April 25, 2024

UK construction industry estimate losses of up to £13bn in projects due to poor communication between parties

An estimate of up to £13bn* is being lost in construction projects in the UK due to poor communication between parties, according to research published today (Wednesday 7 February) by Client Confident – a full service market research company with a specialist focus on the real estate and construction industry.

The research was conducted amongst 344 respondents working in the UK construction industry (respondents included project managers, seven of the top 10 UK construction firms by size, architects/designers and clients/ end users working in the public and private sector) and was carried out during February 2018.

Respondents estimated that in the worse-case scenario, an average of nearly 1,500 man-hours had been lost per project. In addition, respondents believed that an average of 15% of the overall cost of the project was also lost in a worst-case scenario thanks to poor communication. Key issues include costs, timings, progress updates, project management and the lack of a clear understanding of the impact of decisions on other parties involved in the project.

Other highlights of the research included:

  • Poor leadership and a lack of understanding about the impact of decisions made during the project were cited as the top drivers for weak communication/communication breakdown;
  • Seven in 10 respondents believe clients and end users working on construction projects in the private and public sector are the poorest communicators working in the industry and;
  • More than a quarter of respondents had admitted to being involved in a project where one or more parties was fired due to poor communication, with a further quarter admitting they have would have considered firing one or more parties had they had the authority to do so.

The construction industry speaks out – what do they think needs to change?

The respondents were also asked for more detailed views on how poor practices around communication could be improved in the industry as well as for their current and future projects.

High on the agenda are:

  1. Better leadership throughout the lifecycle of the project;
  2. The need for the industry to put an end to the blame culture that currently exists and a call for a much more ‘open book approach’ where honesty and integrity are imperative;
  3. A much better understanding of roles of responsibilities for all those involved in projects;
  4. Regular face to face meetings with as many of those involved throughout the life of the project to provide project updates;
  5. The need for contractors and end users to be involved in the early stages of project design;
  6. Clarity on deliverables and a better understanding of the real resource and upfront investment;
  7. Change in work practices to a more collaborative approach and environment, including workshops and training so that all parties meet at the start and have a shared vision and understanding of how the project can be delivered within the budget and timeline.

Susan Pettit, Co-Founder and Director at Client Confident, comments: “One of the big issues raised in the research, is that communication is often seen to take up too much valuable time. Yet, the industry admits there is a big price to pay as a result – with a poor understanding around the real resource and investment that goes into successful project. A lack of priority over what are often regarded as “soft skills’ has had a huge impact on the value and profitability of previous construction projects in this country, as well as a vital loss in man-hours which has had a knock-on effect around completion and meeting necessary deadlines.

Susan Pettit, Co-Founder and Director at Client Confident

“At a time, when the industry has witnessed the shake-up of the industry with the Carillion liquidation, and is now facing the mounting pressure of Brexit and the impact on profits, as well as a predicted hike of insolvencies, there is an immediate need to address working practices and improve communication skills.

“We welcome the Government’s pledge to invest £34m to improving skills in the construction industry, but it is high time the emphasis was also given to educating the industry about becoming better leaders and managers and accepting the“soft skills” are crucial at all stages of a project to mitigate against further risk on profitability.”

*Nine in ten respondents working in the construction industry believe that time and/or money has been lost due to poor communication in the sector. Respondents estimated that in the worse case scenario of a project they had worked on, an average of 15% of the overall value of construction project had been lost due to poor communication.  Based on the ONS Construction Statistics Annual 2017 (published October 2017) the value of construction output is worth more than £99bn – the figure of £13bn was calculated).