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From the ground up: Reimagining
well-being
in the construction industry

By: Vienna Morrill,

Philip is a Staff Consultant in BerryDunn’s Management and Information Technology Practice, bringing extensive experience in project management, construction operations, and consulting to help organizations streamline processes and achieve their business objectives. With a background spanning complex design-build project management and IT systems implementation, Philip understands the importance of balancing operational efficiency with workforce well-being. Drawing on years of leadership in dynamic, high-value environments, he works collaboratively with teams to develop practical solutions that support both people and performance.

Philip Pitcock

01.28.25

overview industries services professionals

Employees in the construction industry have come to expect high physical demands, unrelenting deadlines, and a culture that discourages vulnerability. Unsurprisingly, the sector is now confronting a crisis in mental health and employee satisfaction. So-called “diseases of despair,” including substance abuse disorder, alcohol use disorder, isolation, depression, and suicide, are shockingly common. Suicide rates among construction workers totaled 5,200 in 2022—over five times the number of safety-related injuries in the same time period. A study by the Center for Construction Research and Training showed nearly one in five construction workers reported symptoms of anxiety or depression, yet less than 16% of these workers sought professional help.

Barriers to well-being in the construction industry

Like many male-dominated industries, construction workplaces are often aligned with traditional masculine values such as self-reliance and stoicism, which can encourage resistance to traditional well-being approaches. Language barriers or literacy challenges may also exist, further complicating any potential interventions. Organizations often rely on ad-hoc, individual-level programs, rather than comprehensively integrating well-being into their operations. This approach “encourag[es] workers to identify and seek help for their problems but does not commit organizations or the industry to tak[e] action to reduce the risks inherent to the sector.” As I previously explored in Cultivating a culture of well-being, such interventions fail to address key workplace factors such as workload, autonomy, communication, and culture – the factors that ultimately help support employee health and well-being.

Strategies for building a culture of well-being

Just as it took decades for workplace safety and physical health to be holistically integrated into the construction industry, creating a sustainable culture of well-being will require focus, dedication, and time. The effort is worthwhile: Studies have shown that investing in employee well-being increases productivity, reduces absenteeism, and improves employee retention.

Given the unique nature of the construction industry, here are some strategies to consider:

Leadership commitment. Well-being should be a core value, championed by leadership. When executives and on-site managers prioritize their own well-being and actively participate in wellness programs, it sets a powerful example for the entire organization by making mental health needs more visible to the organization as a whole. Over time, this commitment can serve to reduce the perceived stigma associated with mental health.
Enhanced communication. Improving communication between management and on-site workers reduces ambiguity and anxiety, while helping workers feel more autonomous. Simultaneously, using enhanced workforce planning tools can help management better allocate resources, helping to prevent burnout.
Integrated policies. Policies should reflect a holistic commitment to well-being. This includes alternative scheduling models (e.g., flexible hours/four-day workweeks) and comprehensive health and financial benefits. Policies should be tailored to the unique needs of the employees, such as offering financial literacy workshops or Earned Wage Access programs.
Community building. Foster a sense of community from day one. Design onboarding practices that introduce new hires to the values, norms, and expectations of your organization. Provide opportunities for socialization, mentoring, and collaboration, as a strong sense of belonging can enhance overall well-being. Encourage team-building activities, social events, and peer support networks. Programs like MATES in Construction and the Construction Industry Alliance for Suicide Prevention are actively raising awareness.
Continuous feedback. Well-being means different things to different people. Regularly ask for feedback from employees about their overall employee experience – not just your well-being initiatives. Use this feedback to make continuous improvements, and then communicate those improvements. When employees feel heard and valued, their engagement and satisfaction increase.
Safety beyond compliance. Companies should aim to move beyond a culture of ‘safety-as-compliance’ to one in which safety and well-being are considered symbiotic. Inherent to this understanding is the need to cultivate environments in which workers feel safe discussing all elements of their well-being without fear of retaliation. Government and regulatory agencies are increasingly mandating mental health and well-being requirements in occupational health and safety guidelines; savvy organizations may wish to address these proactively. Standards such as ISO 453003 (Psychological Health and Safety) are rapidly gaining traction, and provide clear and implementable frameworks for:

Identifying workload as a hazard
Engaging workers for input
Monitoring and controlling psychosocial risks

As an example, Clause 5.4 of ISO 45003 emphasizes the identification and management of psychosocial hazards, with particular focus paid to those hazards stemming from excessive workloads, unrealistic deadlines, or conflicting demands.

Embracing technology. Devices that monitor fatigue, physical strain, and exposure to harmful conditions are being introduced to improve safety and reduce workplace accidents; moreover, AI-powered tools are currently being developed to predict worker fatigue, identify stress triggers, and address workplace hazards—both seen and unseen. While still new, these technologies could one day enable a proactive approach to workforce well-being and safety, shifting the focus from reactive interventions to predictive well-being management.

The construction industry has long been defined by resilience, precision, and a commitment to craft – while the well-being of those doing the work has largely been neglected. It’s time for that approach to change. Just as physical safety transformed from an afterthought to an industry cornerstone, mental health and holistic employee well-being must be prioritized and integral to every facet of construction operations.

This shift is not merely a moral imperative but a strategic necessity—one that fosters a healthier, more productive, and more sustainable workforce. By championing leadership commitment, enhancing communication, embracing innovative technologies, and fostering a culture of trust and inclusion, the industry can pave the way for lasting change. The journey ahead is complex, but the blueprint is clear: a workforce that feels valued, supported, and heard will not only thrive but also drive the construction industry toward a stronger and more resilient future.

If you have any questions about well-being programs or questions about your specific situation, please contact our Well-being Consulting team. We’re here to help.

Topics: well-being, well-being consulting

Construction

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Vienna Morrill
Senior Manager

T 207.541.2287

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Well-being Consulting Services

What are the top three areas of improvement right now for your business? In this third article of our series, we will focus on how to increase business value by aligning values, decreasing risk, and improving what we call the “four C’s”: human capital, structural capital, social capital, and consumer capital.

To back up for a minute, value acceleration is the process of helping clients increase the value of their business and build liquidity into their lives. Previously, we looked at the Discover stage, in which business owners take inventory of their personal, financial, and business goals and assemble information into a prioritized action plan. Here, we are going to focus on the Prepare stage of the value acceleration process.

Aligning values may sound like an abstract concept, but it has a real world impact on business performance and profitability. For example, if a business has multiple owners with different future plans, the company can be pulled in two competing directions. Another example of poor alignment would be if a shareholder’s business plans (such as expanding the asset base to drive revenue) compete with personal plans (such as pulling money out of the business to fund retirement). Friction creates problems. The first step in the Prepare stage is therefore to reduce friction by aligning values.

Reducing risk

Personal risk creates business risk, and business risk creates personal risk. For example, if a business owner suddenly needs cash to fund unexpected medical bills, planned business expansion may be delayed to provide liquidity to the owner. If a key employee unexpectedly quits, the business owner may have to carve time away from their personal life to juggle new responsibilities.

Business owners should therefore seek to reduce risk in their personal lives, (e.g., life insurance, use of wills, time management planning) and in their business, (e.g., employee contracts, customer contracts, supplier and customer diversification).

Intangible value and the four C's

Now more than ever, the value of a business is driven by intangible value rather than tangible asset value. One study found that intangible asset value made up 87% of S&P 500 market value in 2015 (up from 17% in 1975). Therefore, we look at how to increase business value by increasing intangible asset value and, specifically, the four C’s of intangible asset value: human capital, structural capital, social capital, and consumer capital.

Here are two ways you can increase intangible asset value. First of all, do a cost-benefit analysis before implementing any strategies to boost intangible asset value. Second, to avoid employee burnout, break planned improvements into 90-day increments with specific targets.

At BerryDunn, we often diagram company performance on the underlying drivers of the 4 C’s (below). We use this tool to identify and assess the areas for greatest potential improvements:

By aligning values, decreasing risk, and improving the four C’s, business owners can achieve a spike in cash flow and business value, and obtain liquidity to fund their plans outside of their business.

If you are interested in learning more about value acceleration, please contact the business valuation services team. We would be happy to meet with you, answer any questions you may have, and provide you with information on upcoming value acceleration presentations.

Article

The four C's: Value acceleration series part three (of five)

This is our second of five articles addressing the many aspects of business valuation. In the first article, we presented an overview of the three stages of the value acceleration process (Discover, Prepare, and Decide). In this article we are going to look more closely at the Discover stage of the process.

In the Discover stage, business owners take inventory of their personal, financial, and business goals, noting ways to increase alignment and reduce risk. The objective of the Discover stage is to gather data and assemble information into a prioritized action plan, using the following general framework.

Every client we have talked to so far has plans and priorities outside of their business. Accordingly, the first topic in the Discover stage is to explore your personal plans and how they may affect business goals and operations. What do you want to do next in your personal life? How will you get it done?

Another area to explore is your personal financial plan, and how this interacts with your personal goals and business plans. What do you currently have? How much do you need to fund your other goals?

The third leg of the value acceleration “three-legged stool” is business goals. How much can the business contribute to your other goals? How much do you need from your business? What are the strengths and weaknesses of your business? How do these compare to other businesses? How can business value be enhanced? A business valuation can help you to answer these questions.

A business valuation can clarify the standing of your business regarding the qualities buyers find attractive. Relevant business attractiveness factors include the following:

Market factors, such as barriers to entry, competitive advantages, market leadership, economic prosperity, and market growth
Forecast factors, such as potential profit and revenue growth, revenue stream predictability, and whether or not revenue comes from recurring sources
Business factors, such as years of operation, management strength, customer loyalty, branding, customer database, intellectual property/technology, staff contracts, location, business owner reliance, marketing systems, and business systems

Your company’s performance in these areas may lead to a gap between what your business is worth and what it could be worth. Armed with the information from this assessment, you can prepare a plan to address this “value gap” and look toward your plans for the future.

Next up in our value acceleration series is all about what we call the four C's of the value acceleration process.

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The discover stage: Value acceleration series part two (of five)

This is the first article in our five-article series that reviews the art and science of business valuation. The series is based on an in-person program we offer from time to time.

Did you know that just 12 months after selling, three out of four business owners surveyed “profoundly regretted” their decision? Situations like these highlight the importance of the value acceleration process, which focuses on increasing value and aligning business, personal, and financial goals. Through this process, business owners will be better prepared for business transitions, and therefore be significantly more satisfied with their decisions.

Here is a high-level overview of the value acceleration process. This process has three stages, diagrammed here:

The Discover stage is also called the “triggering event.” This is where business owners take inventory of their situation, focusing on risk reduction and alignment of their business, personal, and financial goals. The information gleaned in this stage is then compiled into a prioritized action plan utilized in future stages.

In the Prepare stage, business owners follow through on business improvement and personal/financial planning action items formed in the discover stage. Examples of action items include the following:

Addressing weaknesses identified in the Discover stage, in the business, or in personal financial planning
Protecting value through planning documents and making sure appropriate insurance is in place
Analyzing and prioritizing projects to improve the value of the business, as identified in Discover stage
Developing strategies to increase liquidity and retirement savings

The last stage in the process is the Decide stage. At this point, business owners choose between continuing to drive additional value into the business or to sell it.

Through the value acceleration process, we help business owners build value into their businesses and liquidity into their lives.

Read more! In our next installment of the value acceleration blog series, we cover the Discover stage.

Article

The process: Value acceleration series part one (of five)

Executive compensation, bonuses, and other cost structure items, such as rent, are often contentious issues in business valuations, as business valuations are often valued by reference to the income they produce. If the business being valued pays its employees an above-market rate, for example, its income will be depressed. Accordingly, if no adjustments are made, the value of the business will also be diminished.

When valuing controlling ownership interests, valuation analysts often restate above- or below-market items (compensation, bonuses, rent, etc.) to a fair market level to reflect what a hypothetical buyer would pay. In the valuation of companies with ESOPs, the issue gets more complicated. The following hypothetical example illustrates why.

Glamorous Grocery is a company that is 100% owned by an ESOP. A valuation analyst is retained to estimate the fair market value of each ESOP share. Glamorous Grocery generates very little income, in part because several executives are overcompensated. The valuation analyst normalizes executive compensation to a market level. This increases Glamorous Grocery’s income, and by extension the fair market value of Glamorous Grocery, ultimately resulting in a higher ESOP share value.

Glamorous Grocery’s trustee then uses this valuation to establish the market price of ESOP shares for the following year. When employees retire, Glamorous Grocery buys employees out at the established share price. The problem? As mentioned before, Glamorous Grocery generates very little income and as a result has difficulty obtaining the liquidity to buy out employees.

This simple example illustrates the concerns about normalizing executive compensation in ESOP valuations. If you reduce executive compensation for valuation purposes, the share price increases, putting a heavier burden on the company when you redeem shares. The company, which already has reduced income from paying above-market executive compensation, may struggle to redeem shares at the established price.

While control-level adjustments may be common, it is worth considering whether they are appropriate in an ESOP valuation. It is important that the benefit stream reflect the underlying economic reality of the company to ensure longevity of the company and the company’s ESOP.

Questions? Our valuation team will be happy to help.

BerryDunn’s Business Valuation Group partners with clients to bring clarity to the complexities of business valuation, while adhering to strict development and reporting standards. We render an independent, objective opinion of your company’s value in a reporting format tailored to meet your needs. We thoroughly analyze the financial and operational performance of your company to understand the story behind the numbers. We assess current and forecasted market conditions as they impact present and future cash flows, which in turn drives value.

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Compensation, bonuses, and other factors that can make or break an Employee Stock Ownership Plan (ESOP)

Read this if your CFO has recently departed, or if you're looking for a replacement.

With the post-Covid labor shortage, “the Great Resignation,” an aging workforce, and ongoing staffing concerns, almost every industry is facing challenges in hiring talented staff. To address these challenges, many organizations are hiring temporary or interim help—even for C-suite positions such as Chief Financial Officers (CFOs).

You may be thinking, “The CFO is a key business partner in advising and collaborating with the CEO and developing a long-term strategy for the organization; why would I hire a contractor to fill this most-important role?” Hiring an interim CFO may be a good option to consider in certain circumstances. Here are three situations where temporary help might be the best solution for your organization.

Your organization has grown

If your company has grown since you created your finance department, or your controller isn’t ready or suited for a promotion, bringing on an interim CFO can be a natural next step in your company’s evolution, without having to make a long-term commitment. It can allow you to take the time and fully understand what you need from the role — and what kind of person is the best fit for your company’s future.

BerryDunn's Kathy Parker, leader of the Boston-based Outsourced Accounting group, has worked with many companies to help them through periods of transition. "As companies grow, many need team members at various skill levels, which requires more money to pay for multiple full-time roles," she shared. "Obtaining interim CFO services allows a company to access different skill levels while paying a fraction of the cost. As the company grows, they can always scale its resources; the beauty of this model is the flexibility."

If your company is looking for greater financial skill or advice to expand into a new market, or turn around an underperforming division, you may want to bring on an outsourced CFO with a specific set of objectives and timeline in mind. You can bring someone on board to develop growth strategies, make course corrections, bring in new financing, and update operational processes, without necessarily needing to keep those skills in the organization once they finish their assignment. Your company benefits from this very specific skill set without the expense of having a talented but expensive resource on your permanent payroll.

Your CFO has resigned

The best-laid succession plans often go astray. If that’s the case when your CFO departs, your organization may need to outsource the CFO function to fill the gap. When your company loses the leader of company-wide financial functions, you may need to find someone who can come in with those skills and get right to work. While they may need guidance and support on specifics to your company, they should be able to adapt quickly and keep financial operations running smoothly. Articulating short-term goals and setting deadlines for naming a new CFO can help lay the foundation for a successful engagement.

You don’t have the budget for a full-time CFO

If your company is the right size to have a part-time CFO, outsourcing CFO functions can be less expensive than bringing on a full-time in-house CFO. Depending on your operational and financial rhythms, you may need the CFO role full-time in parts of the year, and not in others. Initially, an interim CFO can bring a new perspective from a professional who is coming in with fresh eyes and experience outside of your company.

After the immediate need or initial crisis passes, you can review your options. Once the temporary CFO’s agreement expires, you can bring someone new in depending on your needs, or keep the contract CFO in place by extending their assignment.

Considerations for hiring an interim CFO

Making the decision between hiring someone full-time or bringing in temporary contract help can be difficult. Although it oversimplifies the decision a bit, a good rule of thumb is: the more strategic the role will be, the more important it is that you have a long-term person in the job. CFOs can have a wide range of duties, including, but not limited to:

Financial risk management, including planning and record-keeping
Management of compliance and regulatory requirements
Creating and monitoring reliable control systems
Debt and equity financing
Financial reporting to the Board of Directors

If the focus is primarily overseeing the financial functions of the organization and/or developing a skilled finance department, you can rely — at least initially — on a CFO for hire.

Regardless of what you choose to do, your decision will have an impact on the financial health of your organization — from avoiding finance department dissatisfaction or turnover to capitalizing on new market opportunities. Getting outside advice or a more objective view may be an important part of making the right choice for your company.

BerryDunn can help whether you need extra assistance in your office during peak times or interim leadership support during periods of transition. We offer the expertise of a fully staffed accounting department for short-term assignments or long-term engagements―so you can focus on your business. Meet our interim assistance experts.

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Three reasons to consider hiring an interim CFO

In a closely held business, ownership always means far more than business value. Valuing your business will put a dollar figure on your business (and with any luck, it might even be accurate!). However, ownership of a business is about much more than the “number.” To many of our clients, ownership is about identity, personal fulfillment, developing a legacy, funding their lifestyle, and much more. What does business ownership mean to you? In our final article in this series, we are going to look at questions around what ownership means to different people, explore how to increase business value and liquidity, and discuss the decision of whether to grow your business or exit—and which liquidity options are available for each path.

While it may seem counterintuitive, we find that it is best to delay the decision to grow or exit until the very end of the value acceleration process. After identifying and implementing business improvement and de-risking projects in the Discover stage and the Prepare stage (see below), people may find themselves more open to the idea of keeping their business and using that business to build liquidity while they explore other options.

Once people have completed the Discover and Prepare stages and are ready to decide whether to exit or grow their business, we frame the conversation around personal and business readiness. Many personal readiness factors relate to what ownership means to each client. In this process, clients ask themselves the following questions:

Am I ready to not be in charge?
Am I ready to not be identified as the business?
Do I have a plan for what comes next?
Do I have the resources to fund what’s next?
Have I communicated my plan?

On the business end, readiness topics include the following:

Is the team in place to carry on without me?
Do all employees know their role?
Does the team know the strategic plan?
Have we minimized risk?
Have I communicated my plan?

Whether you choose to grow your business or exit it, you have various liquidity options to choose from. Liquidity options if you keep your business include 401(k) profit sharing, distributions, bonuses, and dividend recapitalization. Alternatively, liquidity options if you choose to exit your business include selling to strategic buyers, ESOPs, private equity firms, management, or family.

When it comes to liquidity, there are several other topics clients are curious about. One of these topics is the use of earn-outs in the sale of a business. In an earn-out, a portion of the price of the business is suspended, contingent on business performance. The “short and sweet” on this topic is that we typically find them to be most effective over a two- to three-year time period. When selecting a metric to base the earn-out on (such as revenue, profit, or customer retention), consider what is in your control. Will the new owner change the capital structure or cost structure in a way that reduces income? Further, if the planned liquidity event involves merging your company into another company, specify how costs will be allocated for earn-out purposes.

Rollover equity (receiving equity in the acquiring company as part of the deal structure) and the use of warrants/synthetic equity (incentives tied to increases in stock price) is another area in which we receive many questions from clients. Some key considerations:

Make sure you know how you will turn your rollover equity into cash.
Understand potential dilution of your rollover equity if the acquiring company continues to acquire other targets.
Make sure the percentage of equity relative to total deal consideration is reasonable.
Seller financing typically has lower interest rates and favorable terms, so warrants are often attached to compensate the seller.
Warrants are subject to capital gains tax while synthetic equity is typically ordinary income. As a result, warrants often have lower tax consequences.
Synthetic equity may work well for long-term incentive plans and for management buyouts.

We have found that through the value acceleration process, clients are able to increase business value and liquidity, giving them control over how they spend their time and resources.