How To Manage Construction Project Risk

Construction projects are full of risk. From the start of the project a schedule and budget can be impacted by issues that arise. Having an understanding of what those issues could be, and having a proper contingency plan could mean the difference between success and failure.

There are many articles online about dealing with risk in different ways. Below we’ve included some high level ways to manage risk on your project.

Create a Risk Registery

Risk registries are essentially a list of items that could go wrong or impact the project. These registries are than used to track issues throughout the project and put extra emphasis into those activities to make sure they don’t impact the project.

A risk registry can contain the following item:

  • Risk Item
  • Impact to Project
  • Mitigation Method
  • Likelihood of Occurrence

The link below is a great resource on developing a risk registery for a project.

Manage Your Schedule, Identify Areas with Lots of Float

Managing your schedule is important. Understanding your critical path is a huge part of that understanding. Knowing what items are critical and what items have more float and therefore more room for flexibility is key. Your’s and your team’s time is limited, when you get into the weeds it’s important to know where your time is better spent and if some things can slip in the interest of the critical path.

For some good articles and understanding float refer to the below links:

Cost risk

Cover the Costs

Whether you’re a contractor, subcontractor or owner it’s important to put money aside for a rainey day. With the risk register established you can assign values to each item at the start of the job and set aside some money within your estimate to deal with these issues. If you’re an owner, you can create pools within your overall budget to deal with these types of issues.

Don’t Lose Your Cool

It’s important to remember that life will continue on even after something happens. Managing an issue on the job takes a clear head and calmness.

Use logic to solve the problem, not rage or anger.

Utilize people around you who are more specialized than you. There will always be someone who knows more about a specific subject than you and can help out.

Managing risk in a project is not easy and is difficult. There are many different approaches and the items above are just some of the things you can do to help reduce the likelihood of risks impacting your project. Utilize even one of these items will help to reduce impacts more than doing nothing!

Have a mitigation technique? Share it with us below!

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