Reducing the Impact of Labor Shortages in the Construction Industry

Labor shortages are a persistent challenge in the construction industry. According to a study by the National Association of Home Builders, companies need to hire over 700,000 construction workers yearly to meet the nation’s building needs.

Staffing challenges can have detrimental effects on construction companies, causing issues like project delays or missed opportunities. Fortunately, project managers have many options to address their immediate labor needs and build a resilient workforce for long-term success.

The following steps can help your business address a labor shortage:

Step 1: Understand the Causes of Labor Shortages

Every region has different causes of a labor shortage, but as a whole, the construction industry is struggling to recruit and retain workers for these two reasons: 

• Aging workforce: One in five construction workers is 55 or older and approaching retirement. Meanwhile, fewer than 3% of young workers consider entering the construction industry, creating a labor supply shortage that’s been challenging to overcome.
• Housing deficit: The United States has a housing deficit of about 1.5 million homes and calls for thousands of additional skilled construction workers to reduce this shortfall. The demand for workers far outweighs the supply, requiring companies to ramp up their recruiting and retention strategies.

Other factors may influence a labor shortage in your area, which you can determine by examining demographic data, cost of living, the wages offered by competitors, available vocational training programs, and other information. Understanding these factors lays the groundwork for creating targeted recruitment strategies.

Step 2: Develop Robust Recruitment Strategies

Various factors likely contribute to your local construction labor shortage, necessitating a multifaceted approach. Consider integrating the following strategies into your recruitment game plan:

Leverage Social Media and Digital Platforms for Outreach

Many young job seekers use social media platforms like LinkedIn, TikTok, Facebook, and Instagram to obtain career advice, search for jobs, and network with other professionals.

To build a younger workforce, expand your reach through various social media channels. Create and share engaging content that appeals to the needs of young employees, such as relatable success stories or videos demonstrating a positive work culture.

Offer Competitive Wages and Benefits

Increasing wages can improve labor availability — especially if your local labor market is highly competitive. Improving employees’ fringe benefits might attract more employees, too.

In some cases, employers can reduce their vacancy rates by improving fringe benefits instead of increasing wages. These changes might include upgrading health insurance offerings, creating retirement options for workers, or increasing the number of paid days off workers get each year.

Reengage at the Student Level

The construction industry must reengage at the student level. By reestablishing and educating students about vocational schools and skilled trade education, the industry may be able to attract high school students who are still deciding what they want to do for a career.

High school students may become interested in the construction industry after hearing more about how they can climb the corporate ladder, grow their current skills, and earn a solid living by making a difference in their communities. Construction careers can also appeal to students who want to be active during their workdays.

Beyond reaching high school students, consider partnering with local trade schools and community colleges to participate in recruitment events or offer apprenticeship or internship programs. Additionally, it may be worth investigating government initiatives or workforce development programs, like the Rework America Alliance, to help you build a workforce.

Step 3: Invest in Employee Training and Development

Cross-training employees can be more efficient than onboarding new hires. It can also increase engagement and prevent existing employees from feeling stagnant in their careers, helping to reduce turnover.

For example, rather than hiring someone to handle project management tasks, you can upskill a trusted supervisor or assistant manager with a project management training session. 

Offer on-the-job training, certification programs, and continuing education opportunities to support employee growth and attract new talent. It’s vital to foster a culture that promotes learning and professional development to appeal to modern job seekers.

Step 4: Implement Flexible Work Arrangements

Today’s workers place a high importance on flexibility. Consider that 73% of Generation Z employees want flexible work options, like the ability to work remotely or choose their own hours. To attract a broader range of candidates, think about ways your company can provide more flexible work arrangements.

For instance, you might offer work-from-home options for project management, administrative, or cost-estimating tasks. You might also allow employees to choose their working hours within a certain time frame. The more you can help workers achieve work-life balance with flexible options, the higher your chances of recruiting and retaining talent.

Step 5: Utilize Technology and Automation

Construction companies can harness technology to reduce reliance on manual labor and simplify tedious processes. Consider the following ideas:

• Implement project management software and tools: Software programs can streamline various aspects of construction project management, such as stakeholder communications, workforce scheduling, and document management, reducing the administrative workload.
• Employ drones and robotics: You can use drones to survey construction sites and robots to complete repetitive tasks, like material handling, excavating, or bricklaying. 
• Use modular construction techniques: Modular construction systems are faster to build and require less labor than traditional options. According to McKinsey and Company, modular construction could allow home builders to accelerate project timelines by as much as 50% and reduce costs by up to 20%.

Adopting advanced technology and automation is also a way to attract and engage a younger talent pool. Over 90% of Generation Z job seekers consider a company’s technology when deciding between job offers. The goal is to show young workers that the construction industry is innovative — and it can lead to a lucrative and rewarding career.

Step 6: Tap Into Regional Markets

If you urgently need workers, consider expanding your outreach and tapping into nonlocal markets.

Supply and demand for labor vary across each state. Contractors experiencing reduced labor availability in a specific market can source subcontractors and workers in areas where labor shortages are not a problem. Contractors can either pre-fabricate portions of the project in areas not experiencing labor shortages or compensate workers willing to relocate to the project site.

Contact Spire to Solve Complex Project Challenges

Labor shortages can have dire consequences for a construction company, impacting productivity, timelines, and work quality. With careful planning and effort, firms can take proactive steps to build a resilient workforce and maintain operational efficiency.

Rely on Spire Consulting Group to assist you in building your construction team. We provide tailored construction consulting and management services, including full-service project planning, CPM scheduling, and staff augmentation to help you see your vision through.

Let us forecast your labor needs so you can proactively address a shortage before it causes delays. Contact us today to learn how we can keep your construction projects moving from start to finish.

The content included in this article is for informational purposes only and does not reflect the opinions or recommendations expressed by any individual unless otherwise stated.