The complete guide to project management for construction companies

Construction projects are rarely simple. Each one typically involves multiple stakeholders, tight budgets and strict deadlines. Project managers must efficiently coordinate their teams and balance limited resources, all while complying with various safety and building regulations.

Without a robust project management strategy, construction projects will quickly spiral out of control.

In this article, we’ll take a closer look at some of the biggest challenges related to project management for construction companies and how to overcome them. We’ll also look at some of the key skills and best practices for successful projects, along with a step-by-step guide to get you started.

The challenges of project management in construction

Construction projects come with lots of stakeholders, including architects, engineers, contractors, subcontractors and clients. Each stakeholder has different expectations and requirements. Balancing those priorities requires consistent communication and coordination.

Any miscommunication can lead to errors, delays and cost overruns. Key information must get through to the right people and everyone involved needs to be on the same page if your construction project is going to be successful.

At the same time, project managers often have to deal with limited resources. Most construction projects involve large budgets, but unexpected changes can blow through that in an instant. Material costs can change overnight, while delays due to bad weather or scope creep can lead to increased labor costs and equipment hire charges.

If you’re struggling to stay under budget or fighting a looming deadline, compliance becomes an even bigger challenge. The construction industry is subject to numerous regulations and safety standards, which can vary significantly from one region to another.

Non-compliance can result in legal penalties, further delaying the project and increasing costs. More importantly, failure to adhere to safety standards increases the risk of accidents, potentially endangering workers’ lives.

Essential skills for effective project management

Even the smallest construction projects can seem overwhelming at first but, with the right abilities, you can lower the risks and increase the chance of a positive outcome. Here are some of the most important skills you can develop for successful project management in construction.

1. Leadership and team management

Leadership is at the core of project management. A project manager needs to not only guide their team on a practical level but also inspire and motivate them when challenges occur.

In the construction industry, project managers must take the lead to promptly resolve conflicts between the different stakeholders. They need to be able to make smart decisions even when they’re under pressure and keep the team working cohesively.

Due to the scale of construction projects, project managers must know how to delegate tasks appropriately. Every person involved in the project will have different strengths and weaknesses, and it’s the project manager’s job to recognize those individual qualities and ensure they’re used in the most effective way possible.

2. Effective communication

Project managers in the construction industry must be comfortable communicating with a diverse group of people, from onsite workers and contractors to investors and clients. This means explaining complex concepts in an understandable way, providing regular updates and keeping all parties informed of any changes or issues.

Communication isn’t all about talking though; you also need to listen. Enhance your communication skills by practicing active listening. Give the speaker your full attention, going beyond just the words they say to try and understand the underlying message.

3. Resource management

We’ve already seen that project managers often have to deal with limited resources. To overcome this challenge, you’ll need to be skilled in planning and controlling both your finances and timelines. However, plans need to be flexible.

Trying to anticipate every single potential issue is impossible, but certain problems are more likely to come up than others. Supply chain issues, weather conditions and delays in securing permits shouldn’t come as a surprise, so consider in advance how you’ll deal with those problems if (or more likely when) they occur.

Keep a close eye on expenditures and how you’re progressing toward your deadlines. If necessary, work out where costs might be cut or time saved without compromising the finished product. Project management software can be particularly useful for keeping track of your scheduling and progress (more on that later).

4. Technical knowledge

Funnily enough, one of the most important project management skills in construction doesn’t technically have anything to do with project management — it’s your construction expertise. Construction projects are complex, so you’ll need a solid understanding of construction methods, materials and regulations.

Having experience with previous construction projects will be a big help, but you’ll also need to keep up to date with the latest advancements in the industry. There are always going to be new techniques, materials and regulations to learn about.

There are plenty of ways to stay updated, whether that’s attending a big industry conference, taking a course on sustainable building practices, regularly tuning into a podcast, learning from an established construction mentor or picking up a magazine. Find what method works best for you and stick with it.

Project management tools and software recommendations

Tracking all the different moving parts that make up a construction project with just pen and paper is unlikely to end well. Pick the right tools for the job with the best project management software for construction firms.

Construction management software

Purpose-made solutions take into account the unique challenges of a building project. Specifically designed for the construction industry, these tools help manage every aspect of your projects, from pre-construction to completion. They typically include features for bid management, project scheduling, document management and compliance tracking.

Top construction management software:

• Procore, an all-in-one solution with tools for project management, financials, safety and productivity
• Autodesk Construction Cloud with workflows for managing your bids, costs and documents.

Financial management systems

From tracking all the different costs and invoices to managing your overall budget and other accounting tasks, these tools go beyond simple spreadsheets to help you look after the financial health of your project throughout its lifecycle.

Top financial management software:

• QuickBooks: Widely used for accounting, invoicing and financial reporting
• Xero: Offers real-time financial data, budgeting and project cost tracking.

Collaboration platforms

Collaboration tools enable seamless communication between stakeholders, from office staff and onsite crew to clients and contractors. These apps help everyone stay informed and engaged with the project from start to finish.

Top collaboration software:

• Slack: A messaging app for your team that integrates with many popular project management tools
• Zoom: Video conferencing with an AI companion, virtual working spaces and team chat.

Document and drawing management

Behind every building project is a mountain of paperwork. These tools ensure all team members have access to the latest information, enabling you to easily manage your project documents, blueprints and revisions securely.

Top document and drawing management software:

• Dropbox: A cloud storage solution for sharing and storing documents and drawings
• Fieldwire: Another all-in-one tool with features for digitized forms and sharing drawings.

Customer relationship management systems

With the sheer number of stakeholders involved, you need a way to easily track and manage those interactions. Customer relationship management (CRM) software helps you store important details and nurture those relationships, giving you an overview of your team's performance and your client’s requirements.

The best project management CRMs go a step further, including many of the essential project management features you need in one simple package.

For example, Capsule CRM helps construction firms with:

• Improved task management
• Workflow automation
• Contact management (with document storage)
• Finance management
• Real-time project visibility.

Capsule comes with a mobile app to connect every member of your team, whether they’re onsite or in the office. Wherever you are, you’ll have access to the latest customer information, as well as your calendar, tasks and sales pipeline.

You can also connect Capsule to all your favorite tools with a wide selection of integrations.

Learn more about how a CRM for construction can help your business today.

Best practices for project management in construction

You know the challenges, you’ve got the skills and you’ve got the right tools. Now bring it all together with the following best practices to keep your projects running as smoothly as possible.

Establish your objectives

Setting clear, measurable goals and objectives is good practice for any kind of project. It provides you and your team with a roadmap for the project and helps get all stakeholders fully aligned before any work begins.

Work with clients and team members to define your project scope, budget and timelines. The SMART goal-setting framework comes in useful here, encouraging you to consider all the essential information without missing important details:

• Specific: What exactly are you trying to achieve?
• Measurable: How will you track your progress?
• Achievable: Do you have the necessary resources?
• Relevant: Is this the right project? How does it align with the firm’s overall goals?
• Time-bound: When will each phase of the project be completed?

Use your CRM software to create detailed project plans, including milestones, tasks and deadlines. Regularly review and adjust schedules as needed.

Make time for regular check-ins

Effective communication ensures that everyone is informed about project updates, changes and challenges. It’s easy to assume that people will share relevant information when needed but, in practice, essential details can fall through the cracks.

Don’t leave communication to chance. Decide on what channels you’ll use and how often you’ll need to hold meetings. Ensure everyone knows what kind of details need to be shared, how to share that information and when to share it.

For example, you might decide that daily updates will be shared in your Slack channel, with designated staff tagged for notification. You then might have a weekly standup meeting to get key stakeholders in the same room to discuss progress and any challenges.

Can this be automated?

Construction projects involve lots of physical work, most of which can’t be offloaded to robots or artificial intelligence (yet). However, behind the scenes, there are plenty of admin tasks and other jobs that can quickly suck up your time. Automation can lighten that load, helping out with repetitive tasks and freeing up your team to focus on more important work that requires the human touch.

Think about what kind of admin tasks take up time in your project management process. For example, Capsule’s Growth plan gives you access to automation for updating task statuses, sending templated emails to stakeholders and more.

Should this be automated?

Of course, just because something can be automated, it doesn’t mean it should be. While it makes sense to automate menial low-touch tasks, there are still certain tasks that benefit from human oversight. This is true when setting up your projects and tracking their progress.

“Workflow automations are great because they standardize your admin,” explains Keith Weir, Customer Success Team Lead at Capsule. “But sometimes people want everything automated. They’ll create loads of automated projects, then they can’t keep on top of them all. You still want to be on top of the work that you’re generating and take responsibility for it.”

Knowing when to automate and when to add the human touch will help you save time while still keeping that personal engagement high.

Getting started with better project management

Whether you’ve got a big project on the horizon or you want to optimize an existing project, these steps will help you tackle any kind of project as effectively as possible.

Step 1: Define your project scope and objectives

We’ve already looked at the importance of establishing clear objectives. Put that into practice from the very beginning, identifying your project’s goals, deliverables and success criteria. Clarify the project scope with the client and ensure you fully understand what’s involved.

Use the SMART framework to get all the important requirements down on paper, then confirm those details with the client to reduce the chance of any confusion once the project starts. Get your team involved as early as possible to get their input on whether the objectives are realistic. Ask them to point out any potential challenges that are likely to come up before kickoff.

Step 2: Establish a project plan

The next step is to break down the project into manageable tasks and subtasks. For example, what will need to be accomplished during the different phases, such as site preparation, foundation work, framing, roofing, etc?

Assign these tasks to team members and subcontractors based on their expertise and capacity. Set specific milestones and deadlines for each construction phase to maintain a steady pace toward project completion.

Working out how far to break down each of your tasks is a balancing act. You want to ensure there’s no confusion or doubt about what’s involved, but too many subtasks can be overwhelming and make it harder to respond to any unexpected challenges. Make each task as simple as you can while ensuring it has all the necessary details.

Step 3: Monitor and control project progress

Once construction begins, establish routine check-ins and progress reviews to check that the actual work is still in line with the original plan. Of course, you should still be prepared to revise that plan if necessary, especially where there are significant challenges, scope alterations, or feedback from stakeholders (including clients and regulatory bodies).

Use your chosen project management software to oversee task progress, available resources and adherence to your original timeline. Most software solutions offer various views and dashboards to suit different needs — whether you need a simple checklist for immediate tasks or a Kanban board for a comprehensive view of project stages and workflow.

Step 4: Maintain effective communication

While communication is unlikely to be a challenge at the start of a construction project, it can easily drop away as time goes on. Keep a close eye on your communication channels and check that everyone is getting the messages they need to do their job effectively and resolve any issues.

Foster a culture of openness and transparency within the team to swiftly tackle obstacles and keep stakeholders informed of progress, critical decisions and any project changes.

In the construction sector, using automation for communication can significantly improve efficiency. For example, you can send automatic updates to stakeholders when the project transitions between phases or when significant milestones are achieved.

Step 5: Close the project and reflect

Once the project is completed, it’s time to celebrate! However, before popping the champagne, take the time to review the project. When the work has been approved by the client and any necessary regulatory agencies, officially close the project and organize a post-project debrief with your team and any relevant subcontractors.

This meeting is an opportunity to discuss successes, areas for improvement and lessons learned. Document these insights thoroughly to refine practices for future construction projects, aiming for continuous improvement in project delivery and client satisfaction.

Laying the foundation for future projects

Successful project management in the construction industry involves careful planning, coordination and continuous monitoring. By following these steps, you can establish a strong foundation for managing construction projects and meeting all of your stakeholders’ requirements.

Remember, the goal of project management isn’t just to construct as many buildings as you can as quickly as possible. The ultimate aim is to surpass client expectations, delivering projects that not only meet but exceed quality, safety and functionality standards. It’s about constructing spaces that resonate with clients and end-users, embodying their visions and dreams.

By doing so, you’ll build up a strong reputation and cultivate business relationships that will help your firm continue to grow.

Discover more about how a CRM can help your firm manage current and future projects. Enjoy Capsule’s free starter package or start a 14-day free trial and see how Capsule’s features can help you save time and deliver outstanding construction projects.