Thought Leadership

Homebuilding Today Is a Risky Business

It has been reported that 2017 was a vigorous year for the new home construction industry. CNBC reported, November statistics single-family homebuilding and permits in the U.S. climbing to highs not seen in 10 years. Unfortunately for builders, the market for new homes has returned without the workers to build them. The recession of 2006-2011 resulted in a mass exodus of tradesmen with approximately 30% of construction personnel forced to find employment in other industries. The most recent Conference Board study shows construction workers are ninth on the labor shortage index—worse than 91% of all other industries.

More than just a body count, the industry lost people with skills and experience. Labor obstacles and the growing demand for new homes creates an environment where projects are rushed, shortcuts are taken, and quality gets lost. Producing a substandard product is the imminent danger that puts net profit, reputation, and future sales at risk.

Risk mitigation tools and techniques are essential in this climate. Using technology and industry specific software is an effective strategy for capturing and managing all activity and information without any additional personnel or time. Realtime access to plans, schedules, issues, and vital documents results in increased efficiency and productivity. Incorporating quality inspection checklists throughout the product lifecycle can build a consensus of what is important and help insure it’s done right the first time. “A stitch in time saves nine” is not just an old adage. Quality and performance industry leader Glenn Cottrell offers compelling arguments that $1,200 invested upfront in proactive quality measures saves $7,200 after the closing.

What if the return on investment was only a little better than breakeven (it’s not – but let’s say)? Would you still focus on quality? We are rapidly shifting into a millennial world heavily influenced by consumer reviews and social media. Paul Cardis from Avid Ratings reports that “millennial homebuyers undertake far more social home searches, seeking input from friends, relatives, and neighbors.” According to Adweek, 93% of millennials rely on blogs and consumer reviews before making any purchase.

Social media platforms are also used increasingly as a vessel to escalate consumer complaints. An unhappy homeowner no longer faces the big builder alone. These platforms are convenient, free, and public—empowering an individual to transform into a collective with a voice that can be heard across the nation. Customer satisfaction is ever critical.

After all, we’re all in the customer service business. A continued conversation needs to accompany a homebuyer from purchase to closing and throughout the warranty period. Software homeowner portals, for example, provide a convenient and effective way to communicate purchase information, construction updates, progress images, online documents, and links to local resources. They also provide an online process to submit and review service issues. BuilderIQ notes that buyers “start to regret” the purchase when they don’t hear from their builder during the post-sale process.

We encourage builders to get proactive! With the current climate of high demand handicapped by a skilled labor shortage, it is crucial that builders take advantage of tools that help them bolster quality and eliminate issues before they happen. Invest in software that helps you build a better product, improve communication, yield higher customer satisfaction, and protect your reputation, as well your bottomline.


Troy Warr has been a software engineer at Computer Presentation Systems for more than 25 years. He is the lead developer for CPS’ construction scheduling software, FieldCollaborate, and warranty management solution, WarrantyWatcher. Troy has helped the homebuilding industry continually adapt management procedures to take advantage of contemporary tools and live processes and is frequently asked to participate in discovery, planning, and implementation sessions.

By | 2018-01-22T20:08:49+00:00 1/22/2018|

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