Risk Mitigation in Project Management for Trade Contractors

Risk Mitigation in Project Management for Trade Contractors

Risk is a part of construction, but companies are doing something about it with risk mitigation in project management. Without proper risk mitigation, the construction firm will face project delays, incur costs, and may even face litigation. Currently, 24% of firm’s projects face delays, 19% go over budget, and 11% result in legal disputes that can cost $3 million on average. Risk mitigation should be a top priority among all construction trade contractors.

In this article, I highlight several strategies that your trade construction firm can employ to mitigate risk:


Risk mitigation should occur throughout the entire life cycle of a construction company. This means that risk mitigation should begin during training and onboarding of new employees. And should continue throughout the employee’s tenure with the company. Proper training should include preparing employees to properly assess risk and teaching them the steps they should take to mitigate it. Depending on the new employee’s role at the firm, make sure their training programs are roles-based.  For example, office employees should understand emergency protocols governing the office and keeping an eye on the typical slip, trip and fall hazards.

However, construction sites can become much more hazardous with uneven terrain during different stages of the construction project. There’s also unused materials that move around on the job site, so it’s much more common for accidents to occur.  A few of the main hazards found on a typical construction jobsite include moving objects, noise, working at height, collapses, ladders, material and manual handling, asbestos, hand-arm vibration syndrome, slips, and falls. Remember, training doesn’t stop after on-boarding a new employee.  It should continue with every project.

Culture of Safety and Risk Management

Risk mitigation should be a long-term sustainable strategy for the construction firm. It must be embedded into the culture of the company. To be successful, a culture of safety and risk management must be fully adopted by top management and communicated to the rest of the team. Introducing risk mitigation in project management and these four steps create a culture of safety success.

Step 1: Lead by example.

Managers need to demonstrate a visible commitment to workplace safety daily if the workforce is to follow. Education is key, so managers can articulate safety policies and hold employees accountable to the same standards. Safety policies and procedures are essential for promoting a safe work environment both in the office and on the job site. And managers are important for improving risk mitigation in project management.

Step 2: Establish trust in the company hierarchy.

Managers can strengthen communication lines by establishing an open-door policy that encourages employees to voice their opinions about safety concerns. In turn, employees can hold their managers accountable for safety protocols. Creating a safety culture requires continual safety communication a two-way dialogue, managers and employees can foster a respectful working environment with improved morale and increased productivity. Without communication, the culture will develop a disjointed working environment with different rules and enforcement.

Step 3: Hire employees that take safety seriously.

Construction firms can look for future hires that understand safety protocols and committed to curbing potential hazards before they occur. Hiring managers should ensure new hires become familiar with Occupational Safety and Health Administration (OSHA) requirements. As part of on-boarding new employees, construction firms should develop training sessions to guide new hires to new educational safety levels. And these training sessions should be added to the risk mitigation in project management.

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Step 4: Promote company-wide involvement and participation.

At all levels of the company, management should enable employees to share in the cause, receive rewards and incentives for promoting a healthy and safety culture. Sharing knowledge and leadership should come from all employees. Not simply at top-down exercise.

Address risk early in the project

The earlier that risk is identified, and steps are taken to mitigate it, the less costly it will be and less likely it will be to affect the project schedule. As a project manager that represents a company with a culture and mindset to mitigate risk, developing risk mitigation in your project management plan is crucial. Here are 7 of the most common ways in very simple terms to mitigate risk on your projects.

Clarify the requirements

What does your client wants to achieve with this project? With that in mind, leverage all the available research such as feasibility studies, workshops, and techniques for each step and process to be detailed and committed to reaching a positive outcome. Scope out the work as it will pay dividends when you get it right.

Assign the Right Team

As with any project, your labor introduces all kinds of risk to a project, mainly due to foreseen and unforeseen availability and skill sets. Leveraging a labor time and productivity tool such as eSUB can help you retrieve historical project data to assign the best performing team for your new project.

Spread the risk

Risk transference is a useful risk management strategy, but carefully look for ways to manage risks jointly with other contractors or other stakeholders to spread out the actions and also the impact should the risk occur.

Communicate and Listen

Take all stakeholders and potential third-parties into consideration. Consumers, environmental parties and other external groups may end up having an unintended impact (positive or negative) on your project so involve them early and consistently.

Assess Feasibility

In terms of leveraging studies and test out ideas prior to move into a full construction build. This is a simple way of breaking your concepts and methodology down into phases and uncovering new issues that you can eliminate.

Test everything

Test everything such as materials, software, implementation plans, processes, etc. Veteran project managers will explain that testing gets cut out when timelines are under pressure. But, what’s worse. A project that is pushed out with overruns and over budget or few extra days committed to testing to reduce/eliminate risks.

Have a Plan B

Always have another plan because it’s always needed. This will include contingency funds, float on the plan, additional resources on hold, and potential scope reductions. Lastly, remember to get an agreement on tolerances and contingencies with your sponsor before the project starts.  Contingency planning is about being prepared to implement quickly.

Constant communication throughout the project 

The nature of the construction industry is that everything is constantly changing. Therefore, accurate and up-to-date information is vital. This information comes from constant communication between team members using mobile cloud-based construction solutions. This construction software allows everyone to be informed as information arises and changes are made that affect the project or its stakeholders. For example, the Project Manager can load email addresses of all project stakeholders for quick communication.  All public and private correspondence can be easily tracked, stored and retrievable in a fully searchable database in the cloud.  Alerts can also be sent with a click of a button to all stakeholders at the job site. So emails regarding changing conditions, events or hazards are traceable and safe.

eSUB’s construction management software bridges the gap between the field and the office to deliver visibility. Job site staff needs the mobile tools to capture data in the field to initiate activities in the office. Today’s subcontractor-designed mobile software enables two-way communication. So the Project Manager has a clear window into what is happening in the field. And they can proactively address issues and keep projects moving forward.

Employ a thorough risk assessment and mitigation process

Most construction professionals agree that less than half of the construction firms do employ a rigorous risk mitigation strategy. Which contradicts the construction companies reporting that they employ some form of risk mitigation in project management practices. However, many industry professionals who have already adopted a risk mitigation process believe that the monetary savings from employing this process will be the driving factor for wider adoption. The leaders of risk mitigation processes employ rigorous risk assessment. They start at the onset of any project and continue to assess and mitigate risk throughout the project life-cycle. This process may require continuous meetings to check in with all team members and ensure that risks are being assessed, communicated, and properly mitigated.

BIM technology can lower risk

BIM allows for issues to be worked out before actual construction, which eliminates unforeseen risk and also improves safety. 71% of surveyed construction professionals agree that BIM helps with risk mitigation in project management. BIM encourages the team to be more extensive and detailed in their planning which helps to identify and mitigate risk. BIM also encourages collaboration and integration between team members for effective planning and risk mitigation. eSUB seamlessly connects to Autodesk BIM 360 Docs or PlanGrid drawings to deliver an easy-to-use tool for drawing management to subcontractors. Construction operations staff have access to the latest 2D drawings or 3D models depending on the program connected to eSUB whether in the office or the field.  Get ahead of the costly rework by ensuring your teams always have the latest plans in the field.

Avoid litigation

Litigation is a time-consuming and costly process that must be prevented if possible. To take steps to avoid litigation, a construction firm must look into all potential partners and project team members and check their prior work experience for any litigation habits. Litigation can also be avoided by having risk mitigation in project management and protection technology in place should your firm come across a problem that cannot be solved by the project team.

Conclusion: Risk Mitigation in Project Management

Risk mitigation in project management for trade contractors is necessary for controlling the cost, schedule, and scope of any project.  Risk mitigation must occur at the beginning stages and throughout every project phase.  However, it must first be embedded in the company’s culture – leadership to front-line employees need to champion the cause. The payoff is a more profitable project and company with a better reputation for safety.  The choice is yours the next time schedule pressures demand you to make a decision on what to scale back.