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Amidst the buzz of the recession, many industries have taken steps to brace for its impact.
The construction industry in Sri Lanka, in particular, has been in a state of flux since the onset of the pandemic even though it feels like an eternity ago!
No one can deny that a recession brings its share of hardships: downsizing, layoffs, reduced profit margins, bankruptcies, and greater competition.
Nevertheless, it does illuminate poor business decisions and remind us that, in the long run, good business fundamentals prevail.
Though there may be some reduced growth during a recession, good construction companies in Sri Lanka can still survive and bolster their reputation even further in the eyes of their customers.
For the past decade, the construction landscape in Sri Lanka has been continuously evolving, with even a recession adding just another layer of complexity to this vast picture.
Project delivery models have shifted from design-bid-build to design-build.
The industry is also witnessing a surge in sustainable building projects in Sri Lanka, in addition to a drastic transformation of office and job site technology.
The construction industry is currently trying to balance a complex mix of variables.
Despite ongoing skilled labor shortages due to the working force is moving out of Sri Lanka, industry employment is increasing, and demand for construction services remains high especially from foreign investors.
Although material and energy costs remain elevated, workers can negotiate higher wages as unemployment declines.
This could lead to further interest rate increases to combat inflation.
Overall, the economic outlook is positive, with project backlogs steady and contractors expecting increased sales and employment.
Nevertheless, the construction industry in Sri Lanka remains vulnerable to the whims of the global economy, and construction contractors in Sri Lanka must remain agile to capitalize on any short-term economic recovery.
During an economic downturn, it’s natural to look for ways to save money. Recession-proofing should always start with people.
However, laying off costs with construction workers in Sri Lanka can quickly become a two-edged sword, as people are at the core of project success.
Firing workers can be risky, as a labor shortage already exists, and attempting to rehire quickly in the event of a recovery may be a challenge.
It may appear counterintuitive to invest in personnel when work is slow, but it’s not a bad idea.
Having a labor surplus in a construction company in Sri Lanka may cost more in the short term, but when the economy picks up, you’ll be better prepared and able to assemble teams of people you already have rather than trying to find the right fit.
The real issue isn’t the cost of labor, but rather the cost of managing it ineffectively.
By playing to your strengths, you can recession-proof your company and improve your bottom line.
When you focus on projects that you have a higher chance of winning, you build trust with your clients, minimize your bid-hit ratio, and become more strategic in your approach.
This way, you can be confident that you are using your resources, such as your estimators, wisely and efficiently.
Additionally, you can ensure that you have a long-term view of your labor capacity and access to quality data, allowing your team to collaborate effectively.
This can help you maximize your chances of success and ensure your business is prepared for any potential downturns.
Tearing down data and communication barriers in your construction company in Sri Lanka is one of the best ways to protect your business from economic pessimism.
When teams isolate and work in a vacuum, it has a damaging effect on morale and performance.
This is especially true in the construction industry in Galle where Crystal Construction is located, where silos are a common occurrence.
Spreadsheets, whiteboards, and other tools are not designed for complex projects and quality data sharing.
Breaking down information silos should be a priority for businesses to improve collaboration and productivity.
Investing in construction workforce management software is a great way to get started. This software allows cross-functional teams to collaborate around labor-related variables.
Imagine the impact of providing your business development team with the ability to anticipate when experienced workers will be available for new projects.
This would enable them to acquire the necessary materials for bidding on jobs and ensure your company can deliver.
Likewise, operations teams will be able to factor in the projects being pursued by the business development team and assess if your organization has the manpower to effectively complete them.
If not, HR can be consulted to recruit qualified personnel promptly.
In the current skilled labor climate, any extra time you can afford to spend on recruitment efforts is highly beneficial.
Rather than relying on devious methods to remain afloat during a recession, the key to success lies in making sound business decisions.
While there is no guarantee that these decisions will turn your company into a powerhouse, those who can weather the economic downturn and come out on top will have discovered how to effectively employ their team and win contracts more often.
When the dust finally settles, they will be well-positioned to take advantage of the subsequent boom.
If you are looking for the perfect team to help you to buy the land in Sri Lanka and take on the complete construction project, look no further than Crystal Construction Company in Sri Lanka.