Viewpoint, by Will Baker

Jul 11 2007 by Will Baker, director, KPMG in Liverpool

A GOOD reputation is more valuable than money. As I cast my eye over Liverpool’s ever-changing skyline, it’s clear that never has this been more applicable to the building and construction industry.

With countless cranes and new buildings springing up on an almost daily basis across our horizon, it’s clear to see that demand for construction across Merseyside is continuing to boom.

For all those firms competing for multi-million pound contracts, having a strong reputation and track record has become the greatest string to their competitive bow.

KPMG recently published its second annual survey focusing on the construction market, in which we wanted to find out what keeps clients of construction services awake at night.

What is clear is that a good name is one of the biggest factors to influence purchasing decisions, with 57% citing expertise and reputation as the two most influential qualities that clients look for when selecting a contractor. Price, it turns out, is less critical, with only 12% of clients suggesting this is an overriding factor.

Perhaps unsurprisingly, the number one cause for concern that cropped up time and time again was the lack of qualified contractors avail- able to undertake projects.

The ‘war on talent’ has long been a topic at the heart of boardroom agendas across the industry, with more and more firms seeking to tackle the apparent dearth of qualified workers.

However, there is an increasing threat that as this finite pool of skilled contractors get pulled in ever- increasing directions, projects are at a greater risk of not being delivered on time or to budget – something which can only have an adverse effect on price, the quality of work being delivered and the reputation of the contractors themselves.

Another issue which can have severe consequences for a firm’s standing is fraud – and perhaps worryingly, almost a fifth of all companies we spoke to claimed to be aware of fraudulent activity in recent projects.

On a brighter note, clients are generally positive about the state of the industry. The majority of major projects are finished on time and perhaps more importantly, on budget, and over three-quarters claimed they would engage the same contractor again.