7 Ways to Adapt to Labour Shortage in Construction

Construction labor shortage

If you find it challenging to find skilled workers to fill vacancies on your job or service sites, you’re not alone. The construction industry has reported a record number of job vacancies and the most struggling subindustries are masonry, painting, and electrical work. According to StatCan, vacancies in construction increased to 62,600 in the second quarter of 2021, which is the highest it’s been since 2015. The question becomes – in an industry where labor shortage is so prevalent, how do you make things work if there’s no one to work with?

Before we get into strategies you can use to manage the shortage, it’s important we understand some of the history first (though we understand if you want to skip the history and go right to the strategies). The construction labor shortage has been a problem for over a decade, but the COVID-19 pandemic has put even more pressure on the already struggling workforce. The skilled labor shortage in the trades has been a major concern for over a decade, particularly since the global financial crisis of 2008. In the 2020 Construction Outlook Survey, 72% of the construction firms anticipated labor shortages to be the biggest hurdle in the next year. And just as expected, in addition to the price of materials, the skilled labor shortage is not getting any better.

The pandemic has exacerbated the shortage across all kinds of construction jobs, including project managers, general laborers, and skilled workers like electricians, welders, and carpenters. There are many reasons for this. 

Reasons why labor shortage exists in the construction industry

  • Retiring workforce: The average age of a construction industry worker is 43 years old. It is estimated that 40% of all workers in the industry are 45–64.
  • Millennials are not interested: While trades jobs are relatively well-paid, younger generations prefer less physically demanding jobs. 
  • Myths about the industry: According to a report by the USG Corporation + US Chamber of commerce, the top myth of the construction industry is that “Construction jobs are all Dirty Jobs”.
  • The pandemic factor: Many people are either ill or take care of someone with coronavirus. They may not consider returning to work, at least in the meantime, or do not want to come to work for fear of infection.
  • Lack of diversity: Diversifying the construction industry and hiring from communities that the industry has previously ignored. Broadening recruitment, eliminating disparities, and widening recruitment networks could be the answer to the construction skills shortage.

Why it’s important to act and tackle the skills shortage

While the overall result of a construction labor shortage is a loss in productivity, reviewing the specific impact areas will help us identify when the shortage is affecting us directly. You may notice:

  • An overstretched skilled workforce
  • Risks of burnout and quality of work
  • Project delays
  • Increased costs
  • Inability to scale your construction business

The construction labor shortage is bad not just for the business itself, but for the people at work. Worker safety is a top concern since statistics show that 34.9% of new workers suffer injuries during their first year on the job.

Now that we’ve reviewed some of the history, let’s move on to the good news – there are a number of things that construction business owners can do to combat the skill shortage.

How to adapt to labor shortage in construction

Strategies You Can Use to Manage Skilled Labour Shortage

  1. Rethink your Tech

With a younger,  tech-savvy workforce coming to play (and work!) contractor businesses should rethink the technical aspect of their employees’ work. Younger generations are born into technology, and consequently are skilled at adapting to it. If you’re still using the proverbial pen and paper to track your jobs and services, it will be hard to keep workers engaged. By upgrading your construction business management software, you will be moving with change, and be able to better manage your workforce. Happier and engaged staff tend to stay with your business for longer.

  2. Improve Workforce Retention Rates

On average, the turnover rate in the construction industry is reaching about 64% in employees who are younger than 24. Fortunately, there are ways to improve worker retention rates. Tactics such as effective training and increased communication, and better camaraderie also help to retain skilled workers for longer. Companies with a people-focused culture can retain workers a lot more easily while earning a reputation as a great place to work.

3. Use your own time more efficiently

When you spend hours manually processing invoices or tracking payments, you are doing double work. This could be spent more productively when you have the right tool for the job. By automating time-consuming and tedious tasks, you free up a few hours of your own valuable time which you can spend on the needs of your staff.

4. Exploring new talent pools

When the water runs out in our well, what do we do? We find another one, we dig down deeper, or we create new sources of water. If cost and time are no issue, we would suggest creating new sources by taking part in school programs, and raising awareness so that younger generations get involved.

Unfortunately, for those that don’t have the time and resources, and who need skilled labor now, deciding to spend your time on creating new sources is unrealistic. 

For those businesses, we’ve put together a list of talent pools for you to explore. In addition to traditional resources such as Job Bank, Monster, Workopolis, and Indeed, the following sites may be helpful:
Canada

US:

Reasons for labor shortage in construction

5. Adding a trainee or apprenticeship program

Apprentices start as entry-level employees who work full-time and receive training along with certain benefits. Once you register and meet certain requirements, you can promote your program through social media, professional networks, and online listings – all adding visibility to your business and its labor skills needs. While there are many regulations to keep in mind, there may be time-saving advantages if you’re an individual employer – and sizable bonuses, too. 

6. Adjust your business plans

Are you still struggling to operate without an ideal number of workers? Some of the methods businesses use to cope with the lack of skilled labor include:

  • Taking fewer projects
  • Finding a niche / Specializing in smaller projects
  • Narrowing the geographic area where you take jobs

While there’s no single recipe for running a construction business short-staffed, you can adapt to the constraints by being specialized and agile. You may find your way to success by limiting the projects you take on while adopting new, efficiency-boosting practices.

7. Explore internal recruiting

No matter how many people are in your teams right now, you can always identify the right people inside your own company and offer them the right development opportunities. Start by indexing key skills of your current employees, identify those that are ready to take on the next challenge or alternative career path, and give them the proper training to be successful. This will help you future-proof your workforce and ensure the succession of key workers as they retire or move on to new roles.

How Jonas Construction Software Can Help You Conquer the Labour Shortage

If a low workforce results in your projects and services running behind schedule and over budget, it becomes challenging to compete with other companies. Especially if they are using software to help them get timely cost reports which can help them mitigate risk, and maximize profits in other areas of the business.

Retaining employees in construction is never easy when there are more positions than people who can fill them. Skilled workers, especially those with difficult-to-find skills can quickly find another company, possibly your competitor if you are not providing an efficient, productive work environment. With streamlined resource management and scheduling tools in Jonas Construction Management software, you can create an environment where it feels great to work in.