AGC’s Surety Bonding and Risk Management Forum and FMI Corporation recently released a study examining the key risks contractors face in today’s business environment and various ways to mitigate those risks.
The “AGC/FMI 2016 Risk Management Study”, a joint effort of AGC and FMI, collected responses from 83 best-in-class companies collectively generate approximately $50 billion in industry revenue annually. Some of the key survey findings suggested the following:
Today’s construction risk environment is drastically different than it was five years ago.
Skilled craft labor shortages, contract language and subcontractor default are top risks in today’s construction industry.
Construction firms are managing risk differently today. Of the overwhelming majority of respondents who said they are managing risk differently, 82% reported they are implementing new risk management tools and strategies, and 55% are providing risk management-specific training. Almost 40% of these respondents are also cre¬ating positions for new risk management per¬sonnel and leveraging broker relationships more effectively
Risk management effectiveness varies. According to the study, although 90% ofparticipants indicated a shift in their risk management approach, only 17% of respondents perceive their risk assess¬ment process as effective. Almost 50% of sur¬vey respondents think their risk assessment process still requires improvement, and 35% consider it ineffective.
Mitigating and managing risk has become a strategic priority.
View the full analysis of the survey’s results here.