The Real Cost of Poor Communication in a Construction Company

There is no aspect of life and no profession where we don't need good communication - after all, we, as a species, developed a language - the most complex communication system - to exchange information and express ourselves more effectively.

Did you know that one of the main theories of language development says that humans, who weren't by any means the strongest part of the ecosystem back then, started using the first system of meaning to cooperate more effectively than animals? That gave our ancestors the advantage that will prove to be crucial in the course of history.

Billions of years went by, but the importance of cooperation has never decreased - and efficient communication is the absolute must for any efficient collaboration. Today, we will look at the cost of poor communication in the construction company and how you can make it better!

Communication in Construction

While the significance of communication in sound business and project management might seem like a no-brainer, do you know the cost of failure in that matter?

Research shows that companies with an average of 100 employees lose around 400.000$ per year, and the bigger the number of employees, the higher the chance of disruption in the communication process and therefore, the bigger the losses.

When it comes to construction, this is even more true due to the character of works, which are frequently carried out in different locations with different teams. The process is often even more complicated by having to communicate with subcontractors and diverse suppliers, not to mention that the site-workers are almost always remote from the decision-makers, making the office-site and site-office communication particularly difficult.

• 80% of employees feel pressured and stressed because of ineffective company communication

• According to the Project Management Institute (PMI), poor communication in a company is the #1 reason for project failure

• 68% of employees declare they always or usually experience some problems due to poor communication

• 36% of employees don't know where to find the information they need to complete their tasks

Among the biggest causes of delays, construction workers list the lack of information prioritisation, problems with information distribution and the lack of effective communication channels.

Now that we have the solid facts that the project's success, company’s and employees' well-being depends on communication, let's get real about how the lack of it affects its day-to-day operations.

The Effects of Bad Communication in a Construction Company

• 01

  Delays
  However sad that may be, it seems that time overrun is somewhat expected when it comes to construction projects. Even up to 77% of construction projects suffer significant delays, and one of the biggest factors in this gloomy phenomenon is poor communication.
  
  Whether it's slow information flow, misunderstanding or forwarding information to the wrong person,the lack of adequate and trustworthy forms of communication causes chaos and mistakes that will inevitably lead to delays.
  
  Let's think about the situation where a change of design was made but it did not reach the appropriate subcontractor due to the lack of effective information flow between contractors because no one set a communication structure to make the cooperation easier. Now, once the mistake is discovered, you will need time to redo the task, and the whole project schedule will go out the window because this step was necessary for other activities to happen on-site.

• 02

  Busting Budget
  Time and cost overruns seem to be the scary twins that haunt construction project managers. The rate of projects busting the original budget is high, and researchers found that poor communication and administrative difficulties are the most critical factors in project cost overrun.
  
  The lack of communication means that construction workers spend much of their time solving issues that could be easily avoided, or searching for needed information which could be prevented by setting up effective communication channels.
  
  Research shows that in the US alone, the time spent on fixing mistakes, rework and looking for project data accounted for $177.5 million in labour cost per year!
  
  It goes without saying that delays mean higher costs, but that's not the only risk of lousy communication - think about the material changing information not reaching the right person in time. This means you end up paying double for the material you don't even need. Or, think of a situation where the project manager is not informed about the delay in material delivery and, as a result, rents some special machinery, which won’t be used on-site, but consumes the budget nevertheless.

• 03

  Low Morale
  It's kind of obvious that the lack of needed information, poor communication and the problems it causes can lead to stress, demotivation and other negative emotions among the employees.
  The lack of information or mixed messaging can cause confusion and feelings of being out of control, which psychologically speaking is highly stress-inducing.
  
  Moreover, the lack of understanding between all involved in the project can cause conflict and disputes between parties, especially when decisions made off-site don’t acknowledge the realities on-site. And the need to rework and fix other people’s mistakes can cause resentment and make practical cooperation impossible.
  
  All of this can cause a hostile workplace atmosphere and lead to workers leaving for other employers. Dynamic Signal found that 63% of employees are prepared to quit because of ineffective communication at their company! Considering this, plus the high rate of sick leaves due to stress experienced at work, it presents the companies with a significant threat in the reality of skills shortage.

• 04

  Health and safety issues
  The percentage of construction workers suffering a work-related injury is significantly higher than the all-industry rate. In the UK, there are approximately 60.000 non-fatal work-related injuries every year.
  
  Working on-site includes many potential hazards such as falls from heights, slipping or tripping over something, injuries related to carrying and lifting or being struck by falling objects, electrical shocks and so on and so on.
  
  Although it may seem that it has nothing to do with communication, research by Dynamic Signal showed that 36% of employees were in an unsafe situation because of poor communication. So how does one influence the other? The safety procedures may not be clear, and workers may not want to speak up if they discover the potential hazard, as they may not want to step out of line and risk being criticised.
  
  Good communication helps set up an effective healthy and safe communication structure and a culture that allows identifying potential hazards and spreading the information quickly with other employees and people in charge. There is also a great need for explicit instruction on safety procedures on-site so that everybody knows what to do.

• 05

  Miscommunication between stakeholders
  Multiple stakeholders such as investors, designers, general contractors, project managers, workers or subcontractors are involved in every project. Therefore, an effective exchange of information between all parties is the cornerstone of any successful project.
  .
  As stated above, the need to rework is one of the biggest plagues of construction projects as it causes delays, increases costs and can lead to various conflicts among stakeholders. Research shows that almost half of all reworking is the effect of miscommunication and a poor project information flow!
  .
  Without establishing a clear communication structure for all parties involved in project completion, you can be sure that things will take twice as long, consume twice as much and give you far more stress than needed.

While what we described above is essential, as it's specific for the construction industry and needs to be considered while aiming to optimise the company's processes, we need to remember that a construction company is, to some extent, a business like any other.
At that level, poor communication can mean:

• Lack of accurate and reliable information in the decision-making process - from project execution to the company’s finances - which, in extension, can lead to setting goals and KPIs that are not coherent with reality.

• Lack of transparency between different company departments can lead to some unreasonable requests or expectations, resulting from not understanding the process and responsibilities, which leads to nothing but chaos, stress and lower productivity.

• If higher-level management fails to include different perspectives while making decisions that will influence all employees, it may cause defensiveness, resentment and resistance to the proposed changes. Not to mention that taking into account every single voice can improve the chances of making decisions that are in the company’s best interest.

How to improve communication in a construction company?

Now that we are all on the same page when it comes to the significance of the quality of communication in construction companies, we should look for some solutions.
So what can you do?

• Establish a transparent communication chain

• Present quality checks to control the communication flow

• Encourage employees to communicate openly

• Provide "soft" skills training for employees

• Avoid using jargon when communicating between different specialists

If you want to learn more about enhancing communication in a construction company, make sure to check out our article on this topic, where we get into more details!

Check it out!

Enhancing Communication with Business Management Software

Incorporating modern business management software in your construction company can bring numerous benefits but improving communication is undoubtedly one of the things that can be taken to a whole new level of efficiency.

The construction management software gives your employees the tools to keep track of every piece of information they need in the construction process. You can stay on top of the progress of work, establish acceptance chains. At the same time, site workers can access tools that allow them to report to their supervisors from their smartphones wherever they are and get feedback instantly - without needing to chase one another on-site.

Additionally, one of the most significant advantages of implementing a modern management system is having all relevant information stored securely in the cloud within one system. This means everyone can access all the information they need and collaborate effectively in real-time.

The Archdesk construction management platform connects all departments of the company and all employees in a secure, digital workspace, available anywhere and anytime.
Our solutions can give your whole company, both in office and on-site, a strong backbone of effective and smooth communication. If you want to learn more about the solutions that could help your company, come and have a chat with us!

Talk to our specialist!