14 Feb 2020 3 min read

3 Main Challenges The Fit-out Sector Will Face In 2020

 

“The Roaring 20's” are upon us and we are looking at the current Challenges of the Fit-Out Market. Will these challenges transfer into the next decade?

There is a growing trend over the last year, for EMEA (and not only), of projects in the Fit-Out area. There are more and more Fit-out companies in the Fit-out sector and as projects continue to come in, due to the increased demand for nonconformist office spaces (vs the traditional ones). Companies now, strive to create an inviting place to work (considering that min. 1/3 of one’s day is spent at work, we’d say it’s a way to go). New buildings designed to be modern office spaces are being raised all the time, all over the world, but reconfiguring the old ones is high up in demand too!

The shift in the mindset reflects externally as well, as building companies choose to seek help in the Fit-out Sector. The Fit-out companies can provide them with flexible office layouts, that help in the collaboration between members of the team and make the clutter disappear. The old-school, communist vibe, goes away by removing the carpets and having polished concrete floors and the small, intimate office spaces, for quick conversations, take over the great meeting rooms. The Fit-out companies provide flexibility and the opportunity to start things fresh in an old space.

With the rise of the Fit-Out sector (and, implicitly, of the Fit-out companies) we observe certain challenges that they will face in the foreseeable future. Today we wish to present to you the 3 Main Challenges of the Fit-out market, that we see appearing:

1.

Client VS Contractor - Communication Issues
Fit-out companies must oftentimes confront their clients, when their expectations continuously change (and this causes delays for the project). You need to make sure every single detail is put down, saved and agreed upon before the work starts. It’s crucial to have a way to track your project, throughout the entire delivery process, at any step of the way. You must make sure you have the correct details on your BOQ, that each financial document is correctly approved and if changes are requested, that these will be tracked. All information should be in a singular place, easy to use both by your team and your client. Although that of course doesn’t mean you shouldn’t have a listening ear and hear what the client needs - just make sure all is communicated properly.

2.

Estimation in the Fit-out industry
Getting an accurate project estimate for a fit-out project can be a great challenge of the fit-out market. To do successful bidding, you need to look at the problems that also fall inside the Estimation in the Fit-Out industry: short response time, BOQ sheet, collaboration issues, standardization (the need for it!) and the project cost. In these cases, we believe a next-generation ERP software will be able to assist Fit-out companies now and in the future. The new type of ERP allows you to manage Estimation issues and have it all under control. It focuses on the Quotation and helps you in the Estimation process. It enables you to streamline your sales process and generate sales quotes with complete quotation content (images, notes and T&C). You can send them directly to the client and speed up the response time, also by improving the communication. With the Quote tracking feature, you can manage and even record the valuations on the quote. The standardized approach is crucial in many cases.

3.

Labour Shortages in the market
It is not a surprise for anyone in the construction and fit-out sector that there are labour shortages. Also, due to BREXIT, small construction companies are set to be struck by the shortage. The Construction Industry workforce comprises 90% of British citizens, 50% are aged 45 and over! Also, the Department for Education in the United Kingdom shows that the number of new construction apprenticeships for January 2019 has fallen to 950, down from 1,216 the previous year. This is why they started out tackling this issue, thinking long term - e.g. there have been cases where fit-out companies started Primary School Initiatives. But this is not UK based only: there is a global construction skills shortage. The 2018 Turner and Townsend International Construction market survey reported that labour shortages are becoming an increasingly common feature of global construction. The 2018 report noted that 27 markets experienced a skills shortage, (in 2017 it was 24!). Soon there will be less and less trained individuals, and the ones that are in the market now will retire. Unless steps are made to attract people back into the building/construction/fit-out sector, we face a harsh future. This may be the number one Challenge of the Fit-Out market in the next decade!

It looks like the challenges of the Fit-out market may remain as they are now, through the coming year.We are facing a market that grows in the number of projects, but people working inside the field are not enough. We believe that going into direction of digitizing the industry and using modern solutions to support companies - could be the no.1 solution.

What does your company plan to do in order to face these challenges? We would love to hear your opinion on this! We encourage you to comment below :)

 

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