Construction firms look to risk management to tackle COVID challenges

More than half of the UK's construction companies have altered their procurement processes, placing a greater emphasis on risk management to tackle pandemic-related operating challenges.

This is according to contractors' accreditation organisation, Chas, whose supply chain risk management experts surveyed almost 900 construction business owners to find out how the pandemic has affected their businesses, what they’ve done to adapt and how they view the post-COVID landscape.

Managing director of Chas, Ian McKinnon, said construction businesses have been adapting their approaches since the beginning of the pandemic.

“Although the industry was hit hard by the pandemic, with government guidelines putting a stop to construction work earlier in 2020, it is reassuring to find there is still optimism within the sector," he said.

“It is also encouraging to see an increased focus on risk management because construction businesses and contractors who can provide reassurance of compliance with latest industry standards and best practice guidance, including COVID-secure rules, will maximise their chances of qualifying for work.”

Construction risk management: Survey highlights (Source: Chas)

Over 70% of respondents experienced some decrease in turnover during lockdown with the same amount saying they weren’t always able to get the goods and services they needed to carry out their work. Of those surveyed 80% said they had had projects cancelled or postponed due to the pandemic.

In terms of how construction businesses have adapted to operate during the pandemic more than half (52%) of respondents said they have changed their procurement processes with 47% putting measures in place to tighten their risk management strategies. Almost a third (31%) of those questioned said this includes asking suppliers to demonstrate that they are adhering to COVID-19 best practice guidance. Meanwhile, over 30% of respondents confirmed that they have also had to diversify their supplier base in response to the pandemic.

Some 6% of companies surveyed said they have experienced an increase in turnover during the pandemic and over half (55%) said they remain optimistic about the future of their businesses.

Image courtesy AXA XL

    Share Story:

Recent Stories

Financial institutions were early adopters of cyber security and insurance. Are they still on top of the game?
Managing huge amounts of sensitive data online makes financial institutions a prime target for hackers. As such, the sector was an early cohort for insurers in creating cyber cover. Since then, the market has evolved almost beyond recognition. It continues to challenge itself to this day, complying with rigorous regulatory demands and implementing avant-garde enhancements to keep abreast of the ever-changing risks.

Manufacturing: An industry at risk amid great technological change
Of the many sectors of business, manufacturing companies are among the most at risk from cyber threats. How has the sector evolved to make it so vulnerable and what does the task of managing cyber exposure in a manufacturing company look like? CIR’s latest podcast with Tokio Marine HCC sought to answer all these questions and more. Published April 2021