Silver Linings

With all the downside sentiment in the industry today it might be hard to find some upside as a counter balance. The market is distinctly flat within most sectors and a recent quote from BCI Media Group stated " while supply pressures continue to build in many sectors of the market, it is highly unlikely there will be a sustainable increase in building construction in the short term'. However in the same article it did mention $17.3 billion in total construction starts for the last 3 months. Which is actually an increase of 16% from the last reported period. That is still a large amount of construction. Retail construction has also bucked the trend as large multi national companies with ready access to finance have continued to build as they fight each other for market share in the competitive retail environment.  

Positive sides to the current economic climate are most definitely evident. I recently attended the AIQS Infinite Value Awards in Melbourne at which Conduit Recruitment was a sponsor. On talking to a number of Directors of QS companies, positive views were abundant and matched the vibrant and ebullient atmosphere of the evening.  

Some positive developments and outcomes of the current challenging market within the QS Industry would include the following: 

Innovation

In a strong market lots of energy is put into sustaining growth and meeting the demand. Keeping the wheels on you could say. However in a slow market more energy is put into refining services so that the outcome is the same but is achieved at a lower fee or income. Technology is developed and office procedures are refined and manipulated. Why are these changes and innovations not made during the good times - well perhaps the focus and scrutiny are not there. These innovations are also seen within the industry at large as different building techniques are created, different materials are tried and different methodologies, perhaps suppressed in the past, are pushed to the front. The industry as a whole jumps forward and will only benefit from the changes.

Diversification & Efficiencies

Due to the slow down in building starts the QS service has had to move into other market sectors that may have not been a priority before. These would include infrastructure, mining, oil and gas, rail and logistics. These areas are not new to the QS service, but it would have to be said they have been more prominent in the service offering in the UK and Europe. They were not on the radar before and the expertise was not available and hard to secure. Now companies have had to move into these areas as a necessity as their usual income streams have slowed. Companies have opened divisions and expertise has been sort and acquired. The companies that have implemented this change will have a more rounded and complete list of services on offer moving forward and will carry these new income channels into the future. The Australian QS service has needed this diversification for a while and it was too limited to a few specialist companies. QS companies are also being asked to engage in other non traditional services such as Claims Management and Life Cycle assessments. All growth in these areas will add to companies' repertoires.  

Recruitment Rationalisations

Downsizing is not fun and is usually going in the wrong direction to the business plan! However a downturn does provide a chance to upgrade the team when talent, that may not have usually been on the market, become available. There are also major opportunities to rationalise the recruitment process. When the market is buoyant and the skill shortage is heightened, companies are more willing to pay recruitment fees for their new hires. They need staff numbers and they need them quickly. However a slow market allows companies more time to focus on cost saving strategies for their recruitment processes. These can include appointing internal recruitment consultants that have left the agency environment as well as growing their networks through social media strategies. However, it has to be said that the effectiveness of an in-house system is directly proportional to the skills and abilities of the internal recruiter. Selecting the right person is extremely important as the advantages mentioned above will be lost otherwise. Also, strategic hires and 'hard to finds' will always benefit from the involvement of well entrenched agencies as multiple sources are needed to track down the right person.  

Training Time

Training schedules may suffer in the good times. They shouldn't but, let's face it, business travels at warp speed these days and deadlines take priority. But I hear a lot these days about the reinvigoration of QS training programs within firms. There is still a big shortage in the commercially astute, client facing, project adept Senior QS. It's wafer thin in Australia and when the older guard move on, which they are with all these acquisitions, the shortage will be critical. Time to start growing them from within. It's an investment that will bring returns when the market turns and it looks like many firm have adopted this philosophy. 

There is no doubt that times are tough. But there are lots of positive signs that point to an embellishment of the QS service due to the slow market conditions. Through adversity often comes enhancement. 

Written by Adam Walker for the Building Economist