Digitization is impacting the multifamily construction industry.
The demand for multifamily-style housing is increasing rapidly. In fact, between now and 2030, the United States will need to need to construct 4.6 million apartments just to keep up with rising demand. While apartment construction has increased since the Great Recession, it remains well below historical averages and the level needed to meet demand.
An immense shortage of skilled labor is continuing to challenge the industry, with 79 percent of construction companies needing to hire more employees in 2019, but the industry is only estimated to grow its workforce by half a percent annually for the next decade. The challenge lies in a lack of qualified candidates stepping up to take over positions as aging industry veterans near retirement.
This wide gap between open construction positions and skilled workers ready to fill them is putting pressure on multifamily construction teams, developers, contractors, owners and property managers alike. Large projects across asset classes typically take 20 percent longer to finish than scheduled and are up to 80 percent over budget, according to a report by McKinsey & Company. Stimulated by increased construction demand, a labor shortage and emerging technologies, the industry is turning to digitization as a solution to increase efficiencies and build more with fewer workers.
Walking by, it is amazing to see the amount of activity taking place at any given multifamily construction site. Hundreds of workers soldiering away in an ever-changing structure, sometimes still operating in the same way as 50 years ago. What worked then is no longer practicable today. It’s no wonder the industry is lagging to meet the increasing demands for multifamily building. Projects are becoming more intricate, with digitization permeating every facet of our lives.
Multifamily dwellers, building owners and property managers are demanding the latest in digitized solutions including mobile or electronic locks, and smart features. As an example, advanced mobile access control solutions offer ample benefits to residents and property managers including automated package management, electronic audit trails to manage access and mitigate risk, convenient access for residents and the staff they call in for service, the reduction of property management staff due to increased efficiency, interoperability, reduced liability and streamlined amenity management.
However, these new features are adding more complexities for construction teams to consider during a build, requiring additional front-end planning and increased collaboration with specifiers, integrators, architects and engineers. These added layers require new ways of thinking and working, and the solutions lie in digitization.
From a technological standpoint, the greatest obstacle to success in construction today is the data silo. The value of all the data and information stemming from a single project is monumental, and can be used to guide future projects, improving decision-making, productivity and quality, while mitigating risks. The current dependence on manual processes and paper-based project management systems limits real-time collaboration, visibility, analysis and reporting, and hinders improvement. These outdated solutions make it very difficult for construction leaders to manage their teams, monitor the status of tasks and communicate across divisions.
Construction leaders are starting to combat these issues by utilizing digital project management tools and software to automate previously manual and paper-based processes, enhance visibility and real-time cross-team communications, capture comprehensive data on builds, and ultimately, build more efficiently. This better, up-to-date project data and communication has the potential to close the productivity gap, helping construction teams work smarter.
The widespread adoption of low-cost, user-friendly mobile connectivity has brought in a new generation of “mobile-first” cloud-based project management tools that can be deployed, even on remote construction sites, with real-time updates. These can be scalable for multifamily construction projects of all sizes and are used to simplify the design, construction and management of openings through improved communication, collaboration and efficiency. It provides construction teams, architects, integrators, building owners and design professionals the freedom and flexibility to connect to door hardware data and collaborate with colleagues at any time, even when offsite. Additionally, some project management tools offer users the ability to review and edit project details, add and remove collaborators, communicate across teams in real-time, transfer ownership of a project, view project files and data and create punch lists.
Features like these transform the way a construction team works. Furthermore, technology like Building Information Modeling (BIM) creates intricate 3-D and 4-D models of any structure, enabling a completely collaborative and editable digital version of a job in progress, with every team member aware of the changes in real-time. Today’s leading cloud-based project management platforms are able to centralize data from all teams involved in a construction project, breaking down silos and offering users a complete view of the project at any given stage.
In the short term, analyzing this data will provide actionable insights into site operations, while ensuring transparency, timely progress, risk assessment and quality control. Over time, the application of automation and AI will allow construction companies to leverage this information to plan for, predict, and even prevent specific future outcomes.
The potential is being proven and investments in the digital-collaboration and mobile-solutions vertical are increasing. In fact, this area has attracted close to 60 percent of all venture funding in the construction-technology sector. The construction industry is no longer stuck in an antiquated grid lock, and this digital transformation is helping close the gap. A recent report from the McKinsey Global Institute on construction predicted that “infusing” digital technologies into construction processes would result in a 14 to 15 percent improvement to industry productivity.
Other industries have proven that early adopters can build a long-term competitive advantage. Over the next few years, we will see this in the construction industry. The companies leading in technology innovation and digitization will reap the rewards, while those that are stuck in the status quo and are slow to digitize will lose ground.
Tom Keenan is a project based business leader at Allegion.