Our staff recently returned from working with several surveying and engineering firms in Georgia. The recession is having a substantial impact there; companies that were 80 people deep last year are now at 40, and a rebound is not in sight. Little new work is coming in for land development, and billable time is often spent on cleanup, revisions, small task orders from recurring annual municipal contracts and similar functions.
Some developers have sought proposals but haven’t pulled the trigger on them yet. The number of respondents has risen significantly, and I am sure bid prices have fallen, so there should be good impetus to award a few contracts-assuming the projects are financially viable.
The firms we spoke with said that they’ve put technology investments on hold. Most have dropped software license subscriptions because they do not foresee a return to staffing levels that justified the need for the number of licenses they had two years ago.
What these firms are focusing on, however, is training. As firms have cut back on their workforce, they have sought ways to increase productivity-largely through the improved use of existing equipment and software. Such training wasn’t feasible several years ago when business was good because no one had time.
Some firms are also finding that this is a good opportunity to review how many different types of data collection software, hydrologic solutions and/or traverse closure applications are used in-house and look for ways to consolidate solutions. Firms are cleaning house, eliminating personal preferences in favor of efficiency, improving workflow and dataflow, training staff and management and ensuring that every potential penny of profit is retained.
In some cases, firms that had been outsourcing certain tasks that weren’t considered part of their “core competency”-such as hydrology studies, surveying, earthwork takeoffs, 3D modeling and visualizations-are now trying to bring these tasks in-house. Often, they had the necessary software to perform these tasks all along and simply lacked the training. Many are astounded at how much money was leaving their company. By bringing these tasks in-house, these firms are able to save money and expand their portfolio of services.
So, the economy in Georgia remains challenging. But the firms there are resourceful.
Nationally, we are seeing a large uptick in work helping land development-based companies penetrate the world of infrastructure engineering. Much of this work is contracted out by the government, and the traditional land development software isn’t used in this arena. So again, many firms are finding that they have the skills, knowledge and credentials to handle these projects and just need to acquire the appropriate software and/or training. After building up their portfolio in this arena, they can then go after the prime position on future projects.
This should be the business model for any land development firm that desires growth. Let’s face it-the pie is smaller. The amount of land development has dropped and likely will not come back to previous levels for the foreseeable future. We have to go where the work is, and that is infrastructure!
What do you think? Please post your comments below.