The Associated Contractors of America conducted a survey in 2021 which suggested that 43% of construction companies see gaps in their workforce as one of the top five challenges that they will experience in the next couple of years.
There are two main reasons for this labor shortage according to The Home Builders Institute. First is the return of migrant workers to their home countries due to the pandemic, and second is that construction professionals are retiring faster than they are entering the workforce.
However challenging this situation may look, construction companies should take labor shortages as an opportunity to improve their current hiring practices.
Here are some steps that general contractors can implement to their hiring processes to ensure a constant supply of high-quality employees and subcontractors.
The number of people training to become construction professionals is on the decline compared to other industries. However, it doesn't mean that there are no young aspirants entering the industry. You just need to be more proactive about finding them.
An effective solution to this is to work with trade schools to get the first option for their graduates.
A few ways to do this include:
Funding scholarship and apprenticeship programs
Running classes for other skills related to construction such as bookkeeping, networking, and budgeting
Cooperating with trade schools in creating graduation-to-employment programs such as an intranet job platform
Trade schools often struggle in giving support to their students in kick-starting their careers after they graduate.
This is a great opportunity for construction companies to step in and collaborate with trade schools to devise employment programs. Not only will it help start the career of fresh graduates, but it is also a great source of new, inexpensive talent for construction companies.
Furthermore, improving the number of trade school students securing employment soon after graduating may also attract more people to enter the construction industry in the long run.
Although recommending talent to other construction companies may seem detrimental to your hiring strategy, it should help you consistently secure the labor you need in the long term.
Hoarding all the best labor will create a monopoly. This in turn will push down wages for subcontractors, which will make it hard for new construction professionals to obtain work.
All these factors combined will only increase the shortage of skilled workers in the construction industry.
Instead, construction companies should share local subcontractors.
Aside from preventing a “talent monopoly” from developing, this will push contractors to elevate their quality of work which can help in boosting consumer confidence and demand.
This mutual sharing of subcontractors between construction companies also means that it will be less difficult for you to seek applicants and fill positions whenever you need to. Your company will be more appealing too to subcontractors because they know that it may lead to other work opportunities in the future – whether with you or with another company.
You can cooperate with non-competing businesses that also hire construction professionals if you are somewhat hesitant in sharing talent with your direct competitors. An example of this would be a residential construction company sharing talent with a commercial construction company.
Using one or two job sites is not enough to acquire talent. You should use as many online job boards as possible to broaden your reach. You can look at these job sites as "passive assets" that can draw applicants over time.
However, posting on a good number of job sites is still not sufficient. You should also establish a systematic hiring funnel as well across all your online job boards to hire in the most efficient way.
A well-thought hiring funnel will allow you to constantly get new talent without spending too much time in the process later on.
You should also see recruitment opportunities in other media such as newspaper ads, employee referral programs, social media, and even community college and trade school visits.
The bottom line is to throw your recruitment net as wide and efficient as you can to attract more applicants.
Engage Your Current Pool of Talent
Based on a 2017 study by FMI, only 39% of construction companies consider employee engagement as a key metric for their company’s growth. It is, however, vital that the level of effort you put into acquiring new subcontractors also matches that of retaining the current ones.
The two key factors to this are the following:
1. Positive experience for subcontractors - ensuring that each subcontractor will have a positive experience with your company doesn't need to be complicated. You can start with the small things like:
You can also benefit from getting project management software to guarantee an organized and efficient work environment for your subcontractors.
2. Work opportunities for subcontractors - Keep a database of your subcontractors and sort them by location and expertise. The database will make it easier for you to inform subcontractors of job opportunities that may be a good fit for them.
The best subcontractors will be the ones who want to improve their knowledge and skills over time.
It is therefore critical to have a strong employee development program in place to attract the appropriate people for the right jobs. Setting up training programmes for long-term subcontractors will not only attract new talent and get them at the skill level you need them to be, but it will also keep your current ones updated on new procedures in the field.
Career advancement programs can also help in preventing the possible shortage of experienced skilled trade professionals in the future.
Since more construction veterans are retiring, you should put more effort into developing the skills of young professionals entering the industry. Apart from assisting the growth of young skilled traders, you’re also building the next generation of leaders in the construction industry.
According to SHRM’s poll in 2016, 60-63% of workers see competitive compensation and benefits packages as important determinants for their job satisfaction.
Construction companies should take advantage of this and restructure their current compensation and benefits offerings to entice new talent and retain their current ones.
You don’t need to offer much more than what your competitors are offering when it comes to wages although it is better. However, it is essential that you pay at least what the market is paying and not below it.
Construction companies who offer below-the-market salaries tend to have inexperienced workers and are always in need of new ones because their past employees have either left the industry or went to competing companies.
It is a great idea as well to offer voluntary benefits to your employees in addition to the aforementioned core benefits. This will allow you to provide a wider range of benefits to your workers.
The costs of voluntary plans are either shouldered solely by the employee or partially by the employee and the employer, which makes it an effective way to increase worker satisfaction with little or no expense to your business.
Voluntary benefits can also fill coverages that are not included in some benefit programs such as dental and vision packages. It also gives the flexibility to each employee to customize their benefits according to their needs and lifestyle.
Acquiring talent at a steady pace is still possible despite the current labor crisis in the construction industry. You just need to be creative and innovative in your ways of attracting new and skilled candidates more than ever.
