Any job has its challenges and risks but in the construction industry– mistakes can either lead to success or costly penalties and/or claims. Since this is the case, construction risk management is something that you should not miss out on.
You need to be able to identify risks in your project before it causes you problems. Although each construction project can be different in its ways– most of the processes are almost the same in all of them. Once you are familiar with the processes, it will be easier for you to make an effective risk management framework across different projects if possible.
A risk management framework has three crucial components:
- The right people
- The right industry-specific tools
- A standardized process
As long as you have the right people, tools, and a standardized process– mitigating risk and regaining control of your projects is not as difficult as it sounds.
Defining Risks in a Construction Project
Anything that poses a threat to the progress and completion of a project should be considered a risk. If something can result in a potential loss for the company
The risk could be defined as any threat to the progress and completion of a construction project. In other words, any circumstances that can expose you to potential loss could be described as a risk.
Types Construction Risks
Before you can regain control in case of unexpected risks, you need to understand the different types of risks you could face during the duration of your construction projects.
Project Management Risks
This type of risk is related to the management of the project. Anything related to the effectiveness of the current management process of the project is under this category.
You need to keep everyone in the team connected and set a high standard to prevent mistakes.
Fiscal Risks
This type of risk includes issues related to finances, location, and any circumstances that can lead to the delay of the project. It is difficult to deal with risks that are completely out of your control, but you can always do thorough research and prepare alternatives wherever applicable.
Legal Risks
As the name suggests, this type of risk is all about legal issues. The construction industry does not shy away from claims and legal issues at all. Processing legal claims can result in a serious downtime for your project. You need to record everything that happens on-site to make sure that you have all the proof and evidence that you need.
Environmental Risks
Understanding the environmental conditions of an area will help you be able to effectively schedule tasks at the right season of the year. You can protect your site, the project, and your people by doing this right. You want to make sure that the site is safe from earthquakes, floods, and other natural disasters.
Job-Related Risks
It is not a secret that the construction industry comes with a lot of job-related risks. There is a high rate of accidents on construction sites, whether it’s due to missteps on a high platform or improper handling of hoists and lifts— it is hard to foresee where accidents will happen.
This is why it is necessary to make the construction site as safe as possible by checking equipment, wearing complete PPE, and thoroughly checking the site before starting the project.
Steps to Managing Unexpected Risks
Here is how you can manage the unexpected:
Work on increasing site visibility.
What does this mean? You need to exert some effort to ensure that you can see more of the site. You can try setting up a shareable on-site live view of the project so you can track the progress of each team. The more you see, the better you can manage.
Get everybody on the same page.
Everyone on the team must use a single source of truth. A single source of truth also means a single source of proof. Being on the same page as everyone can help keep your project risk-free.
Standardize processes as much as possible.
The old saying goes “There’s more than one way to skin a cat “. But please don’t skin a cat, and please do standardize your processes.
Although there are many ways to get the job done– you cannot guarantee the quality of each one of these methods. On top of that, it can only go two ways:
- Your team will consult you every step of the way because they’re not sure if the method they have in mind fits with the project.
- Or, your team will proceed without consulting you using the method they think works, but end up having a quality issue somewhere down the road.
Standardizing the process will allow your team to create a decision without consulting you all the time while still sticking to company standards.
A pre-designed process will leave less room for mistakes and it ultimately lessens the chances of risks.
All Things Considered
You need to know what is going on in the project and keep track of what is happening. Make sure that the right tools and equipment are on site. Keep in mind that operating equipment like hoists and lifts takes skills, so make sure that you assign a certified operator to avoid risks.
Accidents happen and risks are everywhere. You cannot control every single thing on the construction site, but what you can do is to prepare and stay vigilant while working on a project.