How to Keep the Construction Business in the Wartime and Post-War Period

The Russian invasion of Ukraine has resulted in the tough economic situation in Ukraine. The construction industry is also facing a difficult period. The construction business is destroyed in the occupied territories and in the territories suffering from military actions. In relatively calm regions, declining consumer incomes and uncertainty about the future drive construction projects into stagnation. Therefore, despite the loss of homes by many citizens, the increase in demand is not expected in the near future. You will find out more about the industry development and the possibility of adopting outsourcing as a growth multiplier in the article.

Current situation on the construction market

Although all Ukrainians believe that the Armed Forces of Ukraine will win, it is still unknown how it will happen. According to GlobalData, the unpredictability of the situation, inflationary pressures and other consequences of the crisis will lead to the decline in real estate construction in Ukraine by 69.1% in 2022.

At the same time, the State Architectural and Construction Inspectorate (SACI) reports that the number of requests for work permits in the industry and certificates of commissioning of facilities has increased twice in May and June of this year. The National Bank of Ukraine reports that activities have resumed at more than half of the facilities started before the war. Meanwhile, investments in new facilities have not yet activated, although the development of modular construction has started.

Key market problems

The demand for real estate is expected to increase significantly after the war. However, it can be lower than supply because of the following problems:

• logistics disruption;
• inflation;
• exchange rate dynamics;
• increasing production cost.

The war has disrupted the supply chain of building materials, resulting in price increase. The economic downturn has led to inflation. Consequently, we can see the negative dynamics of the hryvnia exchange rate despite the support of international donors and the active policy of NBU. It forced sellers of building materials to raise prices in anticipation of further decline. A set of factors has increased the construction cost, which negatively affects the market in the context of low demand.

Finding new personnel and retaining the current ones is a headache for construction companies. Even before the war, a lot of specialists preferred to earn on facilities abroad. After the outbreak of aggression, an impressive number of those who stayed or returned went to the front. Therefore, the personnel shortage existing before the war has only worsened with its outbreak.

Outsourcing of construction works as a development multiplier

The market can be activated in different ways. There is a convenient tool: outsourcing of construction works, i.e., transfer of some functions under the management of third-party organizations. It substantially reduces the production cost for most companies.

Everything not directly related to primary business activities can be transferred to outsourcing. One can order contractors, equipment, personnel, accounting, information technology and related processes. An outsourcing company specializes in the performance of specific works, as well as has the necessary resources for this and the control system, which provides the best results.

Outsourcing reduces the production cost regardless of the facility. Owners do not have to control the purchase of construction and finishing materials; purchase, repair and replace tools and equipment; pay salaries and train staff. It reduces expenses and increases the margin. The released resources can be used for other purposes.

Outsourcing concept

To gain mutually beneficial cooperation, the relationship between the business owner and the reliable service provider should be based on:

• a clear work plan;
• approval of the budget;
• compliance with the deadlines;
• backing up of the relationship by the agreement.

The customer and provider have the same goal: to make money. Transferring construction tasks to contractors will allow businesses to gain a competitive advantage due to access to experience, technology and flexible personnel workload. Their outsourcing is always cheaper than performing them on your own, especially for large businesses. You pay for a package of services and don’t have to search for and retain executors. The fewer permanent staff, the lower the expenses and the higher the profit.

Benefits of construction work outsourcing by SUN ONE

The communication process takes place as follows: the contractor receives the order, draws up the budget for the task, forms the project team, calculates the number of personnel needed, and prepares the agreement specifying the deadlines. The outsourcing company provides the necessary equipment and specialists. It is fully responsible for the result and deadlines.

Outsourcing is suitable to construct residential complexes, office premises, shopping malls, supermarkets. It is beneficial for management companies, investors, building owners, general contractors, tenants, etc. Customers benefit from the following aspects:

1. the company focuses on a single activity area, which improves the quality;
2. the construction process is simplified because of the reducing amount of works, reducing workload and routine;
3. operations are allocated among several executors, which allows doing more in a shorter period of time;
4. an experienced contractor does the work as quickly as possible;
5. one applies professional equipment, which allows adhering to the technology.

If you are going to order construction work outsourcing, please don’t hesitate to contact SUN ONE. For 13 years, we have been working according to the highest standards, providing customers with outsourcing services of the highest level. SUN ONE offers:

• turnkey outsourcing of finishing works;
• builders on leasing terms;
• recruitment.

Turnkey outsourcing of finishing works includes activities of the building team at facilities: offices, shopping and business centers, hotels, residential complexes. Its task is to completely finish walls, floors, ceilings, install plumbing, etc. according to the statement of work. Engaging experts, you obtain fast, high-quality results, which are possible only due to the extensive experience of our building team.

Besides, one of the most popular services of SUN ONE is staff leasing. The customer obtains builders of the proper specialization, in the proper quantity and for the proper period. It enormously saves the company’s resources and time for recruiting, hiring, paying salaries, firing, etc.

In addition to construction personnel outsourcing, we select specialists according to customer requirements, namely provide classic recruitment.

SUN ONE selects personnel not only for the construction sector. We actively provide specialists for warehouses, factories, agricultural and industrial enterprises in Ukraine, hotels, restaurants and retail chains.