Dealing With the Construction Labor Shortage: 4 Tactics That Work
U.S. employers are currently facing a severe labor crisis, partly due to the aftereffects of the pandemic. In March 2021, 42% of employers reported to the National Federation of Independent Business (NFIB) that they had job positions they couldn’t fill. This was a record-high figure, breaking a 48-year average streak of 22%.
Moreover, the U.S. labor shortage is surprisingly complicated. For instance, Indeed.com had over 9 million job openings at the end of April 2021. At the same time, more than 7 million workers had lost their jobs to the pandemic. You’d think that high unemployment figures and numerous open positions would fit together like a jigsaw puzzle. But that wasn’t the case. Indeed found that most unemployed individuals were not urgently or actively looking for jobs. In fact, about 30% of them were not open to job search at all.
In this article, we’ll discuss how the labor shortages have affected the construction industry and what tactics you can use as a business owner to handle these shortages.
Construction Labor Challenges
The labor shortage has affected many industries, particularly construction, with 92% of contractors facing challenges when searching for skilled workers. Construction is one of the hardest-hit industries by the ongoing labor shortage. 42% of them reported turning down work due to scarce labor.
The COVID-19 pandemic and other factors outside the employer’s influence are to blame for this crisis. However, there’re still a few tricks you could pull to effectively deal with the construction labor shortage.
How To Come Out Ahead of the Labor Shortage
Despite the ongoing challenges of the labor shortage, there are things you can do to come out ahead. Follow these tips below to ensure you are prepared.
1. Focus on Employee Retention
The construction sector has one of the highest employee turnover rates in the country. It’s an unfortunate double whammy for contractors, builders and home service businesses. It’s hard enough to fill job positions as it is without constantly worrying about the possibility of more empty spots. Plus, replacing employees can be very expensive.
One way to cope with the talent shortage is to preserve the workforce you’ve already got. Here are some ways to keep employees from leaving their jobs.
- Offer career development opportunities
- Recognize and reward hard work and notable talent
- Engage your employees more intimately
- Invest in a safer and more comfortable workplace
- Develop a team-based work culture
Retaining employees comes down to trying your best to keep everybody happy. It could mean rethinking your work culture, meeting the needs of the many, and going out of your way to show appreciation.
2. Offer Competitive Pay With Perks
Compensation doesn’t seem to play a significant role in the current labor shortage. But that said, pay is not something you can easily dismiss. Salaries, wages, and benefits do influence a candidate’s decision to accept a job offer with pay being one of the top reasons many employees seek alternative employment.
Slightly higher pay and more employee perks are undeniable advantages in the highly competitive labor market. This is especially true for positions requiring specific skills and experience. Plus, if a slight bump in salaries keeps your workers happy and brings new hires your way, it’s worth saving you the cost of turnover, talent hunting and turning down projects.
Find a sweet spot between how much workers expect to get paid and what other employers are prepared to offer.
3. Look Into Alternative Talent Pipelines
It might be time to try out alternative labor sources if the familiar talent pools start drying out. In other words, be more creative, flexible, and open-minded with your hiring process. There might be a rich untapped talent pipeline lurking just beneath your nose. Here are some ideas on where to look.
Pull Workers From Other Commercial Sectors
A shortage in the construction labor market could mean surplus talent elsewhere. For example, you might find ready job candidates from the manufacturing, transport, and utility sectors.
Consider Mentorship and Training Programs
Training and mentorships are more of long-time labor solutions. However, protégées, trainees and interns can still fill in some semi-skilled labor gaps, even if indefinitely.
Work With Construction Recruiters
Labor recruitment agencies might have better chances of finding qualified talent on your behalf. The cost of hiring might go up a bit, but recruitment services more than pay for themselves in saved time and hassle.
4. Automate Wherever Possible
Historically, the construction industry has been slow at adopting tech innovations. But over recent years, builders, contractors and home service providers have started embracing digital methods. Contractors can now easily automate mundane tasks that would otherwise require human labor, like designing a website for lead generation or automating payroll.
Automation saves time, minimizes errors, saves costs and improves workplace safety.
The ongoing construction labor shortage might be a good time to re-evaluate your hiring and recruitment processes and overall HR structure. Remember, old solutions rarely work on new problems. So, look into new ways of sourcing and retaining qualified talent for your business.
The tips we’ve discussed here should give you some ideas of what to do. If you are looking for some help in applying these tactics, reach out to the Socius team.