How to overcome the labor shortage so prevalent in the industry.
Let’s face it, there always seems to be a problem to work around within the construction industry. Projects come in and the materials needed for the project are back ordered for weeks. Either the company’s backlog is insufficient to keep its crews employed, or there is so much work that they cannot locate enough skilled workers to cover the workload. Such problems exist at all levels within the industry. Turning those problems into opportunities takes foresight and planning.
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As the U.S. economy improves and business opportunities increase, the construction industry is faced with significant problems. Among these problems is a lack of a sufficient amount of skilled construction workers to staff the nation’s construction firms in order to keep up with the growing demand. This diminished supply places upward pressure on labor costs associated with construction projects resulting in higher prices.
In December of 2014, The Associated General Contractors of America released a study of construction firms in the United States titled the Workforce Shortage Report.
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A few key statistics included in the Workforce Shortage Report include:
· 8 out of 10 construction firms cannot find sufficient amounts of qualified employees
· 19% are investing in labor saving equipment and tools
· 82% of those surveyed believe that it will be more difficult to find qualified workers over the next 12 months
As the U.S. based construction workforce becomes increasingly thinly spread, owners and managers of construction firms will be required to approach the problem of labor shortage creatively in order to convert these problems into opportunities. A key to overcoming the labor shortage in the construction industry is to invest in current employees to increase their skills, knowledge and abilities, as well as to support existing employees with labor-saving tools and equipment.
The tendency for many owners and managers in the construction industry is to increase recruiting and hiring efforts as the workload increases. However, going into panic mode and hiring new employees for the sake of hiring can expose businesses to sources of liability that could otherwise be avoided. As workloads increase, it is best for managers to first ask the question of whether or not they should invest in their existing workforce before they hire and onboard new employees.
Investing in existing employees has several key advantages when compared to the option of expanding the workforce for the company.
· Current employees know the culture and company – Employees who have been with a company for an extended period are more familiar with how the company operates. They understand the policies of the company and how the company runs its project sites. New employees will require time to become acclimated to the company and its culture which can impede their productivity.
· Current employees are a known entity – Employees who are part of the company are familiar to management. Managers are aware of their strengths and weaknesses and may be better able to manage and lead them. New employees are unknown and will take time to fit into the company, and for management to learn their strengths.
· Reduction in onboarding costs – Companies are significantly burdened with onboarding costs for new employees. These costs include safety training, administrative paperwork, and drug testing. It is suggested that companies carefully compare the costs associated with hiring new employees and the cost of increasing the productivity of existing employees to see which costs are generally greater.
· Reduction in risk – New employees pose a greater risk for injury than employees who have been with the company for an extended period of time. Studies have been done that show a significant increase in injury rates for employees who are on the job for less than one year. Hiring new employees with less experience and moving them quickly into the field to meet demands may expose the company to increased losses.
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Construction firms who want to invest in their employees instead of hiring additional employees have different options at their disposal.
The first way to increase the productivity of a workforce is to invest in equipment, tools and machinery that increase productivity, as well as place less stress on the existing workforce. Companies that purchase tools and equipment to enhance their workforce’s ability to do more work with fewer employees are investing their employees making them more efficient. This investment can also improve morale and increase employee retention because employees feel that they are not being worn out by the physical labor.
Companies can also improve the knowledge, skills and abilities of their employees by offering training to their workforce. Training teaches employees how to perform work more efficiently and at a higher quality standard. This allows companies to do more work with the same or fewer employees creating a more efficient work environment. Training can be delivered online through services such as Construct-Ed, Inc. (www.construct-ed.com), on the job training on project sites or through brick and mortar training.
Investing in the company’s current workforce through training or new equipment will not eliminate the need to hire new employees. It may, however, take the pressure off of the hiring process to allow the company to make smart decisions when deciding to bring a new employee into the company. As Benjamin Franklin said, “Haste makes waste.”
