Modular Building – The Next Frontier of Evolution in Construction

By: Mark Bagwell, Vice President – Construction Practice

The safety risks inherent with a construction project of any shape and size are always at the forefront of an executive’s mind.   With 991 construction industry fatalities in 2016 according to OSHA statistics, it is not hard to see the repercussions of accidents and unsafe working conditions.  What if there was a way to lower your risks on the job site, lower your costs, and create a more efficient workforce?

The answer to that question could reside in modular construction.  Modular construction is gaining market share in many construction segments including hospitality, high-rise residential, office buildings, hospitals, student housing, and factories. Increases in activity of prefabrication of anything from walls (i.e., wall frames for hotels or apartments to plumbing and electrical fixtures) create these efficiencies. Plumbing, mechanical, and electrical contractors are doing this in their facilities and then shipping them to the site either partially assembled or fully disassembled, but labeled for quick assembly. These segments are more common as onsite space is limited and the project’s focus is more vertical than horizontal in the build process.  By moving the construction of modular units from the field to a controlled environment, contractors can eliminate factors such as weather, daylight, job site hazards, and other contractors’ work schedules from their project.  Perhaps the most important factor reduced, if not removed altogether by modular construction, is working at high heights.  According to OSHA, nearly a third of construction fatalities in 2016 resulted from falls.  With fewer workers at heights, there are fewer opportunities for these devastating falls.

By removing or significantly reducing these risks, you give a greater chance of reducing your costs of risk (i.e., insurance premiums).  Underwriters and rating agencies know and understand that even the safest contractors are still exposed to great risks on job sites every day.  By moving even a small portion of your work to a controlled environment, this can ensure:

• Workers are using proper techniques
• Increased quality of work with higher quality standards
• Adequate testing of final construction before installation, verifying plans are to specifications
• Improvement in ergonomics
• Having the exact equipment needed to do the job
• Controlled environments to construct components (temperature-climate)
• Technology to get the pieces right with all proper equipment/parts (avoid having to make a quick run to a shop for parts not available on-site)
• Less debris, construction traffic, and stored materials that can often lead to slip, trip and fall hazards
• Reduced hazards and accidents, therefore diminishing workers’ compensation insurance costs

Getting it right before the final installation saves your operation not only time but money. Thus, reducing liability claims and lowering liability rates – making your insurance spend less of a burden.

Beyond the already explained benefits above, another upside to modular construction is that it has the potential to greatly increase the efficiency of your workforce, enhance your ability to train new employees and extend the careers of your most seasoned (and potentially valuable) employees.  By providing employees a manufacturing environment versus a construction site, there are fewer obstacles to work around, fewer workers on-site, less uncontrolled delays possible, and an overall increase in production. The Modular Building Institute estimates that modular construction results in 30-50% less time spent at construction sites and Construction Dive estimates the reduction at 40-60%.  In a challenging labor market for all contractors and subcontractors, this reduction in time-on-site is sure to increase the bottom line.  

Modular building also promotes a higher degree of training consistency.  While many construction workers claim “being outside” and “the variety of the job” as reasons for their attraction to the industry, imagine the lure you’d have if training an employee in a controlled environment for one to two years was an option. And they would still perform an essential function for the organization.  This training time would have a significant impact throughout your organization, especially when those skilled employees were incorporated into non-modular building.  Who better to train your new hires than your seasoned veterans whose bodies might be ready for a break from the day-to-day physical stress of working on a construction site?  The controlled environment of modular construction lends itself greatly to reduced physicality on the job.  Thus reducing the potential for costly “wear and tear” injuries of older employees, therefore extending their careers.

At a minimum, modular construction and pre-fabrication deserve significant consideration from contractors of all sizes and all trades. While certain parts of the country may not see this trend coming to fruition yet, there are lots of up and coming contractors who are owned by individuals who are in their 30’s and 40’s. These owners are adopting new ways to be more efficient and control costs. What got them here, isn’t going to get them to succeed over the next 10 years. The contracting space is in position for innovation and new technology, and modular construction or prefabrication falls right into place here. With workforce shortages in all markets, demands from project owners, and a historical lack of innovation or creativity as an industry, the construction world has to proactively evaluate ways to evolve, fast.