6 Strategies To Address a Construction Labor Shortage

More hands make light work — and that can leave the construction industry in a troubling situation. Ideally, project timelines would get extended to accommodate fewer workers, but companies are continually dealing with more aggressive and competitive schedules.

That leaves a lot of companies in a tight spot, sometimes pushing existing personnel to their limit to meet delivery deadlines. Overworked staff is more likely to complete work that has quality and safety concerns.  

In fact, labor shortages are one of the biggest risks facing construction companies today. Fortunately, those trying to figure out how to deal with labor shortage issues are in the right place. This guide outlines six strategies to address a labor shortage on construction jobs.

The State of the Construction Industry Labor Shortage

The share of construction workers under the age of 35 has been decreasing for decades. The National Center for Construction Education & Research (NCCER) reports that the average age of construction professionals was just shy of 37 in 1994. In 2020, that average age was nearly 43, and if trends continue, it will top 46 by 2030. In other words, fewer young people are opting to pursue careers in construction. 

As companies calculate their labor costs, they find that it’s more expensive to do the work in the same duration with fewer people. A labor shortage could mean paying the few workers they have more overtime, or paying to try to rapidly train new hires to get enough hands on the job, for example. 

It’s no surprise, then, that companies are trying to figure out how to deal with labor shortage problems while still submitting competitive bid numbers. Since labor expenses often account for half of the project’s total costs — if not more — this is an issue companies can’t ignore. 

Strategies to Address a Labor Shortage

Companies can explore a variety of different options to help figure out how to deal with labor shortage problems. Here are six that may make a difference.

1. Focus on retention and upskilling.

First up, construction companies need to prioritize keeping the laborers they do have. In a world where fewer new hires are available, employee retention is paramount. 

To keep employees happy — and to consequently keep them with the company longer — employers should do the following.

• Establish expectations early.

  Encourage managers to take time with each of their team members to understand their wants and needs. Do they prefer to stay on local projects, for example, or are they excited about the idea of moving around to different cities? Do they primarily want to be in the field or office? Do they like their current work, or are they motivated to grow into a new area?
  
  Understanding employees’ expectations and taking steps to align with them helps to build a firm foundation for the employer-employee relationship. 

• Offer competitive compensation.

  This doesn’t just mean paying (or, ideally, beating) the prevailing wage. It means understanding employees’ priorities and offering compensation in that area, whether that’s medical coverage, vacation time, stock options, or something else. 

• Continuously improve the workforce.

  It’s generally easiest to hire for entry-level positions. As a result, construction companies benefit from developing their existing workforce so they can grow into more skilled roles. In addition to providing training to develop new skillsets, train team members to use new tools to help them work more efficiently.
  
  This accomplishes two goals: First, it makes the workday easier for staff, helping to prevent burnout and improve retention. Secondly, tools that boost efficiency (e.g., automation) help people get more done in less time, helping to alleviate the companywide strain from being short-staffed. 

2. Leverage technology.

Automation and the streamlining of tasks in tech tools can help to lighten the load for individual employees. If one project management software can feed data to all of its necessary locations, for example, people don’t need to spend time each day manually updating multiple files. Instead of hand-writing reports, staff may be able to carry a tablet on the jobsite and snap pictures throughout the day. Using technology in ways like these helps to shorten workdays, boosting employee satisfaction and retention. 

Construction technology can help companies make the most of their labor pool in additional ways. With a BIM model, for example, teams can scan for conflicts and discrepancies in the virtual environment. This means they can catch problems earlier — before teams are deployed on the jobsite. As a result, once teams are in the field doing the work, they should come up against fewer issues that could cause delays. 

Technology can also make it easier to provide staff with additional training to help with their career growth — and the skills they can offer to the company. With virtual on-demand training, for example, employees can dedicate an hour here or there toward making progress, even when they’re in the field. This is much less burdensome than needing to carve out a big chunk of time to go sit in a classroom. 

In short, technology can make life easier and more flexible for construction professionals. This helps companies retain the staff they do have while making open roles look more appealing, particularly to young workers who are used to leveraging technology in their daily lives. As a result, deploying tech tools is one of the most effective strategies to address a labor shortage at any construction company. 

3. Explore alternative labor pools.

Companies figuring out how to deal with labor shortage problems internally may need to look outward. Tapping into flexible labor crews can be an asset, particularly when applied strategically. 

Companies may opt to contract with a clean-up crew, for example. Hiring that third-party labor pool as needed on the project provides the necessary support without overtaxing employees. 

Looking to alternative labor pools may extend beyond one-off needs, too. When the local labor pool is insufficient or has a track record of underperforming, companies may benefit from covering the cost of travel to bring in the skilled laborers they need. Crunch the numbers here to determine if the added cost is offset by potential gains. 

4. Refine scheduling practices.

Applying some creative thinking to scheduling is one of the most effective strategies to address a labor shortage. On a project with a tight timeline, for example, the company may want to deploy two crews working on alternating days. This way, the project can consistently move forward without burning out (or paying excessive overtime to) any individual team members. 

Companies generally try to create schedules in advance, but this gets particularly important once labor shortage issues come into play. The earlier the schedule gets created, the more time the company has to find creative ways to problem-solve any staffing shortages.  

5. Optimize allocated workforce.

Simply assigning the required number of people to a job may not be the most efficient way to staff it. Companies need to understand their personnel and how they work together. Generally, they should assign the highest-performing crews to the jobs with the highest demands. 

Additionally, project managers should monitor how the staff on-site gel with other players. If a specialty contractor’s team is butting heads with the general contractor, for example, it may make sense to make a personnel replacement. 

6. Explore Untapped Labor Potential

One of the simplest strategies to address a labor shortage on the jobsite may also be one of the simplest: seek to hire more women. Per a recent construction labor market report from the Home Builders Institute, women only make up a little more than 10% of the construction workforce. 

Many companies have already started to look for ways to tap into the relatively unexplored labor pool that is women in construction. To encourage more women into the industry and to keep them there, organizations often create internal groups of female staffers or connect to external ones, like the National Association of Women in Construction (NAWIC). 

A Note on Company Culture

Company culture plays an outsize role in an organization’s ability to attract and retain talent. As a result, any company trying to figure out how to deal with labor shortage issues should prioritize its culture. That means looking for ways to boost employee morale. 

Firms unsure where to start here have a relatively simple tool they can deploy: surveys. Asking employees what they want, what’s important to them, and where they feel changes need to be made goes a long way. 

The trick, then, is acting on the received feedback. Usually, this is easier to do on a personal level. The company should set the culture and drive it down to leaders, who drive it down to project teams. On that level, project managers can take steps to deliver on their project team’s wants and needs. Maybe they need a team happy hour to unwind, for example, or maybe they’ve been begging for a new technological tool to make their life easier. 

In short, encouraging managers to solicit feedback from their teams, then empowering them to act on that feedback, helps to build a strong company culture. And that culture lays the foundation for implementing effective strategies to address a labor shortage. 

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Looking Ahead at Labor

Construction companies are being forced to pay more and to grow employees into higher roles faster. That combination of better wages and more career opportunities will likely attract new talent, which should help to ease the shortage. 

That said, construction companies risk losing something in the interim. As seasoned construction professionals retire, they may take their institutional knowledge with them. That potential problem presents an opportunity for companies, though. Pairing new hires with experienced staff gives the greener talent the opportunity to learn and grow while preserving the legacy knowledge within the company. 

In short, then, companies don’t just need to figure out how to deal with labor shortage problems. While pressing, those issues are also likely relatively fleeting. Their biggest priority should be creating a team of knowledgeable construction professionals who are satisfied enough to stay with the company long-term.

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