How to Overcome the Construction Labor Shortage

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Though the U.S. economy has recovered from the Great Recession, a construction labor shortage persists, making it difficult for construction companies to complete work. The number of unfilled jobs in the construction sector rose from 202,000 in 2017 to 263,000 in 2018, according to the National Association of Home Builders.

It’s an issue you may be experiencing firsthand. You may have construction projects available but not enough hands on deck, creating a challenging situation. No construction business owner wants to commit to a project only to find they can’t complete it on time because of a shortage of skilled workers.

Finding the right workers can be difficult as well. Seventy-five percent of construction firms planned to hire new workers in 2018, but 78 percent of firms had trouble finding qualified workers, according to a survey from the Associated General Contractors of America. In addition, 82 percent of construction firms said they expect it to remain difficult, or get harder, to find and hire qualified workers.

This situation can leave many business owners feeling overwhelmed. How do you solve a problem that affects not only your company but the industry as a whole?

Fortunately, there are actions you can take.

What’s Causing the Construction Labor Shortage?

Finding the right solutions requires an understanding of the problem. Various circumstances have contributed to the construction labor shortage, but there are two main causes.

First, the construction industry lost more than 1.5 million jobs between December 2007 and June 2009, according to the U.S. Bureau of Labor Statistics, and many of those laid-off workers left the industry for good.

Second, fewer young people are interested in construction careers, leading to a dearth of skilled workers. For instance, the percentage of construction workers who are 24 years old or younger has declined in 48 states, and, nationally, the percentage of young construction workers declined nearly 30 percent from 2005 through 2016, according to the Wall Street Journal.

The shortage of skilled workers is detracting from the productivity and business growth of small construction companies across the country. Commercial and residential customers have construction projects in their plans — but when construction companies can’t access the workers they need, they have a difficult time meeting these customers’ needs.

How to Secure Skilled Workers

Rather than resigning to accomplish less with fewer workers than you need, construction company leaders can take steps to overcome the construction labor shortage. Consider these five strategies for improving your labor pool.

1. Make recruiting a year-round activity.

Don’t wait until your busy season to start locating and hiring the skilled workers you need. Instead, commit to recruitment all year, by attending job fairs, posting online job ads and filing promising applications or resumes to return to when you need them.

If you can’t take the time from your already busy schedule to focus on recruiting, consider hiring a part-time employee with human resources experience. This employee can help create and maintain a recruitment process and keep your company’s name and interests in front of potential job candidates. A new hire focused on recruiting could be a worthy investment of time and money so that you always have a pipeline of qualified workers when you need them.

To overcome the construction labor shortage, a business owner trains skilled workers

2. Reach out to students.

Take time to build relationships with trade schools or offer internships for students to get their foot in the door during the slower months. For instance, according to the Daily Reporter, Hawkeye Community College in Waterloo, Iowa, has students in the construction program building a new house to provide them with hands-on training. Consider getting involved in a similar project or allowing students to work on one of your own projects.

You could also volunteer to speak at high schools or colleges or offer your support and expertise to your local construction chapter. For example, Associated Builders and Contractors, Inc. is one organization that offers student chapters. If there’s not a local chapter, help start one.

College “isn’t for everyone,” Florida builder Doug Barton told Boston’s NPR station WBUR. Instead of pushing all students to pursue a college degree, high schools can introduce students to the possibilities offered by skilled labor jobs, which offer lucrative salaries without acquiring student loan debt. Construction company leaders like Barton are working to spread that information and ensure training is available to help build the construction labor pool.

3. Offer financial incentives for employee loyalty.

Your current employees likely have other options for employment, so it’s important to provide them with incentives to stay with your company. Think about offering a bonus to skilled laborers when a project is completed on time or under budget. While providing such financial incentives may cost you a small percentage of the job’s project, it will help keep productive workers coming back and save you money on recruiting new workers.

4. Provide adequate training for your workers.

Today’s workers want opportunities to continue learning and growing professionally, and by offering training, you can keep them engaged. Providing training is a win-win strategy. It results in more highly qualified employees for your business, and it also extends goodwill back to these employees; they’ll feel valued because of the time and money you invested in them.

5. Make sure your business is in top working order.

With a widespread construction labor shortage, potential employees have their choice of construction companies. The best workers will be most attracted to the companies that appear to value them and their safety. Make sure you have all your ducks in a row, such as establishing a strong workers’ compensation policy, providing training and using proper safety equipment. You may need to spend money to become fully equipped, but construction business loans are available for such uses. These efforts will ensure you can fulfill the needs of customers and keep performing at the top level.

Rather than feeling stressed by the skilled labor shortage, owners of small construction companies should start taking action. With these strategies, you’ll start overcoming the construction labor shortage now and into the future.

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