more concerned about these issues or to be more precisely correct about what the data actually reports. A higher percentage of trade contractors say they're not as concerned, you know, they're at the low, no concern levels for the, you know, these, these substances. In terms of what's happening, we also see some interesting splits when it comes to size of company. And the biggest one, and it's like this is not surprising, still worth noting, is that the large companies now this is whether they're GC's or trades, I don't see an equal split on this with the type of firm, just with the size of firm. Large companies are more likely to have a strategy in place to deal with these challenges than smaller firms. So clearly there's an advantage to having more resources available to you.

 

Ben Johnson:    

This is all very interesting, but did you find anything else that was particularly interesting to you?

 

Donna Laquidara-Carr:  

Well, for me particularly, I thought it was interesting to see what was going on with marijuana and who said it was a high level of concern and we actually saw some regional differences on that. They clearly have something to do, I think with legalization because those in the West are most concerned about marijuana and those who are at least concerned are in the Midwest. So, I think if you, if you map out where marijuana is legal, that is going to pretty much especially recreational use, that is going to pretty much align with those findings.

 

Ben Johnson:    

So, what about safety in general? Anything else that those stood out to you?

 

Donna Laquidara-Carr:  

Well, most contractors do find that their safety efforts provide them with a competitive advantage. Now, we did find that the majority of those who said they were receiving a competitive advantage said it was either low or moderate, not only about a quarter said that they were getting a high degree of competitive advantage. And I think that doesn't have to do with the fact that they don't recognize the importance of safety. I think it has to do with the fact that they recognize the whole industry recognizes the importance of safety. So, when it comes to competitive advantage, you have to be doing something that others are not doing. When we asked anyone who said that they got a competitive advantage, what they saw out of it the biggest thing they said is reduced cost of insurance. And that was a pretty big majority reduced liability. No surprise there. Having an improved ability to contract new work though did show up to a substantial number as the one of the reasons that they get a competitive advantage of safety. So clearly some owners are starting to look at this too.

 

Ben Johnson:    

Very interesting. Anything that raises the bar for safety is moving the industry forward. That's very interesting to hear. Do you know what the topic is for next quarter, CCI spotlight article?

 

Donna Laquidara-Carr:  

Well, we have the topic. We haven't gotten down to the specific questions yet, but we know the topic is going to be use of advanced or emerging construction technologies on the job site that we're going to need to focus it more than that. It'll be interesting to see where we go with it, but that's something that we've heard back from people that they're very interested in and it'll be a fun topic to look at.

 

Ben Johnson:    

It will be, and a fun topic to discuss here on the podcast. Thanks again so much for joining us, Donna.

 

Donna Laquidara-Carr:  

Sure. Anytime.

 

Ben Johnson:    

Thanks for listening. A free copy of the report referenced in today's show is available in the show notes or at construction.com; you can reach Dodge at construction.com or at (877) 784-9556. That's all for this show. We'll see you next time.

 

Episode links:

Q3 2018 CCI Report (with Spotlight article on safety)