COVID-19 disruption and fallout—from distanced, isolated staff and no-touch business development to lost revenue and lingering market uncertainty—have many in the construction sector longing for their pre-pandemic existence.
Precautions and vaccines are accelerating the return to some degree for firms, owners and other AEC participants, but there’s a growing sense that workplace adaptations forced by the coronavirus are innovations long needed and here to stay. “A lot of it was there but not adopted,” Danielle Dy Buncio, CEO of virtual design consultant VIATechnik told attendees of ENR's Top Young Professionals conference in February.
“COVID was the light switch, and overnight, the game has changed and we need new ways to play it," she said. "There’s no going back to the pre-COVID workplace.”
Recent business surveys show the emerging transformation but also uncertainty and debate over changes ahead. In a March Prudential survey of 2,000 self-identified workers in all business sectors, only 13% said would opt for full-time on-site work, and one-third would not work for an employer requiring that presence. The respondents said 34% of job seekers want to work remotely and 42% graded their employer’s culture focus a “C” or lower. But two-thirds of respondents also see in-person interactions as key to career advancement.
In an April survey by tax consultant Marcum of 251 middle market CEOs, including those in construction, 82% expect to allow a partially remote workforce post pandemic. But in a CEO survey last month, management firm KPMG said just 17% of 500 responding chiefs in large corporations in 11 business sectors will downsize physical footprints and only 30% will commit to a majority of employees working remotely between two and three days per week.
Gregg Schoppman, principal at industry management consultant FMI Corp., says the pandemic forced AEC companies to rethink policies, practices and procedures that have been the norm for years, and many benefited from that reflective exercise. While profits rose last year for many firms as costs dropped, “people had to really think about how to make money and how to be very deliberate about the execution,” he says.
Design and construction firms, owners and others now are weighing options in accommodating staff and business needs.
“We will not have a firm-wide mandatory return to the office,” says Mark Edwards, CEO of Texas designer Halff Associates. “The percentage who return will vary depending on job description, individual independence and office and team requirements.” But the firm won’t cut its office space. “We are maintaining or increasing it so every employee has their own space to preserve our culture. This will be a competitive advantage in the future. What’s good for our people is good for business, that’s the bottom line.”
“Offices are where collaboration happens and are vital to our culture,” says architect Gensler co-CEO Andy Cohen, who notes internal research showing a 37% drop in collaboration “when we’re not together.” Greg Kelly, CEO of designer STV, echoes that, stressing that “we are always best when we can be together.” He says the firm anticipates returning to its offices after Labor Day. “We are still working on a plan as to how best to make this happen,” Kelly says.
“All staff learns from the shoulder-to-shoulder with leaders and colleagues and immersion into the processes, policies, culture and collaborative work environment,” says Gerald Salontai, CEO of engineer Hull & Associates. “The quicker this happens, the more they can be effective and bring value.” About 25% of Hull staff prefers to work remotely, with office trips for “occasional” team, project, client or company meetings. “This will cause changes in our real estate portfolios, office space and workspace layout,” he says. Quality control is at higher risk from a remote workforce, he contends. “Not having teams in close proximity can lead to things falling through the cracks on a given project,” Salontai says.
“COVID-19 was the light switch, and overnight, the game changed and we need new ways to play it. There’s no going back to the pre-COVID workplace.”
—Danielle Dy Buncio, CEO, Virtual Design Consultant, Viatechnik
Laura Ramey, chief people officer at TRC Cos., says the firm “was an early adopter of the [work-from-home] model and had a digital foundation in place before the pandemic,” allowing TRC to quickly transition office-based staff “without large lapses in productivity or employee access.”
Employee polls indicate most want to continue with a hybrid work from home and office setup post-pandemic, “and these numbers have remained consistent over the past 12 months,” she says.
AECOM's workforce voiced similar sentiments, CFO Gaurav Kappor said April 22 on a forum sponsored by consultant AEC Advisors. He said two surveys of its 50,000+ global workforce over the past eight months showed that 78% prefer a "flexible flex work arrangement." He also said space "reductions" are planned, with 65% of company leases expiring in the next four years, noting that infuture workspace planning, "we are insuring teams have the right technologies and WFH kits."
Priya Kapila, FMI compensation practice leader, said in a recent article, “It’s no surprise that many engineering and construction executives are asking, ‘How do we continue to monitor productivity, measure performance and reward employees who used to be in the office but aren’t anymore?’” Long-term solutions “are largely unknown, particularly given the uncertainty as to whether wide-ranging remote work will continue,” she says. One concern Kapila notes is that, in some cases, employees are missing important team engagement and communication developments, “so remote work is actually playing to their weakness.” FMI has more research underway among contractor CEOs, she says.
"There are challenges in development of staff now, especially those in their 30s who seek career advancement and ... underlie a lot of capability and billability are not feeling 'invested in' ... nearly as fully, if at all, as when in the office," says Ted Lower, CEO of industry management firm LVNV and an HR practice consultant to AEC advisory company EFCG.
According to Lower, firms intend to have "essentially all offices open for partial/rotating occupancy by 50% of employees by summer, with most having 25% to 35% occupancy by June." Many firms with offices in smaller, non urban locations "are well past that already," he says.
With a fourth-quarter COVID wave looming dependent on vaccine strength and variants, "having the hybrid environment carried 2Q, 3Q and into the 4Q is viewed as the best course of action, as it is possible that year-end could involve significant office closure mandates," Lower contends.
Hybrid work arrangements are seen for up to 40% of design firm Stantec staff, so the firm turned to virtual reality cameras and the internet to do field reviews remotely. It’s not foolproof, with the company relying on the contractor to not intentionally skip over items, says Steve Fleck, chief project officer. From rebar to earthwork inspections, “there is nothing you can’t do that way,” he says. “You get to see every nook and cranny.”
Fleck acknowledges that “getting people to remobilize in the office is actually a much more difficult exercise.”
Pay, Career Risks?
Some research sees pay cuts as a looming option for remote employees, with historical evidence “suggesting a negative connotation attached to telecommuting and a belief that remote employees do not work as hard,” says Kapila. She says the pandemic’s work from home boom “has helped dissuade this mind-set.”
Harvard Business Review researchers, in a March article, cite one survey that about 44% of employees would be willing to cut pay by 10% “to work remotely forever.” But they urge employers to adopt ”a leader-supported declaration of organizational expectations related to remote work.”
Michael McKelvy, President and CEO of Gilbane Building Co., says the company has learned this last year to revise past notions that work from home employees “are probably not doing a really good job.” He says the firm “still would like people to be in the office, but our understanding of that difference is much greater now than before.”
Even so, there is growing statistical and anecdotal evidence that remote work poses risks for women’s careers. Management consultant McKinsey last summer found in all sectors that women represented 39% of global employment but 54% of job losses. The consultant said its studies dating to 2015 had never recorded more women opting out of the workforce than men, until last year.
The U.K.’s latest annual mandated salary gap survey for all employers of 250 or more, released in April, revealed pandemic effects for women at some construction sector firms. COVID furloughs and added child care duties may “set some careers back by years,” according to industry experts. Andra Kidd, named Hull chief operating officer last year, notes efforts by the firm, not unlike others, to boost time flexibility and mental health support “to create work-life balance that, where possible, will continue beyond the pandemic.”
Face-to-face collaboration remains critical, but virtual options won’t disappear, says Scott Sass, national leader of DPR’s special services group, noting an uptick in workforce engagement. “Employees now feel really connected to the pulse of the company and to our strategies,” he says.
That link extends to college campuses, where distance learning has generally been the norm this past year, and Zoom the connector. “Students are much more willing to meet in Zoom than in person,” says David Gunderson, associate CM professor at Washington State University. “I’m not sure if it’s a convenience factor or if there is some intimidation removed.” He says he’s “basically given up on official hours. We’ll meet whenever we’re both available now.” Use of virtual platforms to host industry experts has also boosted learning options at the school, hampered in the past by its five-hour drive from Seattle.
Zoom will remain a go-to platform, but a recent American Council of Engineering Cos. (ACEC) member survey said nearly 63% of respondents have found or seek alternatives for remote interaction. “Architects and designers are visual thinkers, and working entirely in the digital space has expanded our arsenal of, and fluency with, digital collaboration tools,” says Gensler co-CEO Diane Hoskins.
From the pandemic’s early days, DPR Construction leaned on its technology and innovation team for ways to keep jobs moving ahead successfully, specifically focusing on safety, productivity and collaboration. “We came up with more than 200 solutions—the most we’ve ever done in our history,” says Kaushal Diwan, DPR’s national leader of corporate innovation. While many were quick fixes to virus-related issues, he expects to see some continue. The company piloted the use of augmented reality headsets, connecting inspectors with project teams in the field when lockdowns restricted travel.
“I think that you’re going to see us continue to use wearable technology to help people be cognizant of where they are in relation to each other,” says Gilbane’s McKelvy. The Nevada Dept. of Transportation ramped up technology in its public-facing events. With open meetings barred, NDOT used web-based streaming services for virtual meetings, creating a higher standard for gathering public input and generating community support, says spokesman Tony Illia. “The pandemic has forced us to evaluate and reconsider best practices.” The agency also has developed a long-term telecommute policy for most of its administrative and management staff.
AEC sector participants and observers also see key COVID-19 changes in business development. An ACEC survey in March said nine out of 10 respondents would allow travel for client meetings in the next six months, but only 50% will OK it for events, which must not exceed 20 attendees. Jennifer Newman, principal of Elevate Marketing Advisors, an industry consultant, notes two client design firms that “had to do a major pivot in 2020, implementing a digital strategy and new websites and brands to fit the new virtual environment.”
While cuts in travel and other business development and staff support pumped up some company profits, “at the same time, firms have scrambled—and often spent unbudgeted funds—to ensure their workforce is equipped to work remotely,” says Elevate founder and principal Doug Parker, who also is current president of the Society for Marketing Professional Services. He says “accessibility to decision makers has been better than I can remember in my career” and that AEC firms used “any available time over the last year” to reexamine business development strategies.
Halff’s Edwards cites the firm’s use of “creative ways to stay in front of clients, such as providing virtual learning opportunities on topics that will allow them to become more efficient.” To compensate in a firm “built on a foundation of face-to-face,” Stantec effectively drew on banked goodwill, says Fleck. But the firm also understands it will need to start making live “deposits” to maintain those relationships, he says.
Alexander L’Heureux, CEO of design giant WSP Global, terms the pandemic “a global tragedy, but … also an opportunity” to change and improve. “It’s no longer an agile workplace we need to design but an agile working environment, which is very different. We need to decide why we want workers to come back and what we want them to do,” says the executive.