4 Risks in Construction Projects and How to Manage Them

Oct 19, 2022 10:08:28 AM

Owning a construction business means being familiar with and ready for the risks involved. When you master risk management, you can plan well and make the best decisions for your business.

Here are some of the most common risk factors that construction businesses encounter, as well as how you can manage them and how you can prevent them.


  1. Health and Safety Hazards


Construction projects are unpredictable. The situation on the job site can change in a second, and risks can show up at any time. Construction workers might be exposed to any of several hazards on a construction site, but some of the most common ones include:


  1. Heavy machinery
  2. Lead paint peeling from old structures
  3. Asbestos
  4. Ladders
  5. Defective scaffolding equipment
  6. Carbon monoxide
  7. Accidents resulting from driving in and out of construction areas


These are just a few of the most common hazards that construction workers face. Still, there are also other risks that you run into when you’re using tools and equipment that can cause stabbings, electrocution, and other serious injuries.


How to Manage and Prevent Health & Safety Hazards


The best way to manage health and safety risks is to mitigate them as soon as you can. Here are some strategies for mitigating these risks:


  1. Plan your schedule and ensure you have enough human resources to handle the workload.
  2. Schedule your work according to the times of the day when there are fewer people on the road. This will help reduce the chance of accidents.
  3. Only use the tools and equipment that you need—the more tools and equipment you use on-site, the greater the risk of accidents. 
  4. Require the workers to wear the appropriate safety gear when working on the site and comply with construction safety regulations.
  5. Provide safety training for your workers.


  1. Subcontractor Problems


Subcontractors can be of great help in construction projects. They get the job done quickly, are usually cheaper, and give your business more flexibility. But it can be a lot of hassle to manage subcontractors, as they can easily delay the project if they fail to deliver their portion of the project on time.


How to Manage and Prevent Subcontractor Problems


It can be difficult to manage subcontractors, especially when many of them work on a big project. Here are some of the best approaches to managing subcontractors:


  1. Build communication channels to keep in touch with your subcontractors.
  2. Create a sub-contract agreement with your subcontractors, with timelines and penalties for missed deadlines.
  3. Enforce a strict timeline and make sure the subcontractors stick to it.
  4. Ensure that you have enough resources to deal with any problems that arise.
  5. Have a contingency plan just in case any problems occur.
  6. Make sure that you’re clear about the project's progress so that you can deliver the final product on time.
  7. Require your subcontractors to provide health and safety training to their workers.


4 Risks in Construction Projects and How to Manage Them

  1. Change Orders


Change orders can cause a lot of problems during construction projects. They usually lead to delays, increasing costs, and a general increase in the amount of effort and resources you need to complete the project.


Change orders can delay the project in several ways. First, you need to reevaluate the project design and make sure it’s still the best approach. Second, you need to get building permits. Third, you have to re-engineer the project, which can lead to costly mistakes.


Change orders can also lead to an increase in project costs. First of all, change orders are usually expensive. They can also increase your project timeline, which can lead to an increase in your project costs.


Change orders can also be challenging to manage. They can cause misunderstandings and delays and be impossible to track.


How to Manage and Prevent Change Orders


Here are some of the best strategies for managing and preventing change orders:


  1. Never promise a client a lower price for the project just because you’re using change orders.
  2. Ensure you clarify the work required to complete the project.
  3. Open discussions on discrepancies and vague items in the project plan or contract.
  4. Ensure that you cover all labor, equipment, and material requirements in the change order.


  1. Labor Shortages


Labor shortages are common in construction projects. You may need to hire more workers than you expected. In some cases, this can lead to a need for overtime, which can cost a lot of money.


In other cases, you might have to cut certain parts of your project or to have less work done. This can cost you money, especially if you have to do the project all over again or if you have to pay for extra labor costs.


How to Manage and Prevent Labor Shortages


Here are some of the best strategies for managing and preventing labor shortages:


  1. Provide training and development opportunities to your workers, so they’re less likely to leave the company and more likely to grow within it.
  2. Create a list of potential candidates and keep them on standby if you need to hire workers in a hurry.
  3. Do a more efficient job of estimating labor to be more accurate in calculating your labor costs.
  4. Keep a detailed list of the workers you hire, with their hire dates and job responsibilities.


Final Thoughts


Planning for risk can make all the difference in the world for your construction business. If you’re ready for the risks and can predict potential problems. To learn more about managing risks as building and remodeling contractors, try out CostCertified today. Have you ever wondered how much time you can save by improving your estimating system?Try this ROI Calculator, and find out!

CostCertified is a construction estimating software you can use to make accurate estimates on your projects. It will help you manage your resources and maintain accuracy in the finer details of your projects. Book a demo today to learn more!