Builders are at a crossroads. On the one hand, business is booming. While abundant work opportunities are great for contractors, the industry is also buckling under a growing and ongoing shortage of skilled labor.
Many experienced workers are retiring, and not enough new people are taking their place. Since it takes time to recruit, train, and retain quality employees, contractors must plan ahead to deal with the pitfalls that labor shortages present.
Jeff Yoders, associate technology and equipment editor at Engineering News-Record, spoke about the magnitude of the problem during a labor shortage and mitigating risk panel discussion at Procore’s Groundbreak 2022 conference.
“I have covered these surveys for five years now, and I’ve never seen one this bad,” Yoders said, referring to a recent survey by the Associated General Contractors of America. “With 91% of contractors having difficulty filling positions, this is a new high and, most would say, just an unsustainable number.”
In such a volatile environment, it’s critical that contractors improve their project-planning processes by identifying risks ahead of time. For example, negotiating with trade partners to include risk factors in contracts before commencing construction could prevent future litigation due to poor collaboration and unforeseen labor problems.
Tap Into Solutions That Are Proven to Work
Contrary to what one might think, the shortage of skilled workers in construction isn’t caused by a lack of people entering the field. According to Daniel Groves, CEO of Construction Industry Resources (CIR), a leading provider of skilled labor market intelligence for project planning and execution, a large number of people join the construction workforce every year — approximately 320,000 workers annually.
“The problem is only about 20% of them end up in the skilled trades,” Groves said during the panel discussion. “We have to do a better job of getting those workers to make the decision to choose our industry. What we’re not doing really well is retaining them.”
There’s no need to invent a solution to this problem from scratch; there’s already a model in place. It has proved successful in the past, and if widely adopted by the construction industry, it could potentially help again.
A Retention Model That Works
About three decades ago, the industry lost skilled trade workers due to understaffing issues and injuries. They decided enough was enough and developed a culture that transformed the workplace through leadership’s involvement. By working closely with skilled employees and providing safety training, safety incidents dropped to the point where they were almost non-existent.
This model of leadership remains relevant today. Worker shortages lead to more OSHA Recordable Incident Cases and threaten a company’s capacity to meet their primary project objectives. This transformational change is driven by the need to sustain the pace of the industry. Hands-on leadership involvement is good for business. If organization’s invest just 1% of their project labor budget in training, research shows that there is a significant improvement in productivity, turnover cost, injuries, absenteeism, and rework.
Using Data to Successfully Manage Risk
Besides creating a safer and more educational workplace for employees, another indispensable strategy to combat the labor shortage problem is to dive into analytics. Such tools, especially predictive analytics, are invaluable. They provide the right information to help teach contractors and owners how to identify issues before they arise. Alternatively, when something cannot be avoided, the data can be used to analyze the incident and implement the best procedures to manage that risk.
Panelist Christopher LeMieux, founding partner of Riess LeMieux, a construction law firm, warned how things can go south when contractors don’t take the time to draw up a workforce-related risk assessment upfront.
“The biggest catastrophic problems come when there’s no upfront analysis. It gets to a point where firms like mine become involved, and now the lawyers have it, which is the last thing that you want because we complicate everything, and we make everything more difficult, and everything takes longer,” said LeMieux. “All of that can be avoided with front-end planning and with contract negotiation.”
Get the Right Platform to Help Analyze Risk and Retain Workers
In the fast-paced construction world, it’s no longer feasible to perform risk assessments by using a manual system. A better and faster solution is to adopt a digital platform that provides the relevant analytics that are so crucial for proper risk management.
The right solution will provide real-time updates and data that not only streamline a project’s workflow but also mitigate a variety of risks as a means to safeguard a company’s future.