Construction for dummies in Russia: save money and mind

Greetings English-speaking readers! This book is mainly about how things are in the construction industry in Russia. It contains our specific Russian features in the legislation and in the current situation in the economy. This book has become a comprehensive expression of the experience that I personally, or my colleagues, had to face in practical activities in construction. I got into construction quite by accident, I have no construction education, so I immediately had to figure out all issues on my own and look for ways to solve certain problems, without having any theoretical ideas.

Nevertheless, for 10 years in construction, I managed to be a foreman, designer, lawyer, economist and PTO engineer, supplier, project manager, certification specialist, commercial and executive director, customer and contractor, and I have seen enough of it all from the inside.

Moreover, I saw those aspects of construction and those nuances that not a word will be said in a construction university, both pluses and minuses, as well as the most common problems.

This book will not teach you how to build, assemble structures, pour concrete or lay bricks, but will give you a more advanced understanding of building and doing business in this area, i.e. about matters no less important than the direct construction process.

All in all, this book should be interesting.

People who want to be builders;

Students and graduates of construction universities;

Ordinary people or specialists of organizations who want or are forced to be customers of construction work in order to build or repair something;

People who want to manage construction organizations and earn money from this activity;

Designers and VET workers (in terms of parsing constant errors in estimates and projects).

In construction, there are two constant problems with personnel:

maintaining the optimal number of staff;

management of the composition and qualifications of employees.

1. Low predictability of work volumes

Much more factors affect the receipt of volumes of construction work than in other industries. For example, there is an Olympics or a World Cup – there is a construction site, no – accordingly, there is nothing to talk about. Only developers of residential complexes or districts have it easier in this sense, because they can plan the work as a whole and for 3 and 5 years ahead – but this is not more than 1% of the number of all organizations.

2. Taxation, and primarily VAT and a high percentage of deductions from wages

Most construction projects fall under the need to work on the general taxation system. Contractors on the simplified tax system do not fit into the system because their customers need input VAT, and because the maintenance of large facilities means an annual revenue of 200 million rubles, i.e. the impossibility of applying the USN.

Example. You received 100 rubles for the work performed. with VAT, while you need to officially pay a salary of 70 rubles to workers. What is left after paying taxes?

Answer: Shortage of 20.1 rubles. either wages or taxes.

3. Seasonality

Seasonality is determined not only by climatic conditions. It also depends on the budget. Basically, objects are put into operation in the spring and must be delivered by December, i.e. by the end of the financial year, respectively, from January to April-May, there may be no work at all, and from May there is a terrible shortage of people, when both factors add up.

4. Competition

For comparison, in the USSR there were around 10-15 thousand construction organizations, and a few years ago in Russia there were more than 100 thousand of them. Yes, not as powerful as the DCS and SMU used to be, provided with equipment, people, etc … And so , sometimes firms that have only one seal from their fixed assets. But 100 thousand ! It's an Achievement!

But how much higher the competition, and how much lower the level of training of specialists, because it holds back the profits received by the “builders”, and they are accordingly forced to save on everything and make do with less qualified personnel.

5. Self-regulation in construction

The principles of self-regulation, which apparently came from Masonic organizations on the principle of “pay a fee and if you come out with a face, we will accept you,” and the current state policy in this matter only leads to the degradation of all participants. SRO checks – fiction, paid fees – sleep, i.e. work calmly. At the same time, only the funds themselves are clearly in the black – in fact, parasites. At least contributions to SROs could be directed to training and education!

6. Low quality of management of the national economy in general and the construction industry in particular

It must be admitted that our condition directly depends on how we are managed.

7. Population depopulation

Including in view of the above reasons – minus about a million people a year.

1. Lack of permanent employees in the staff of the organization and social guarantees for workers

The number of AUP and ITR in organizations in general can consist of only one or two people when they solve the whole range of issues, and the main working staff are people who are recruited only at specific facilities.

There are more pants in large organizations, or in specialized installations of engineering networks, structures, etc., and then a couple of people of especially valuable employees can form the basis, and the rest will be involved in work only periodically.

2. Lack of opportunity / desire to improve qualifications