Large-scale construction projects are complex endeavors. They require extensive planning and coordination to turn a set of plans into a physical structure. Just like a symphony, everyone must synchronize their efforts to achieve success.
We’ve all heard of construction projects that have gone awry, with delays stretching for months or even years and budgets spiraling out of control. Take, for instance, the Denver International Airport, which exceeded its budget by $3 billion.1 This is an extreme example, but it’s not uncommon for projects to encounter inefficiencies and budget overruns, leaving them seemingly never-ending.
How does this happen exactly? What leads construction projects to fall so far out of sync?
A common problem affecting job sites involves back charging, which can lead to conflict and competition among subcontractors. In this post, we’ll explore the drawbacks of back charging in construction and how it could be hurting your company.
What is Back Charging?
Back charging in construction is when one company charges another for extra costs caused by mistakes, damages, or delays. It’s like asking someone to pay you back for the problems you think they caused. It might seem fair on paper— who wants to pay for someone else’s mistakes? But in reality, it can harm relationships and tarnish your reputation.
Avoiding back charging means fixing damages and mistakes at no cost. In the physically demanding world of construction, doing free work is usually a big no-no. But surprisingly, it can improve efficiency, increase profitability, and foster loyalty within your business.
The Ugly Side of Back Charging
Let me begin by saying this: sometimes, back charging is unavoidable. Certain companies may blatantly disregard your product or time and refuse to collaborate to resolve the issue.
But, in my 19 years of experience in the industry, I’ve noticed a troubling trend. More and more often, companies are resorting to back charging their fellow tradesmen for minor mistakes and damages while working alongside each other on a project. This practice has become widespread and fosters a “dog-eat-dog” mentality that plagues job sites.
Some companies view it as an opportunity to boost their profit margins, attempting to fix an underbid project or overrun budget.
In reality, relying on back charging to increase profits has the opposite effect. When companies work against each other instead of cooperating, it destroys job site progress and efficiency. It’s a literal time killer that breeds toxic relationships, competition, and animosity.
The Importance of a Solid Reputation
Prioritizing communication and compromise over back charging shows your company’s dedication to integrity— a vital trait in construction. Being known for honesty and reliability lays a solid foundation for your company. This reputation fosters trust with general contractors and clients, attracts hardworking employees, and sets you apart from your competitors.
A solid reputation is built upon:
- Delivering quality work
- Adhering to budgets
- Maintaining smooth timelines
- Effective communication
- Cultivating loyal relationships
With a strong reputation, you can secure contracts and maintain lasting partnerships within the industry. Top general contractors often prefer to hire subcontractors based on reputation rather than solely on bid price.
Embracing Kindness in the Construction Industry
From the beginning, PDI Drywall has embraced a culture of kindness and mutual respect. I like to call this the “Ted Lasso way,” inspired by the eternally optimistic soccer coach from the show Ted Lasso. This approach fosters open communication at every job site, transforming disorder into efficiency.
Avoiding back charges allows us to treat our fellow tradesmen with respect and empathy. Construction is demanding, and errors are inevitable. We address these promptly and transparently, setting a precedent for others to do the same. Embracing open communication cultivates a team mindset, leading to greater care and respect for each other’s work.
As a result, other trades see our drywall as an extension of their work, and vice versa. This mutual respect ensures smoother operations, enabling us to accelerate timelines even on the most complex projects.
I’ll Give You an Example…
As a drywall company, we often collaborate with sprinkler companies, who install automatic sprinklers for fire safety in multi-family buildings. Our drywallers must work carefully around their sprinkler heads, maneuvering large sheets of heavy drywall and messy drywall mud. Occasionally, they accidentally get drywall mud on a sprinkler head, requiring replacement. Similarly, the sprinkler company may need to adjust their pipes after our drywall is installed, requiring them to cut holes in our work.
To foster smooth collaboration, we’ve established a precedent: when issues arise, the sprinkler company notifies us, and we promptly fix any holes in the drywall at no cost. In exchange, they replace the occasional sprinkler head for free, no questions asked.
This open communication and mutual support have built a strong relationship based on transparency and understanding. Our approach eliminates the need for back charging and maintains a respectful atmosphere on the job site, enhancing efficiency and project progress.
Practical Steps for Fostering a Positive Work Environment
Here’s how to put this mentality into action on your own job site:
1. Encourage open communication
Instead of penalizing minor mistakes with back charges, foster communication by rewarding transparency. When you lead with kindness, other trades are likelier to return the favor.
2. Stay informed about your projects
Project managers should stay actively engaged on their job sites, keeping track of everyone’s progress. Regularly check in with all teams, not just your own, to address issues promptly.
3. Acknowledge mistakes
Accept that errors happen and damages occur. Rather than assigning blame, approach situations with empathy. Creating a positive work environment leads to happier teams and better outcomes.
4. Cultivate harmonious relationships
Large-scale construction projects rely on teamwork. Treat everyone with respect and acknowledge their contributions. Building strong relationships fosters maximum efficiency.
5. Be selective in hiring
Training new talent is often easier than correcting bad habits in experienced subcontractors. When bringing on new team members, make sure they’re willing to work within your processes and standards.
PDI Drywall: Experts in Efficiency
With almost two decades in construction, I’ve honed strategies for success in building multi-family structures. Our reputation for timely, cost-effective, quality work showcases our efficiency expertise. In construction, success hinges on positive relationships and a supportive culture.
As you reflect on your own company’s reputation, prioritize your long-term vision. Reactive measures like back charging fall short. Invest in proactive problem-solving for sustained success in future projects.
Reference:
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- https://www.freepik.com/free-photo/male-coworkers-doing-paperwork_10041076.htm
- https://www.freepik.com/free-photo/close-up-engineer-architect-shaking-hands_5075315.htm
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