Construction boss Alison Mirams’ quick fix for a troubled industry
The construction industry would suffer fewer insolvencies – saving the industry and wider community many millions of dollars – if a builder’s liability was capped at a multiple of their profit margin, outgoing Roberts Co executive chairman Alison Mirams says.
Rather than carrying half – or even all – liability for a commercial contract, as they typically do under fixed-price contracts that leave builders vulnerable to sharply rising costs, limiting their losses and passing on more of it to developers would keep more builders in business, Ms Mirams said on Thursday.
“On a $100 million contract, you might have a 5 per cent profit, or $5 million. If your loss was capped at $5 million or even twice that at $10 million, then you would at least know the worst-case downside risk,” she told The Australian Financial Review.
“The way contracts are written at the moment [liability] is 50 per cent of a contract sum. Sometimes it is at 100 per cent of a contract sum and sometimes is uncapped. When it starts going south, you’re billed forever. You’re handing the keys to liquidate the company if it’s really bad.”
By contrast developers, which typically took a 20 per cent profit margin, should bear more of the risks of a project, Ms Mirams said.
“If the industry would just change that, it would save a lot of companies.”
She pushed back against the idea that capping builders’ liabilities would let dodgy contractors get off scot-free.
“Don’t use dodgy builders,” Ms Mirams said. “It’s quite simple.”
But while sustainability of the industry remains an ongoing concern, from next week it will no longer be one over which she has any responsibility. Ms Mirams, who turns 50 this year, is retiring from construction.
She announced her retirement to colleagues on Thursday and will leave the company next Friday. After stepping down as CEO last February – succeeded by John Holland executive Matt Bourne – Ms Mirams worked part-time. She left the Roberts Co board at the end of December.
She and husband Paul Mirams have a 10-year-old son.
“There is one thing in life you can’t have more of and that’s time,” she said.
“The past year of stepping back has shown me how important time is. I’ve worked for 30-plus years in the industry and now I’m going to step back and have more time.”
Ms Mirams, whose career has taken her from being a quantity surveyor with Multiplex, to Lendlease’s general manager for NSW and ACT construction, to Roberts Co CEO, has made a name pushing the industry to become more family-friendly and less sexist.
Roberts Co under her leadership championed a five-day working week on site – a challenge to the established practice of working on Saturdays as well – a move she said would improve the industry for both men and women, and make it easier to recruit women to the labour-starved sector.
“We have started a conversation that is driving change,” Ms Mirams said. “It’s not finished and it’ll take years to embed it.”
She has strongly backed the Construction Industry Culture Taskforce, a body linking the NSW and Victorian governments and large contractors, and will remain a member of the federal government’s National Construction Industry Forum.
There’s a long way to go.
Five-day weeks
“I haven’t missed the litigious, aggressive nature of the industry and it’s been really nice to step back,” she said.
“I miss the people, the daily chats, but I don’t miss the harshness of the industry and the aggression.”
But Roberts Co is still pushing for five-day weeks under Mr Bourne.
“All of the NSW portfolio is working five days a week. That portfolio was secured under Matt’s leadership.”
As people saw how five-day weeks worked in practice, they wanted it more, Ms Mirams said.
“Enough people now have experienced it,” she said. “Workers are saying ‘We want to work five days a week’. That benefits men and women – not just women.”
A better working culture in construction would protect health and save money.
Work-related fatalities, injuries and illnesses in 2018 cost $6.1 billion, the productivity cost of employees consistently working overtime was $708 million, mental ill-health cost $643 million and the estimated costs of construction worker suicides were $533 million, a report commissioned by the NSW and Victorian governments found.
“While we have pushed to make it a more gender-equitable industry, the big thing is you have to fix the industry for men for women to benefit,” Ms Mirams said. “It’s a people issue.”
