It feels like parts of the world keep spinning, while others are set off their axis. You may have projects to complete, while your suppliers are considered non-essential. This can cause backlogs in your work, as you try to find ways to keep meeting client expectations as you can. Here are a few delays you can expect related to COVID-19, now and for several months into the future.

Inspections
Many construction projects require inspections at various points in the process. Since it will be more difficult to locate qualified people able to do the inspections, you should plan for significant delays in the inspection process. Right now, you are more likely to notice a slowdown because fewer people are working and more people are trying to minimize their contact with others. Overtime, as more industries open up for business again, the construction industry may face a glut of projects that need to move ahead as quickly as possible. This means that it may take you longer to get permits as well.

Labor

Finding labor has been tricky for several years, due to construction’s labor shortage. But finding qualified workers is going to be even more difficult right now. This is particularly true in fields where you were already having to pay more and search longer to find a qualified person ready to take on the project. Moving forward, you may need to prepare to offer higher rates as you can and start your search for work on specific projects further in advance. This can help you to avoid significant delays while you try to secure a subcontractor.

Materials
Since much of the world is currently dealing with COVID-19 or its aftermath, you can expect a number of delays tied to materials. If you typically outsource a lot of goods for construction from places like China, you may have already noticed a significant slowdown in the rate that you can receive them. It’s also worth keeping in mind that shipping is also taking longer on almost all deliveries that are less than a truckload. To mitigate this issue, you may want to source materials that are closer to your location, so that shipping times are less of an issue for you. Investigating your options to pick something up can also save time.

Tool and Equipment Rentals
Finding the tools and the equipment you need may be more difficult whether you are trying to buy or rent. Most retailers, even those deemed essential, are limiting their hours and restricting how customers can make purchases to reduce contact. Be prepared to order online and wait for shipping if needed. Once construction moves back to regular speed, you might have a harder time getting equipment rentals as everyone tries to catch up on delayed projects. If you can’t buy the equipment that you need, you should see if there is a way that you can book reservations earlier than you usually would.

Tips to Smooth the Process
Although running over time on your project is pretty common in construction, COVID-19 is making those typical delays much longer. The last thing that you want to do is lose money or reliable clients because you failed to estimate how long you need. You can minimize your chance of problems if you:

• Revise estimates on time and pricing based on the most current data
• Add extra time for each step of the project
• Reconsider projects with equipment or materials that are difficult to source
• Look for other ways to trim time off projects without cutting quality

Regular communication with your clients will help assure them that you are continually working in their best interest.

COVID-19 is changing the world as we know it, with significant effects for your construction workflow. Finding ways to predict problems so you can solve them in advance is how your contracting business survives. For more information about preparing for your contractor licensing exam, contact CSLS today!

Construction has had a labor shortage since 2012. But this year, it’s only got worse. While this may seem like an absolute win for someone new to the field, it’s more complicated than that. It’s true that entering a field while it needs skilled workers can make it easier to find work, but you’ve got to balance that with the project delays and struggle to find other workers. Here’s how a labor shortage can affect your future business plans, and why it’s still a good idea to get started now.

How Is Construction’s Labor Shortage?
If you aren’t living it, it may be difficult to understand the dynamic of the construction labor shortage. The pandemic of 2020 has led to millions more people who are unemployed. You might think that this could address the shortage within a month. However, the major issue with the construction labor shortage is a lack of skilled workers, not just labor in general. This means that even if a government program could flood the industry with millions of new workers, they may not be qualified to do the work required. The solution takes years to implement, especially for people who are just starting in the industry.

What Does the Shortage Mean for Contracting Businesses?
Construction may have slowed down a little in the early months of 2020. But now, it is back with bigger demands. The housing shortage in California in recent years has yet to be resolved, leaving millions more in need of affordable housing options. Wildfire damage spawns recovery efforts. This creates a glut of possible construction projects in a variety of fields within the industry. It also creates problems for contracting businesses, especially those that struggle to find qualified employees or subcontractors to perform certain kinds of tasks. After all, if you can’t find the workers, you may not be able to complete the job.

What Does It Mean for Employees?
Ultimately, the shortage may mean that there are excellent opportunities for employees or people who are interested in building a business in construction over the next few years. When business owners can secure projects, but they struggle to find people who will do the work, the ones who can will be in higher demand. This translates into higher wages and better benefits, on top of more power for employees to bargain. Of course, that assumes that each project will have enough people available to complete it. This is why a majority of contractors are currently reporting delays and even canceled projects, on occasion.

How Could the Shortage Change Over Time?
Although the labor shortage has waxed and waned, it has remained a noticeable problem for almost a decade. This year has forced many businesses, large and small, to invest in ways to tackle it for good. The most practical solutions involve:

Resolving the extensive backlog of construction projects

Helping interested workers gain the skills and experience they need for the jobs most in demand

Balancing the needs of the population with the dynamic of the economy, as far as possible

At present, many organizations are investing in construction education. The goal is to increase the number of people in construction, while also ensuring that they have the skills needed to fill the gap. Within 10 to 15 years, the shortage may be gone or mostly managed.

Is Now a Good Time to Start in Construction?
Experts have been talking about construction’s labor shortage for years. And since many people are old enough to remember the housing crisis of 2008, it’s easy to conclude that it might be too late to start now. In fact, now is one of the best times to invest in construction. Building a portfolio of education and experience to take a position that’s high in demand requires years. But the sooner you start, the sooner you can take advantage of that demand.

Construction’s labor shortage gives employees lots of opportunities, and businesses the responsibility to meet them. To find out where a construction career could take you, visit CSLS today!

Payroll taxes are one thing that you’ll need to pay as part of your contracting business. As of September 1st, the federal government gave businesses the option to decline withholding these taxes from employee paychecks, as long as they meet certain requirements. There are benefits to this program, but also possible drawbacks. Here’s what you need to know.

What Are Payroll Taxes?
Payroll taxes are a percentage of an employees’ wages that must be withheld. These taxes come on top of withholding for federal or state income taxes. The payroll tax, which runs 6.2% of most employees’ wages, helps to pay for programs like Social Security. Employers are required by law to withhold it from their employees’ wages. People who are self-employed must pay these taxes either as part of their quarterly estimated taxes, or at the end of the year.

What Is the Payroll Tax Deferral Program?
The payroll tax deferral program issued by President Trump’s executive order in August defers payment of these taxes from September 1 through December 31, 2020. The program functions entirely on a voluntary basis. This means that employers must opt in by holding off on withholding these taxes from employees’ paychecks. It’s worth noting that this program is unique from other payroll tax holidays that have been enacted in the past. Unlike those times, this program is a deferral. In other words, any employer that chooses to participate in this program will need to withhold more taxes from employees’ wages to make up for it by April 30, 2021.

How Can the Program Affect Businesses?
Since the execution of the payroll tax deferral program comes primarily through executive order, some businesses aren’t clear on how they should use it. Employers aren’t required to take advantage of the program, but they also aren’t required to get employees’ support in order to implement it. Many businesses have chosen to participate in the program, in the hopes of ensuring a slightly higher wage for employees during difficult times. Other businesses have decided that the complication of determining eligibility, which may fluctuate for employees with variable income, makes the program too difficult to be worthwhile.

How Can the Tax Deferral Affect Individuals?
For those who qualify for the payroll tax deferral, a 6% temporary increase in paychecks could be a significant benefit. The program is limited to individuals making less than $4,000 every two weeks. This covers the vast majority of workers across the country. Employees should consider how paying it back may affect their paychecks in the first part of 2021. The federal government has made businesses that opt into the program responsible for withholding the additional taxes to cover for the deferral. This may mean that they have to enact new policies for employees who quit, to ensure that those taxes are repaid.

Could the Tax Deferral Program Change?
Given that the program came about through executive order, it’s possible that there may be additional legislation to support it, extend it or make it a true tax holiday. People who don’t pay much attention to the changes in tax laws may not know how common it is for a policy to be extended or changed right before it expires. If the government chooses to, the tax deferral could become a holiday that doesn’t need to be paid back. However, employees should pay attention to the news, and be wary of assuming anything will happen until it’s written into the law.

Figuring out taxes is something that you’ll do as an individual and a business owner. With the latest information, you’ll make wiser choices. For expert exam preparation on your way to becoming a licensed contractor, contact CSLS today!