Severe labor shortages amid a nearly fully employed national economy have plagued construction companies across the sector in recent years, limiting the level of construction investment and volume of new projects. According to the latest Job Openings and Labor Turnover Survey, the level of job openings within the construction sector reached a record-breaking monthly average of 276,000 positions open in 2018, the highest level since tracking began in 2007.
The construction industry must rethink strategies to attract and retain well-trained and experienced workers. Smith Schafer has been a part of the construction industry since 1971. Here are a few ideas to navigate the construction industry labor shortage.
- Encourage youth to return to the industry. Some construction companies are establishing trade schools or college internship and apprenticeship programs. These can serve to create a new perception of the construction industry, one that includes a long-term career with management opportunities.
- Expand efforts to recruit from outside of the traditional candidate. Many construction companies have increased their outreach to military veterans. Not only are veterans dedicated and disciplined, but they can work under pressure and are often committed to seeing projects through to success. Veterans often have difficulty finding and keeping employment, so construction companies interested in hiring veterans should offer training programs that make it easier for them to secure work and establish careers.
- Increase compensation. A seemingly easy solution, but not always practical, especially with small profit margins. Compensation does matter, and it is important for construction companies to review their compensation plan periodically to ensure it has kept place with the marketplace and competition.
- Track safety performance closely. This should be checked regularly to ensure all staff are following defined rules and regulations. A company who takes care of their employees is more likely to retain them.
- Conduct ongoing training and development. Initiatives such as mentorship programs, career coaching and educational seminars may help employees widen their knowledge base and feel like a valuable member of the team.
- Review performance management. Many construction companies conduct annual performance reviews for in-office staff, but may do so less frequently for field workers. Consider a company-wide performance management program that includes regular reviews and goal-setting for everyone.
- Choose projects carefully. Labor shortages present an opportunity for construction companies to be selective about the projects they accept. Construction companies have the power to invest their resources in the highest-paying projects. A thinner bidders’ market lets them come in with higher bids.
- Use technology. Smart technologies may reduce costs and speed up project schedules. Investing in the right technology can free up time for the experienced workers, allowing them to focus on other vital tasks.
There is not a simple solution to overcome the labor shortage in the construction industry and each company needs to take an individualized approach that makes sense for their size, market and specialty. Our Construction & Real Estate Group, comprised of numerous professionals, is committed to serving over 800 Minnesota construction and real estate entities. Contact us today to learn business strategies that will help you grow and save you money.