The different types of risks involved in Construction Project Management

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​The potential for major consequence in projects doesn’t get much riskier than a construction project, where there is a fine line between minor/moderate consequences and major/catastrophic consequences. Arguably, the most important part of construction management is the risk assessment, as keeping the company, your staff, surrounding bystanders, stakeholders and you safe is pivotal in achieving a successful construction project. 
 
The question that should always be asked before construction proceeds is: “What are the risks?”. The answer to this question changes with every construction project, as different problems arise all the time, and problems you may have experienced on some construction projects may not appear for other projects, while other risks which weren’t previously a problem become potential hazards now. So, what are some of the risks you need to look out for? Continue reading and I will instil some risk assessment wisdom upon you with this short list. 

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Construction project risks

• ​Natural Hazards- This is something that can occur at any location, any time and to anyone. It may seem easy to diagnose certain hazards such as the potential for earthquakes for a project in Los Angeles near the San Andreas fault line or building in Florida where there is an increased risk of hurricanes and floods, however, there are certain natural hazards that aren’t always obvious because they aren’t visible. Take this article by the BBC as an example, it talks about how sinkholes are proving to be deadly in Florida, especially as they are so unexpected. This is something that could be easily avoided through an underground GPR survey to make sure you are better safe than sorry. 

• Financial Risks- You must be sure that everything has been taken into account in terms of budgeting and cost control, this includes; capital items, expenses, consumables, accommodation and of course, resourcing. There are different costs within these criteria too (Direct, Indirect, Fixed and Variable costs), so after you’ve run a risk assessment for your budget, it’s crucial you have a contingency budget/plan for if any of the risks you’ve identified occur. The identified risks could range from the rate of inflation changing, or a lack of funding from external bodies.

 

• Performance Risks- There are a few different performance risks that could occur, however, these risks all whittle down to “how productive is the project?” This includes both Labour and Equipment productivity, as well as how conduct at work and within the project is affecting your productivity. Whilst productive labour is fairly self-explanatory, the productivity of construction equipment is a bit more complicated. For example, how do you know if the project’s materials are truly sustainable for both the structure and the environment? The only way to know is to research before you buy.

 

• Security Risks- The definition of security is: “protection, or a condition of safety, from hostile, aggressive or unwanted situations, events or forces”. It is important to note the unwanted part of this sentence as many people just lump security into being physically safe. Whilst this is a big part of it, we must also look at the cyber aspect of security, as the ever-growing world of technology makes these risks more dangerous than ever. My personal advice for assessing security risks is to never overlook cyber security as it could turn the whole company on its head overnight and you never know what hackers are capable of.

 

• Political & Legal- These are the types of risks that don’t intrinsically jeopardize anyone physically, however, the impact can still be as ground shaking to construction projects if these risks are not accounted for. For example, you need to make sure you are following environmental procedures and have a sustainable construction project. This could result in various legal ramifications you are not following the law regarding these regulations. Politically, you need to make sure your staff are happy, as anything that could potentially rock the boat could also result in strikes and work stoppages, or even worse, public disorder.

 
If I was to list every single construction project risk you need to look out for, this would be a long list. However, hopefully this post helps open some eyes to the plethora of problems that can arise in construction projects so that you can be prepared for some of these issues if they were to crop up.
 
BIO: Kevin Banks is the director of KB GPR surveys. He has many years’ experience in the GPR sector, and his staff come from a range of backgrounds, so they can deliver a unique service which is efficient, cost effective and accurate.

Want to read more construction management tips and insights? Read 'Successful Construction Project Management: The Practical Guide' by Paul Netscher

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