5 Ways to Generate Trust in Construction

August 29, 2017 by Progress Pay

This month’s Construction Payment Blueprint blog, and the fantastic eGuide that compliments it, is brought to you by ProgressPay, financing the future of construction.

Building trust along the construction supply chain is essential to solving many of the persistent problems plaguing the industry. In this latest blog, we outline 5 best practices to help generate trust, for the complete picture download our eGuide on this very important topic.

The majority of clients and head contractors say they can’t trust their subcontractors to any appreciable degree – 68% according to KPMG. Equally, subcontractors feel they can’t rely on their head contractors, citing a number of reasons from poor payment processes and contract complexity through to poor planning and communication.

Here we touch on five key practices construction businesses should adopt to generate trust and credibility along their supply chain.

1. Improved visibility of operations and plans across the supply chain

There are a few simple remedies that both head contractors and their subcontractors can apply to improve planning, communication, cash flow and productivity.

Head contractors often face local subcontractor recruitment challenges, which are particularly acute at half-year and year-end. However, if they gave their main subcontractors greater visibility into their future pipeline of work, they could plan their future needs more accurately together. To encourage this practice, subcontractors should foster a closer working relationship by proactively seeking out head contractors’ workload plans for the next year and keep communication lines open by attending their events.

2. Improve skills by collaborating with supply chain partners

The construction industry may be growing, however, demand for new and enhanced infrastructure has led to significant skill shortages across the board. The Department of Employment has been the clearest example of the skill shortage, regularly updating its skill shortage list with construction trades including brick layers, painters, solid plasterers, roof, floor and wall tilers to name a few.

3. Build trust through more collaborative working methods

Construction projects are effectively temporary enterprises made up of many and varied smaller businesses who are relative strangers to one another. Along the supply chain from the head contractor, there can be thousands of subcontractors working on a project.

Most projects are seeing little effort being put towards ensuring key supply chain members work well as a team. However, where there is a high degree of collaboration, there is more trust, leading to fewer disputes, or easier resolutions if they do arise. Two key areas to address are:

 Project Delivery

  • – Providing good leadership
  • – Setting the same goals
  • – More transparency around risks
Change Management

  • – Aligning behaviour and targets with ‘best-for-project’ out comes.
  • – Identify poor behaviour and processes early on and encourage open communication to resolve them.

4. Transparency and collaboration in contract management

The current adversarial practices in contract management only serve to erode trust between head contractors and subcontractors. A senate enquiry in South Australia showed subcontractors didn’t want to speak out about not getting paid according to their contracts for fear of losing business.

5. Collaborate to improve payment processes

Poor payment processes are seriously damaging subcontractors’ businesses and fuelling rancour across the industry as disputes escalate. Most businesses rely on disparate, slow, error-prone manual processes for handling progress claims. All parties have their own agenda and use their own totally separate, independent procedures and systems, where miscommunication, lack of visibility and missing or inaccurate documentation are all too common.


This eGuide has been brought to you by ProgressPay

Financing the Future of Construction

ProgressPay leverages the financial strength of the head contractor to offer subcontractors the option to receive payment of their progress claim-based invoice within 2 business days of its approval in Progressclaim.com. And the head contractor can earn revenue from participating!

 

Share this article

Book a demo

Let us help you transform your payment claim submission and approval processes.

Test

The Construction Payment Blueprint: 5 Ways to Save Time and Money

Download eGuide

The Construction Payment Blueprint: 5 Ways to Increase Profit Margins

Download eGuide

"What used to take me two days, now takes me two hours. Because Progressclaim.com is online, adminstration of the monthly payment claim cycle is less time consuming and much easier to manage. No more processing everything on a spreadsheet prone to error, and the assessment can be carried out at the touch of a button."

PAUL LINKE

Contract Administrator, BUILT

%d bloggers like this: