Quality Management in Construction

How quality management in construction enhances the financial stability of construction companies

The financial stability of construction companies should always be a fundamental consideration for any client embarking on a construction project. Yet, as anyone working in the industry will appreciate, there has never been greater pressure on contractors to adopt more risk and deliver more for less. Unfortunately, if you are unable to do so – there is a company waiting in the wings to step in. 

In the highly competitive trading environment, the pressure to meet challenging key dates coupled with project budget constraints increases the risks construction companies face, which in some cases could compromise quality. Unfortunately, there is an attitude or approach taken where “there is not enough time to do it right, but we have to find time (and money) to put it right” 

However, recent industry news headlines, trending in the UK construction press highlight a stark reality: the cost of rectifying defects in buildings outweigh any build cost savings due to delayed completion and poor-quality standards.   

In this article we explore how construction companies are blaming revised delivery targets and downgraded profit notices on financial shortfalls stemming from the need to address latent construction defects. 

And how that could have been avoided in the first place. 

The ripple effects of compromised quality 

The construction industry is a key cornerstone to the UK economy, not just in building infrastructure but in economic stability and growth. Yet, the sector is facing a significant challenge.  

Increasing numbers of construction companies are revising their delivery targets and downgrading profit forecasts.  

Why?

A legacy of buildings hampered by construction defects that are costly to rectify. 

These defects often go unnoticed until after the projects are completed and occupied by building users.  However, once defects are notified, construction companies have a contractual obligation to rectify them, creating additional financial burden and potential reputational damage.  

Economic factors including higher material and labour costs, plus inflation mean that it’s far more expensive to deal with defects in the months and years following the original project completion.  

So it is hardly surprising profit forecasts take a hit. 

The cost of falling short on quality 

The financial implications of substandard construction quality shouldn’t be underestimated.  

Contractors don’t just have to deal with the direct costs of rectification but, in some cases, they also face claims and potentially even legal action from dissatisfied clients. These financial challenges are compounded by a loss of market confidence and reputational damage, which can be devastating.  

When combined, projects that have contributed what might have been marginal profit gains during the construction phase can easily become significant losses for the business to absorb. 

And let’s remember, the impact extends beyond individual construction companies. When companies fail to meet expected quality standards, trust in the entire industry is damaged – something that’s bad for everyone.  

A constructive outlook: focus on quality from day one 

When you take a helicopter view of the issue, the solution seems straightforward: prioritise quality from the outset.  

Investing in quality at every stage of the construction process, from feasibility, design, procurement and delivery is not a cost to be cut. It’s an opportunity to minimise the risk of defects and positioning responsible construction companies as a credible choice for clients who care about the longevity of their projects. 

High standards in building quality ensure safety, sustainability, and longer lifespans of the built environment, critical for securing future contracts but also for engendering a positive perception of individual construction companies who consistently refuse to compromise on quality. 

Adopting robust quality control systems throughout the construction process must be non-negotiable. From comprehensive staff training, to selecting reputable suppliers and materials, and implementing project management practices that focus on quality as much as timelines and budget, an end-to-end commitment to quality will, ultimately result in improved performance, reduced risk andensure financial stability of contractors. 

Cultivating quality starts with industry leaders 

Industry and company leadership is crucial in embedding a culture of quality. At an industry level, leading figures must champion a commitment to raising standards – without exception.  

Clients must accept there is a difference between cost and value. The lowest price doesn’t guarantee the best value or the desired outcome. Apportioning disproportionate risks upon contractors often results in unsustainable financial stress. 

At contractor level, business leaders must set clear expectations and allocate adequate resources to quality control. Equally, they should champion the benefits of high-quality construction within their organisations and the wider industry, encouraging a shift in mindset from viewing quality as a compliance requirement to a central strategy for a sustainable and profitable business. 

Building a sustainable future 

The UK construction industry stands at a crossroads. Construction companies who choose to invest in quality are not just avoiding financial pitfalls in the years to come but are paving the way for a more stable business future.  

Quality is not just a compliance measure but a strategic investment in the future. As the industry evolves, those who place a premium focus on quality management will likely lead the market, setting new standards for excellence and sustainability in construction. 

Evolution5’s building contracting service 

To discuss your construction project, including how to maximise your budget without compromising on quality, contact the team today. Just click the button below or call 023 8040 5073.