After a busy and challenging 2017 for the construction industry, what are the biggest risks to be mindful of in the year ahead? CE This Week spoke with Rick Keegan, president of construction at Travelers, and Bob Kreuzer, vice president of risk control construction at Travelers, to get their thoughts on the issues that may affect the industry during the next 12 months and what businesses need to do to prepare.
What risks could have a big impact on the construction industry in 2018?
Keegan: In 2018, the labor shortage, on-the-job distractions and the incorporation of more cyber capabilities to be the biggest risks. Coming off a record year for natural disasters, the need to rebuild puts added stress on construction labor staffing, exacerbating a continuing issue in the industry. This problem will likely persist well beyond 2018, so it’s crucial that construction companies take steps now to address the current challenges and invest in strategies that ensure skilled employees are being brought on board and the proper training is put in place to help decrease the likelihood of injuries and accidents.
There’s also the potential for more on-the-job distraction than ever before as mobile devices continue to invade seemingly every part of our lives. We see this increasing the risk of distracted driving and other on-the-job incidents that can lead to severe injuries.
Finally, as construction work continues to integrate technology in worksite activities, with the increasing use of Internet of Things (IoT) devices, wearables, digital planning and the storage of plans, protecting the physical borders of the worksite may no longer be enough. This change presents an emerging category of risks that managers will need to protect against, including the threat of a cyber breach.
How might the skilled labor gap impact the construction industry this year, and what can be done to address it?
Kreuzer: The two biggest risks that can come from an unskilled workforce are on-site safety issues and the potential for construction defects. Claim data indicates that 52 percent of all workplace injuries occur among employees in their first year of employment, and 68 percent occur in their first three years. This applies regardless of the employee’s age or industry tenure, meaning that even experienced workers are at an increased risk for injury as they adjust to a new company or new surroundings.
Having a thorough screening process in place can help identify the candidates who have the proper credentials and experience to safely deliver quality work. A formal procedure for attracting qualified candidates, complete with an outline of the expectations around maintaining a safe culture in addition to job requirements, can help address the skilled-labor gap. After people are hired, promote a safety-first mindset through both hands-on and awareness-based training.
Once new employees have been thoroughly trained, project managers should have a plan in place to make sure employees are being thoroughly acclimated to the worksite, as this can help decrease the likelihood of accidents and injuries. This plan might include peer-to-peer mentoring or a system that allow superintendents, foremen and site safety personnel to quickly and easily spot newer workers on a jobsite (unique badges, hard-hats, etc.) so they can provide extra attention and guidance.
It’s also key for managers to supervise new employees in order to help ensure quality work and reduce the potential for construction defects. An organized approach and firm quality-control measures can help a company avoid losses, maintain its reputation and promote future success.
What risks and opportunities will technology bring to the construction industry this year?
Keegan: With the rapid progression of technology, the traditional worksite is becoming “borderless,” meaning vulnerabilities stretch far beyond the perimeter of a jobsite. Construction managers previously needed to think of the risks associated with the physical location. Integrating technology in worksite activities can bring new risks that aren’t addressed by on-site security alone. Digital planning, collaboration and the storage of blueprints can leave companies vulnerable to being hacked, or having their information or control systems compromised. According to our recent Risk Index, only six percent of construction leaders say they have created a data breach incident response plan. This highlights the lack of preparedness in the industry. We view it as imperative that any company using digital planning and other technologies have a robust response plan if data, including its availability, is compromised.
Additionally, companies are exploring the capabilities of wearable devices and sensor technology and determining how they can leverage them to improve both workplace safety and efficiency. At the same time, contractors must grapple with how to manage the data produced and their obligations to properly secure sensitive data while also acting on information that may allow them to mitigate risk of injury or incident. We are currently working with contractors and technology providers to discuss and evaluate the use of wearable technology as a means to enhance jobsite safety.
Similarly, contractors face risk, but also opportunity, when it comes to vehicle telematics. GPS Insights’ 2016–2017 Fleet Management Technology Report notes that 41 percent of construction fleets are now fitted with telematics, which can help improve road safety and reduce emissions by improving route efficiency.
However, it’s important for businesses to understand that telematics systems also create additional responsibility for their business. Some jurisdictions may recognize failure to act on telematics data that reveal unsafe driver behaviors as a basis for corporate liability in the event of an accident. One of the effective uses of telematics is as a driver coaching tool, when management uses telematics data to help improve driver safety and allows for feedback from managers to help improve performance.
What are some ways for employers to curb the increasing risk of distracted driving in the course of construction activities?
Kreuzer: Any company with employees who drive, regardless of frequency or distance, is exposed to potential auto accidents. Distractions behind the wheel can be one of the biggest factors in accidents, yet a survey of customers found that only 27 percent of businesses have a formal distracted-driving policy. Having a policy that addresses, among other issues, the use of mobile phones, cameras and apps while driving, including GPS devices and telematics, is a critical step in combating this risk.
Another thing to keep in mind is that employees are less likely to take a safety policy seriously if managers are not demonstrating safe behavior themselves. A recent survey conducted by Harris Poll that we commissioned found that 43 percent of employed U.S. adults who drive admit to engaging in work-related communications like emails and calls while driving. Their bosses may be contributing to this statistic — 27 percent said their boss has called and/or texted even though he or she knew they were driving. Not contacting employees when they are driving or operating equipment and encouraging workers to not answer any calls, work-related texts or emails while behind the wheel is a great place to start.
What types of the accidents result in severe injuries in the construction industry?
Keegan: The construction industry continues to see an uptick in the frequency of severe incidents. The skilled-labor shortage is one of the drivers behind this trend, as newer and less experienced workers are at increased risk as they acclimate to the hazards of a new industry or new jobsite.
The types of incidents that result in severe injuries are wide ranging, but areas of notable activity include falls from elevation, workers being struck by or against moving parts of equipment or objects being moved or loaded, and motor vehicle accidents. Spinal cord and traumatic brain injury cases tend to be the most severe, although straightforward back and joint sprain or strain cases can also be quite serious.
How can construction firms better address potential for damage from vibration in 2018?
Kreuzer: A thorough pre-construction survey makes all the difference, and should include things like written building condition reports, photographs, benchmarks and survey points, video footage and even seismograph records. This may seem obvious, yet thorough surveys are not being done beforehand or throughout the span of a project before different aspects of the job begin. Surveys are critical because they help identify potential risks before any work starts, enabling contractors to implement mitigation plans and record the initial physical condition of structures and utilities.
Travelers’ online tool ZoneCheckSM helps contractors quickly identify areas that could be affected by vibrations from heavy equipment. Approximately one in four severe construction claims involves possible vibration-related damage, which could potentially be avoided by using tools like ZoneCheckSM.
Final advice to contractors is have a strong quality-control program in place. Having a good QA/QC program can significantly reduce the risk for construction defect losses.
