Managing Professional Liability And Construction Risks In The Millennial Age

Architects, engineers, and design professionals face ever-increasing pressure in this instant-gratification Millennial Age to complete construction projects as quickly as possible. As we know, however, fast is rarely best.

Firms that ignore how to effectively manage their workforce in this Millennial Age can expect to experience a significant increase in claims for professional liability and construction defects, according to Ms. Zoe Schneider, an expert on Millennials in the workplace. Ms. Schneider spoke at the ClaimsMillennials Construction Litigation Management Alliance (CLM) Professional Liability Conference in Boston in July.

More than one-in-three American labor force participants (35%) are Millennials, making them the largest generation in the U.S. labor force, according to a Pew Research Center analysis of U.S. Census Bureau data.

As of 2017, the most recent year for which data are available, 56 million Millennials (those ages 21 to 36 in 2017) were working or looking for work.

This represents more than the 53 million Generation Xers, who accounted for a third of the labor force. And it was well ahead of the 41 million Baby Boomers, who represented a quarter of the total Millennials surpassed Gen Xers in 2016. The percentage of Millennials in the workforce will increase to more than 50 percent by 2020, according to the Pew study.

So how can construction industry professionals protect themselves from liability in this Millennial Age of construction when the popular belief remains that Millennials lack the construction industry’s historic commitment to excellence, attention to detail, and job stability that will permit projects to move toward completion at an every-increasing pace?

Dispel The Millennial Myths Among Senior Management:

Companies must make a firm commitment to dispel the popular myths about their Millennial workforce, especially among senior management. For example, Millennials are not lazy, and numerous recent studies debunk this popular myth.

According to a recent study by Psychology Today more than 70 percent of Millennials say that they want economic job security, but they are not motivated by it. Haydn Shaw, a renowned generational expert, found that most surveys show that Millennials rank base pay as the most important factor in selecting and staying in a job, just as the other three generations do. A paycheck, however, simply doesn’t motivate Millennial workers like it may have done past generations.

Younger workers come from a “connected” generation that values collaboration, teamwork, and social opportunities over money. Today’s Millennials are motivated more when they believe they are making a difference in an organization for which they are proud to work rather than simply receiving a paycheck.

The HR Policy Foundation found that far from being lazy, more than two-thirds of companies surveyed reported their Millennial employees immediately made significant contributions because of their drive to innovate and superior ability to use technology.

In the same study, almost 70 percent of the Millennial participants reported they would work well beyond what was required of them to help their employer’s success if they felt like they were being challenged by interesting and meaningful work.

Reward A Firm Commitment To Excellence

Successful architectural, engineering, and design firms in the next generation must establish a top-to-bottom, relentless pursuit of excellence that rewards every employee at every phase of the contract, design, and build phase of construction for their contributions to the company.

For example, historically, the mundane task of developing and reviewing construction contracts is the first step to protecting the company. The contract establishes a scope of services, assigns liability, and addresses issues such as indemnity. Often the contracts are one-sided in favor of the owner or contractor.

Too often, in the rush to get started on a new project, senior management fails to place sufficient emphasis and little recognition of employees involved in this time-consuming and mundane task of contract review. However, it is exactly this detailed contract review and understanding of the contract before the project starts that provides the company’s first-line of defense when something goes wrong.

Going forward, construction industry professionals must make a committed effort to explain to their Millennial workforce how contract reviews fit into the overall goals and success of the company. Those that do will be surprised by the creative and excellent results obtained from their Millennials.

Millennials can be particularly effective in developing and reviewing contracts involving new, innovative project delivery methods, especially those that may involve new technologies little understood by older management.

Strive To Inspire Millennials

To achieve long-term, sustainable success, construction industry professionals and companies must deliver early opportunities for meaningful participation by and contributions from their Millennial workforce, and demonstrate a genuine interest in their careers, families, and personal lives.

A recent study by Fails Management Institute (FMI) revealed that companies that spent the time to inspire their millennial workforce by communicating clearly the company’s vision, and Millennials’ roles in it, saw a 25-percent increase in retention of their younger employees.

We have long known that the more experienced a workforce in the construction industry is, the fewer professional liability and construction defect claims that likely will arise.

Innovative companies should re-evaluate old job descriptions and develop new policies that encourage younger workers to create value for their employers in traditional and non-traditional ways.

Companies have found success when they actively seek ways to put Millennials in charge of projects, no matter how small, and explain how those leadership roles translate into advancement within the company. Numerous studies, for example, have established that smart companies are empowering Millennials to take the lead in community outreach and volunteerism, including paid time off.

For Millennials, respect doesn’t automatically come with age, experience, or job title; it has to be earned. They want to work for a company that listens to everybody’s point of view. Companies’ senior management must explain the factors and thinking that went into a company decision, and how it fits into the big picture.

There also can be significant returns by providing Millennials a seat at the table and getting their input on the decision before its made.

Mentorships are highly valued by Millennials, who truly do want to learn the ropes. But many older works may be surprised they also have something as well to learn from Millennials especially when it comes to technology.

Additionally, Millennials are by far the best-educated workforce in history and place a high value on continued education. Companies in the construction industry that implement ongoing training and education programs develop more loyalty among their Millennial workforce. And it is universally agreed that more training reduces the number of professional liability claims.

The traditionally boring construction industry may be surprised to learn that one study revealed that 56 percent of Millennials will not accept a job from a company that bans social media related to the job, especially opportunities to promote the company. In some circumstances a small company could solve two problems by enlisting younger employees to run its social media.

Companies that fail to consider ways to change their work environments, team configurations, and incentives to inspire their Millennial workforce will find themselves facing high-turnover, low morale, poor performance, unhappy clients, and a corresponding increase in professional liability and construction defect claims.

Four Immediate Steps To Take

Fortunately, construction professionals can implement a few simple steps to address these new problems with Millennials in the construction industry facing increasing pressure to complete projects quickly.

First, resist the trend to speed up. Slow down and focus on what is import. Reinforce for Millennials that within reason, the company values the tortoise over the hare if that is what is required to achieve excellence.

Second, sign a solid contract. Create a company culture that establishes a clear message that contracts that protect the company are a priority. Millennials should be rewarded, not criticized, when they ask more senior staff member or an outside attorney to get involved in the contract review of a non-standard contract or a particular phase of the project itself.

Third, involve Millennials in the negotiations of new, innovative project delivery systems where the old lines of responsibilities and indemnity may be blurred. This is especially true if the project involves new technology where the Millennial may have an advantage.

Millennials asked to provide meaningful contributions and made to feel like they are a part of emerging technology and opportunities in the industry will be more like to stay on board, gain experience, and eventually grow to become the company’s future leaders.

Fourth, make sure that projects are properly insured. We live in a litigious society. Mistakes are going to happen just like they always have. A company can reward its own Millennials for a culture of excellence but it will not prevent lawsuits arising when other companies on the project do not.

The more we learn about Millennials in the workplace, especially in the complex and high-risk construction industry, the more we confirm construction industry professionals and managers must be willing to re-examine antiquated ideas of seniority and archetypes of what makes a “good employee” if they want to manage professional liability and construction risks in the future.

Construction industry professionals and companies that develop and implement a long-term strategy for managing their Millennial workforce by embracing their new perspectives and approaches to loyalty through development, recognition, and trust will experience unrivaled success in this Millennial Age and a corresponding decrease in construction-related claims.

Tim Soefje - 04--09-18Timothy B. Soefje is the Managing Member and head of the professional liability and construction defect group at the boutique firm of Seltzer Chadwick Soefje & Ladik, PLLC based in Dallas, Texas. He is admitted in Texas and Oklahoma. For regular information about professional liability matters, follow him on Twitter at @TimSoefje and search #ProfessionalLiability. For more information, visit us at www.realclearcounsel.com or contact him  at tsoefje@realclearcounsel.com.

sbaldwinSamuel P. Baldwin is Of Counsel at the boutique firm of Seltzer Chadwick Soefje & Ladik, PLLC based in Dallas, Texas. He is admitted in Texas. His practice focuses on the defense of professional liability, construction defect, and complex commercial litigation claims. For regular information about professional liability matters, follow him on Twitter at @Sam_Baldwin5 and search #ProfessionalLiability. For more information, visit us at www.realclearcounsel.com or contact him at sbaldwin@realclearcounsel.com.

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