4 risks in construction projects and how to manage them

TLDR

Construction projects have risks like safety hazards, subcontractor delays, change orders, and labor shortages, but planning and proactive management can keep projects on track.

Understanding Construction Project Risks

Owning a construction business means understanding that risk is part of the job. Every project brings uncertainty, whether it is related to safety, people, scope, or staffing. Contractors who take risk management seriously are better prepared to plan ahead, make informed decisions, and protect their business as projects grow in size and complexity.

Below are four of the most common risks construction businesses face and how to manage them effectively.

Health and safety hazards

Construction sites are constantly changing environments. Conditions can shift in seconds, and hazards can appear without warning. Workers may be exposed to heavy machinery, aging materials in older structures, unstable access equipment, toxic substances, and vehicle traffic entering and leaving active job sites.

Beyond these common hazards, the everyday use of tools and equipment introduces additional risks such as cuts, falls, electrocution, and serious injuries. Without proper planning and oversight, safety incidents can halt projects and create long-term consequences for both workers and businesses.

How to manage and prevent health and safety hazards

The most effective way to manage safety risks is to reduce them before they escalate. Careful scheduling ensures you have the right number of workers on site and avoids unnecessary congestion. Planning work during lower traffic periods reduces the risk of vehicle-related accidents. Limiting the amount of equipment on site lowers exposure to potential hazards, while enforcing the use of proper protective gear ensures compliance with safety regulations. Regular and consistent safety training helps workers identify risks early and respond correctly when conditions change.

Subcontractor problems

Subcontractors are essential to most construction projects. They provide specialized skills, increase flexibility, and often help projects move faster. However, managing multiple subcontractors can introduce serious risk if timelines are missed or communication breaks down.

Late deliveries, incomplete work, and coordination issues can delay entire projects and create costly scheduling conflicts, especially when tasks are interdependent.

How to manage and prevent subcontractor problems

Strong communication is the foundation of successful subcontractor management. Clear agreements that outline scope, timelines, and accountability reduce confusion from the start. Enforcing realistic schedules and monitoring progress consistently helps identify issues early. Having contingency plans in place allows you to respond quickly when problems arise, while ensuring subcontractors meet safety standards protects everyone on site and reduces liability.

Change orders

Change orders are one of the most disruptive risks in construction projects. They often result in delays, increased costs, and added administrative workload. Even small changes can trigger design revisions, permit updates, and reengineering that slow progress and introduce new risks.

Poorly managed change orders can also lead to disputes if costs, timelines, or responsibilities are unclear.

How to manage and prevent change orders

Clear communication upfront is critical. Defining project scope in detail and addressing unclear items early reduces the likelihood of changes later. When changes are unavoidable, they should be documented thoroughly and include all labor, material, and equipment impacts. Avoid using change orders as a way to underprice a project initially, as this often leads to strained client relationships and financial pressure down the line.

Labor shortages

Labor shortages continue to challenge the construction industry. Unexpected staffing gaps can lead to overtime costs, slower progress, or incomplete work. In some cases, shortages force contractors to revisit completed work or hire temporary labor at a premium.

These disruptions directly affect timelines, budgets, and overall project quality.

How to manage and prevent labor shortages

Investing in training and development helps retain skilled workers and encourages long-term growth within your team. Maintaining a pool of potential hires allows you to respond quickly when additional labor is needed. Accurate labor estimating improves workforce planning and reduces last-minute surprises, while keeping detailed records of roles and responsibilities ensures resources are allocated efficiently.

Final thoughts

Planning for risk can make a significant difference in the success of your construction business. Contractors who anticipate potential issues and put systems in place to manage them are better equipped to deliver projects on time and on budget.

Using accurate estimating tools is a key part of effective risk management. Bolster helps contractors create precise estimates, manage resources efficiently, and maintain visibility across every stage of a project. By improving accuracy and organization, you can reduce uncertainty and spend less time reacting to problems as they arise.

Bolster gives you the tools to plan smarter, manage risk, and build with confidence.