< Previous2022 // www.scoar.org 11 Diane and I are very grateful for your friend- ship and support to SCOAR! In 2022, we gained 24 new mem- ber organizations which include large contractors, specialty contractors, and valued suppliers. We continue to solicit membership from owner orga- nizations throughout the 12-state “footprint” of SCOAR. Next year will be our 50th year as one of the largest Local User Councils of the Construction Users Roundtable (CURT)! This year we were able to have safe and effective in-person meetings with an average attendance of over 130 members per meeting. In the fall of last year, we hosted a great General Session and the annual TOPS Safety and Scholar- ship Awards Dinner at the Speedway Club at Charlotte Motor Speedway in Charlotte, North Carolina. In January 2022, we hosted the Winter Meeting for the first time at the leg- endary Grand Hotel in Point Clear, Alabama. At this beautiful venue we had a great Reception, another great meeting, and a fun night rais- ing scholarship monies with a casino night and dinner. Most recently we went back to the ever-popular Resort at Longboat Key Club where over 175 attendees enjoyed a beautiful sunset Reception, entertaining and educational General Session, and the annual Golf and Fishing Fundrais- ing Tournament. We had wonderful prizes at every meeting for winners of raffles, auctions, and competitions, thanks to the donation of owner- member DEWALT. SCOAR is currently planning the 2023 winter, spring, and fall events with proposals from many attractive venues that our Board of Directors and members have suggested to us at previous meetings. In May of next year, we will be back in Longboat Key, Florida for the Spring Meeting and Golf & Fishing Tournament, for our 13th year. SCOAR continues to utilize dona- tions and net revenue from opera- tions to fund Craft Training Grants, Technical Trades Scholarships, and College/University Construction Engineering and Management Schol- arships. While donations are still coming in at this time, over $25,000 has been committed by member organizations Graycor Southern, NCCER, DEWALT, PTS Group, South- eastern Construction & Maintenance, Ironworkers/IMPACT, and the South- ern Sates Millwright Regional Council. If you have not already registered for access to the Member Portal on the SCOAR website, please do so. This portal will provide secure access to individual employees of every member organization through passwords that each member selects. The secure site includes many member resources, most of which can only be accessed only through the member portal, such as the detailed member directory, committee information and documents, discussion forums/blogs, and special promotions. There is also a library where you can access past meeting presentations. The Voice Southeastern is now available on the website in an attractive, interactive format with links to member companies and promotions. Soon, the Executive Leadership of the Board of Directors will announce the new SCOAR Executive Director Team. Please continue to provide them with ideas for improvement and recommendations for potential new members. Your feedback via phone call, email, and feedback forms at our meetings, are important to the future of this great association! Diane and I are very thankful for the support of the SCOAR Board of Directors and its 99 member organi- zations. Although we will be retiring after the Fall Meeting in Ponte Vedra, Florida, we will carry with us grand memories of over four decades of friendship built by working in this great industry! From the Executive Director Steve Greene Executive Director SCOAR12 Southeastern Construction Owners and Associates Roundtable Construction workers are six times more likely to die by suicide than in workplace accidents according to the mental health organization Mates in Construction. In the United States, the suicide rate of construction workers is nearly four times the national average, including positions in engineer- ing and construction management. And this isn’t just about suicide. According to a U.S. Census Bureau study, 33 percent of construction industry workers suffer from anxiety, depres- sion, and unmanageable stress. Divorce rates and substance abuse rates are also well above national averages. There is a sea of research correlating high suicide rates and ill-mental health with the construction industry workforce dating back to at least 1984. To preserve the current, skilled workforce, and to be able to recruit and retain the workforce of the future, the industry must act now. Are people who suffer ill-mental health attracted to our industry? Or does working in this industry contribute to the ill-mental health of its workforce? Research shows that working in the construction industry increases the likelihood that an individual will experience ill- mental health. What is it about the industry that is contribut- ing to ill-mental health of its workforce? Let’s start with a risk analysis of the factors that are known to contribute to poor mental health. These include: • Travel and nights away from home; • Loneliness and loss of relationships and connectedness to community; • Employment uncertainty caused by the hiring/lay-off cycles in construction; • Lack of feedback or receiving only negative feedback; • Inadequate staffing and overloading existing workers; • Long work shifts and work weeks; • Unrealistic deadlines and budgets; • Conflicting demands; • Lack of time management skills; • “Tough-Guy” attitude; and, • Unhealthy coping skills. How does ill-mental health manifest itself on projects? The World Health Organization estimates poor mental health costs the global economy one trillion dollars annually in lost productivity and these numbers are projected to grow exponentially over the next couple of decades. The pandemic has only exacerbated the issue and sped up the decline of mental health in the construction industry. On the most basic levels, the costs of ill-mental health can be measured and cal- culated using these categories of direct and indirect impact: • Direct Costs: such as absenteeism, presenteeism, short- term and long-term disability claims, employee turnover, and incident costs. • Indirect Costs: such as culture, engagement, recruitment, retention, and toxicity. As a senior leader in my company, will I be able to measure a Return-on-Investment for implementing a mental wellbeing program? Happy workers are more productive, absent less, more focused, cause less drama, don’t quit, perform better, and achieve superior results. Companies with mental health pro- grams outperform peers in the S&P 500 Index, align better with / FEATURE // Defining the Problem: Mental Wellness By Teresa Magnus, Magnus & Company, and Kathryn Ely, Empower Counselling2022 // www.scoar.org 13 shareholder ESG priorities, and recruit and retain top candidates. Based on recent studies, companies can expect average returns of 250 percent on the costs spent on these programs. These studies are based on measured reductions in the direct and indirect impact costs listed above compared to the investment made. Many of these costs are performance indicators already tracked on projects sites and other work environments and can be easily converted into Key Performance Indicators (KPI). When surveyed, 85 percent of construction workers believe the industry does not do enough to support mental health. It is a simple proposition and not something new: take care of your employees and they will take care of you. What does a mental wellness program look like for a company? Mental health is defined by the World Health Organiza- tion as a “state of wellbeing in which the individual realizes his or her own abilities, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to his or her community.” Successful programs are designed to support individuals in achieving this goal. Mental wellbeing programs must be devised to address both the workplace, as well as the workers’ personal lives. It is counter-productive to focus on one without the other because people bring their personal baggage to work, carry home their The program does not need to be revolutionary. Organi- zations should focus on improving the psychological safety of the workplace and putting plans in place to respond to emergencies. Standards for these factors have already been developed. For individuals, companies should provide tools to support the rebalancing of the eight domains in their lives and the development of healthy coping and time manage- ment skills. Working with a professional will allow companies to leverage existing roadmaps to implementation and tools already tested in the market. Like the evolution of physical safety on construction projects decades ago, companies need to start with a basic framework and a goal to make a difference. No one was an expert in safety when the first programs were rolled out to construction work- forces. The same is in effect here. Companies must begin to adopt industry best practices with respect to the mental wellbe- ing of their workforces and make a commitment to caring for workers and measuring results of programs. y Teresa Magnus dedicates her work as a Principal Consultant for Magnus & Company, Inc. to transforming industry per- formance by challenging conventional business models with unique perspectives, revolutionary thinking, creative solutions, and intelligent execution. Kathryn Ely is a Licensed Professional Counselor who guides clients away from anxiety, depression, and self-limiting thoughts, toward more fulfilling and satisfying lives. frustrations from work, and, in general, respond to the environ- ments in which they spend a meaningful amount of time. 14 Southeastern Construction Owners and Associates Roundtable Regional economy paints a pretty picture Even as inflation, rising interest rates, and burgeoning pessimism dampen economic growth, available indicators suggest that the states of the south- east generally continue to recover from early pandemic stages. Several regional factors have helped, including ongo- ing migration from northern states, the performance of a handful of emerging superstar cities like Charlotte, Nashville, and Tampa, and reasonably mild rates of COVID-19 spread. According to the latest data from the U.S. Bureau of Labor Statistics, nearly all southeastern states have fully recovered jobs lost during early phases of the pandemic. Only one regional state has recovered a smaller share of jobs than the nation: Alabama, which sits at 96.4 percent versus the U.S. at large at 97.6 percent. The number of jobs supported by economies in Ten- nessee, North Carolina, Georgia, and Florida is meaningfully higher than it was pre-pandemic. As of June 2022, Tennessee, the leader in this dimension, supported nearly 25 percent more jobs than it did pre-pandemic. North Caro- lina follows close behind at 24 percent. In terms of percentage employ- ment growth over the past year, the leader is Georgia. During the 12-month period spanning June 2021 to June 2022, the Peach State added 5.4 percent to its employment totals. A red-hot travel economy has also helped to support rapid employment growth in Florida, which has added 5.1 percent to its employment base, in part because of rapid recovery in leisure and hospitality segments in both Orlando and Miami. But the extent to which the region can continue to rapidly add jobs is in ques- tion. If anything, unemployment rates are too low. That may be an odd statement given the region’s low unemployment rates, but the region and nation’s low unemployment rates are both inflation- ary and constraining. Despite a sharp slowdown in economic growth recently, many employers continue to complain about difficulties recruiting and retaining workers. As unemployment has trended lower, these difficulties have become more severe, producing a combination of delayed supply and higher prices. Despite generating soft recov- ery by regional standards, Alabama has been associated with the lowest unemployment in the region. Indeed, many communities that have been slow to recover around the nation (e.g., Minneapolis, San Francisco) are also associated with unusually low rates of unemployment as local labor forces have shrunk in size, often due to outmigration. But regions that have been unduly successful in terms of pace of recovery are also associated with low rates of unemployment. This is a national phe- nomenon and has much to do with the size of America’s working age population, the growth of which has slowed in recent years. In short, to date the region’s macro- economy has been supportive to robust economic growth and attendant robust construction activity. Whether that will persist remains unclear, however, as the risk of recession rises in the context of Southeast Economic Recovery Continues Despite National Challenges Building Permits Issued, June 2022 1 Unit2 Units3 to 4 Units 5+ UnitsTotal Alabama1,8541,577212263 Florida20,16012,002194837,881 Georgia5,6454,38198701,096 Mississippi86466847185 North Carolina7,1065,79684231,203 South Carolina4,1703,663037470 Tennessee3,8173,1412059597 Southeast States (Total)43,61631,22840229111,695 U.S.157,198 91,5152,6582,15860,867 Percentage of Permits Issued to Southeast States 27.7%34.1%15.1%13.5%19.2% Source: U.S. Census Bureau / FEATURE // By Anirban Basu, Associated Builders and Contractors2022 // www.scoar.org 15 in March, 0.5 percent in May, and 0.75 percentage points in both June and July. Further monetary tightening will only slow an economy that has already softened. For those who operate southeastern construction firms, this suggests that demand for construction services may fade somewhat over the year to come. y Anirban Basu is the Chief Economist for Associated Builders and Contrac- tors as well as the Chairman and CEO of Sage Policy Group. National job growth has remained rapid in recent months, consumers continue to spend, and the summer travel season can be characterized as hectic. None of this appears consis- tent with recession. But recession remains likely. Infla- tion has become ingrained in the economy. To bring the U.S. economy back to two percent target inflation, the Federal Reserve will need to con- tinue to ratchet interest rates higher. The Federal Reserve raised its bench- mark rate by 0.25 percentage points higher borrowing costs and the impact that rampant inflation is having on household and business balance sheets. Southeast’s construction scene The number of building permits within the southeastern states remains high, especially compared to the bal- ance of the nation. In June 2022, the last month for which there are data, roughly one out of every five residential building permits were issued in a south- eastern state. More than a quarter of single-unit permits went to the region. For homebuilders, this has been both blessing and bane. Strong demand for newly constructed homes creates opportunities for builders. But supply chain disruptions, component, equipment, and worker shortages render it more difficult to satisfy that demand, especially at price points that are comfortable to first-time and other homebuyers. Materials price spikes have been registered across the energy complex, but also in materials like con- crete. Builders can be thankful, how- ever, for a recent decline in what had been sky-high lumber prices. Data from the American Institute of Architects’ Architectural Billings Index (ABI) supplies additional evi- dence. This is a diffusion index, with any reading above 50 indicating that architects are busier in a given month than they were the prior month. It serves as a leading indicator since architects who are busy upstream tend to translate into contractors who are busy downstream. As of June 2022, the reading for the south- ern U.S. remained above 50, indicat- ing that architects continue to expe- rience rising volumes of design work. Looking ahead The Federal Reserve strives to engineer a soft landing. They seek to slow economic growth (further), wring excess inflation out of the economy, without launching the economy into recession. While many suggest that America is already in recession and has indeed generated two consecu- tive quarters of negative real GDP growth already, the official definition of recession has yet to been met. 16 Southeastern Construction Owners and Associates Roundtable Almost every article on safety starts with a review of numbers and accident information that must be so well-known it is like a baseball player who writes his batting average on the sleeve of his uniform. We know now, on the 50th anniversary of the Occupational Health and Safety Act (OSHA), there are still close to 2.5 million accidents a year in the United States, that accident costs are close to $53 billion a year, and that the pri- mary safety problems are in the areas of transportation, slip falls, contact with machinery and harmful materials, and the negative effects of overex- ertion. A significant change in gen- erational records since the inception of the OSHA is the comparatively recent increase in workplace violence. In the quest to improve safety, sub- stantial attention has been given to root-cause analysis such as: errors and unintentional mistakes, poor judgment/ bad decision-making, and a disregard for procedures. The natural response to these causative factors has been to enhance training, create safer work areas with better safety devices, and increase vigilance in both safety instruc- tion and inspection. Each of these approaches have credibility and should be given continued attention. Unfor- tunately, many of these measures are implemented after the fact of some mishap or accident. We often get bet- ter at finding ways to “keep the hors- es in the barn” only after the chaos of some horses having escaped. Our efforts for better safety become more re-active than pro-active, and even the proactive strategies that we create con- tinue to be the result of analyzing a negative event that has occurred. What if we added just one addi- tional – and very sensible – safety ele- ment to our preventative and proactive approach? What if we understood, as we probably already know, that some individuals will have more of a propen- sity for being safe than others, and that this propensity tees up every other step in any safety process? And, most importantly, what if the propensity of an individual to be safer could be accurately measured? A propensity is the outcome of our values; what we feel is important, vital, and necessary. I have a propensity to follow The University of Tennessee, Knoxville (UTK) football, not Australian- rules football. It is somewhat fun to By C. Stephen Byrum, Ph.D., Judgment Index™ / FEATURE // Safety on the job begins with a greater clarity about propensity for good judgment and safety. Photos courtesy of Bill Wilson. A New, First Approach to Safety2022 // www.scoar.org 17 watch the Australian approach, but I am not really “bought in,” committed, or engaged. Just like I have a propen- sity to follow UTK football, I also have a propensity to look before I leap, absolutely the result of some pretty painful falls. To ensure I don’t experi- ence that pain again, I am careful now; I’ve learned by lessons, and I have become very engaged and committed to looking and analyzing the situation carefully first. I evaluate leaping situa- tions in a safer manner. How can you measure the propen- sity of a person to be and act safely? The Judgment Index™ is an assess- ment instrument designed to measure the relationship between values, pro- pensities, evaluative judgments, and performance outcomes. As a tool, it is not interested in measuring IQ/rational intelligence, psychological balance, or personality. What it does measure are those driving values which will cause a person to “lean” in the direction of good and safe judgment versus bad and unsafe judgment. Like the song “Do-Re-Mi” from the iconic movie The Sound of Music, we believe it is impor- tant to “start at the very beginning, it’s a very good place to start.” One’s personal values that drive the safety judgments we make and the actions we take are at the “very beginning” in the world of safety. The General Judgment & Safety Report is derived from the Judgment Index™ assessment. It takes roughly 10-minutes to complete and provides key specific measures to the following seven safety areas of concern: 1. Awareness: the degree to which a person will notice and “pick up on” the small dynamics of situations and circumstances that surround them in the work environment. 2. Focus: the degree to which a per- son will stay focused on the task at hand, and not become distracted or thought-scattered. 3. Following Directions: the degree to which a person will place value and importance to following instruction, protocol, and procedure. 4. Work-side Stress: the degree to which a person will be encumbered by stress occurring at work. 5. Self-side Stress: the degree to which a person will be encumbered by stress occurring in their personal lives, which is a major contributor to work-related accidents. 6. Care of Surroundings: the degree to which a person will have a strong Taken at a Tallaedga 500 race by Bill Wilson, CEO of Judgment IndexTM. Poor judgement regarding safety is everywhere! sense of their work environment and will work to maintain an unclut- tered and safe working area. 7. What is Important: the degree to which someone will have an ability to distinguish between that which is vital and that which is inciden- tal; the propensity to accentuate the vital, and mitigate unnecessary “rabbit trails” that lead to nowhere important. Imagine being able to have analyti- cal, data-based information on these seven key safety values before a per- son ever comes on the job, sits down on a piece of machinery, or begins to operate a piece of equipment. Instant- ly, there would be an understanding of what this person is inherently good at, where they can improve their safety level, and how to best communicate with them. Supervising them would be easier with the knowledge of where safety instruction should be focused. Safety begins with a greater clarity about propensity for good judgment and safety. y C. Stephen Byrum is the President and Chief of Subject Matter/Content Development for Judgment IndexTM. The Judgment IndexTM is an assessment instrument designed to measure the relationship between values, propensities, evaluative judgments, and performance outcomes. 18 Southeastern Construction Owners and Associates Roundtable One t hing t hat has remained consistent in construction probably since the Egyptians first built the pyramids is the seemingly inevitability of disputes. Scope, changes, schedule, payment, and quality encompass just some of the issues that typically lead owners and contractors to end up less than the best of friends. Sadly, dispute can be as much a part of a job as bricks and mortar. In recognition of this harsh reality, modern contracts frequently provide for a dispute resolution clause: what the parties agree will happen if they cannot negotiate or otherwise settle an issue between or among them- selves. These clauses take infinite forms, reflecting the respective bar- gaining power of the parties and likely their past experiences in the various forums available for the resolution of disputes. Whatever their particu- lars, most such clauses will address the structure of dispute resolution, the venue for resolution, the issue of attorney fees, and the availability of a jury trial. Structure is the most fundamental component of a dispute resolution clause. Underlying all such clauses is an implicit recognition of the extraordinary cost and delays too often associated with the litigation in the American sys- tem. If a case goes all the way through trial, the parties can spend thousands, if not millions, in legal and expert fees. A rough rule of thumb on complex cases is expenditure of 35-45 percent of the amounts in dispute in payments to the attorneys. Delays of several years before a trial can be held are more the rule rather than the exception. As a result, most dispute resolution clauses will mandate other approaches before the parties plunge into the abyss of the American legal system. The first alternative to ultimate liti- gation is structured negotiation of a dispute between the parties. These mandated negotiations can them- selves be tiered, for example, requir- ing the respective project managers to negotiate a claim within a certain time. If they are unable to resolve, then the negotiations are kicked up to a higher level, again with a time limit for resolution. On major jobs, it is common for there to be a third level of obligatory negotiations between senior executives. If negotiations fail, many dispute resolution clauses then mandate mediation, again before descending into litigation (or arbitration as dis- cussed below). Mediation is another form of negotiation, this time facili- tated by an outside third-party media- tor. It has gained considerable pop- ularity in the last thirty years as the costs of litigation have skyrocketed. Key to the process’s success is finding an experienced and skilled media- tor. The mediator does not make a decision as to the merits of the dis- pute. He or she listens to the par- ties’ respective assessments of their cases, identifies the parties’ interests, and evaluates (based on his or her experience) possible settlement alter- natives. Using shuttle diplomacy, the mediator works with both parties to arrive at a mutually acceptable (or Picking Your Poison: Dispute Resolution Clauses / LET’S TALK LEGAL // By Fred Lyon, The Lyon Firm2022 // www.scoar.org 19 mutually unacceptable) compromise. Done right, mediation can be a cost- effective way for the parties to put a dispute behind them and go on about their business without litigation. Such is the misery of litigation that some dispute resolution clauses pro- vide for arbitration as an alternative. Arbitration involves the selection of usually one to three arbitrators to hear the dispute, often chosen from a list provided by organizations such as the American Arbitration Associa- tion. These arbitrators usually have experience in the construction indus- try and may or may not be lawyers themselves. This expertise is sup- posed to lead to more informed deci- sions. Arbitration is like litigation in that the parties each present their cases in a hearing under oath with the presentation of evidence and exhib- its. The clause may also provide that unlike litigation, arbitration have lim- ited discovery, thus streamlining both the time and expense of the hear- ing. However, if unlimited discovery is allowed, then arbitration can be as complex as litigation. Arbitrations do not provide the opportunity for appeal except in very unusual circum- stances. After all else fails, then a dispute resolution clause can ultimately lead to litigation. But even then, the par- ties can provide for the shape that litigation will take. A key component is choice of venue or the jurisdiction where the case will be heard. In some cases, a project can be in one state and the dispute resolution clause may provide for venue and jurisdiction in another state entirely (note these clauses are not always enforceable, best to check out the law in the state where the project is before agreeing to venue and jurisdiction). By stipu- lating another jurisdiction, one party may be trying to gain home court advantage. The most logical place for resolution is the place where the proj- ect is located. A common misconception about American litigation is that the prevail- ing party is awarded its legal fees, to be paid by the loser. Such is the case in the United Kingdom (the so-called English rule) but not in the United States where each party pays its own lawyers regardless of result. Consequently, some dispute resolu- tion clauses seek to address this by providing that the party who wins in litigation (or arbitration) will be paid its fees by the loser. The presence of such a clause can increase the likeli- hood of litigation because a party can be so convinced of the merits of its position that it is willing to risk litiga- tion with the hopes it will not have to pay legal fees. The downside of this confidence is the inherent riskiness of litigation with results not subject to guarantee. An additional component of a well-crafted dispute clause is a waiver of jury trial. Whatever their noble roots in the English common law system, modern American juries are notoriously unpredictable and their decisions inexplicable (no need to discuss any of the cases over the last thirty years that demonstrate this reality). Moreover, construction disputes are often complex and the average American juror ill-equipped to understand, much less decide, a technical construction issue. Hence dispute resolution clauses may unequivocally provide that both par- ties waive a jury trial if the dispute makes it to litigation. These are some of the character- istics of a modern dispute resolution clause. There are no limits on what the parties can creatively agree to. However, keep in mind without a dis- pute clause, the default will be litiga- tion, possibly before a jury, with both sides to bear their own costs and fees. Experience suggests that is the least efficient way to resolve the inevitable disputes. Time spent upfront structur- ing a more economical alternative is time well spent. y Fred Lyon is a construction attor- ney and mediator with over 35 years of experience in contract drafting and dispute resolution. Learn more at www.lyonfirm.com.Next >