What to do about the construction labor shortage

What to do about the construction labor shortage

The shortage of skilled workers in construction is a persistent problem that has impacted projects all across the globe. It was especially prominent during the COVID-19 pandemic, and even as economies recovered, the issue remained constant.

Let’s go over what you need to know about the construction labor shortage, as well as what businesses can do to make the most out of their existing human capital.

What is the construction labor shortage and why is it problematic?

In the construction industry, the labor shortage refers to the lack of workers available to complete projects on time. Labor economics and experts have pointed to record industry lows, and if left unaddressed, this problem is expected to only worsen over time.

This will not only affect industry growth (impacting a construction business in the long-term) but for project managers and other construction professionals already working in the field, this poses a serious threat to their everyday workflows and mental health. Fewer hands on deck means existing workers are stretched thin, increasing the risk of burnout—which, in turn, impacts productivity levels.

The overwhelming demand for housing across various states and provinces shows no signs of waning, and with the housing market heating up, keeping up with demand will necessitate attracting more skilled labor.

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Current state of the construction labor shortage

The shortage of skilled labor has been characterized by two factors: the demand for labor and the amount of opportunities available for prospective professionals. Let’s get into what you need to know.

Demand for skilled construction labor

The aging workforce approaching retirement has exacerbated demand, as older workers are retiring with no younger employees to take their place. Despite more money being offered to lure in fresh blood, the industry will have to work hard to fill in the gaps left behind.

Add to that competition from other industries. For young people, a job in construction can seem less than glamorous due to preconceived notions of what it means to work in the field. Companies will need to change perceptions around the industry to make it a more attractive option, especially as demand persists.

Construction career opportunities

The industry also took a hit from The Great Resignation, which saw workers resigning en masse as they opted for unemployment. The result was high turnover and an increase in job openings.

Those who are interested in the field will find that there are many available career opportunities. Often, when those who aren’t familiar with the industry think of ‘construction’, they picture laborers working on the field or general contractors. While these roles are integral to project completion, there are also many other potential pathways that open up with more experience.

For instance, drone pilots navigate unmanned aerial vehicles (UAVs) to gather site data and help improve project efficiency. Another example is AI analysts, who use artificial intelligence to help automate core processes.

The options are endless—it’s merely a matter of looking in the right place.
To learn more, check out our article on the highest-paid construction jobs.

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Construction labor shortage statistics

Statistics show that 25% of construction workers are over 55 years old (that’s 1 in 4 workers), with 40% of the industry’s workers being laborers. Losing such a substantial amount of labor due to retirement will prove to be a challenging obstacle that the industry will have to face in the coming years.

In fact, experts estimate that the industry will need to bring in over 342,000 workers in addition to normal hiring numbers to sufficiently meet demand. This monumental number points to just how dire this problem currently is.

Adding onto the issue is the difficulty that firms are experiencing attracting labor, with 89% of construction companies facing challenges in hiring. Making job openings more alluring with high pay and comprehensive benefits will be important. It’s crucial for companies to also provide proper training and support to retain workers and reduce turnover.

Construction labor shortage causes

Next, let’s discuss why the labor shortage in the construction industry has persisted over the past decade in both good economic times and bad ones.

Older construction workers are retiring in large numbers

As previously mentioned, the construction industry employs large numbers of Baby Boomers. As people in this abnormally large age group retire, there simply aren’t enough younger professionals to replace them.

“By 2029, we will be short about 100,000 tradespeople if we don’t do anything,” said Kieran Haw, COO of EllisDon Corporation, speaking with the Globe and Mail about the state of construction’s labor shortage.

The industry is struggling to recapture laid-off professionals

According to U.S. Bureau of Labor statistics cited by the aforementioned JOLTS study, 60% of construction professionals laid off during the Great Recession subsequently left the industry entirely. Many of these workers were not replaced, and the issue has continued to go unaddressed to this day.

Why the construction labor shortage needs to be addressed

The labor shortage in the construction industry has brought on many negative effects. Let’s discuss a few.

Many construction projects are understaffed

Due to the ongoing labor shortage, many construction projects are understaffed. This has additional consequences, including:

  • projects taking much longer to complete than they otherwise would, increasing the level of disruption to the public
  • projects costing much more than they otherwise would
  • workers becoming stressed and burned out; as much as they may enjoy the opportunity to work overtime, there are limits on how long most people can work

Many essential construction projects are canceled

The shortage of skilled workers in construction means many projects simply can’t proceed. Further consequences of this include communities being left without vital infrastructure.

Some companies are forced to hire less-skilled workers

In an effort to keep up with demand, some construction companies are hiring less-skilled workers wherever possible. These are workers who wouldn’t qualify for their jobs if enough skilled laborers were present.

The impact of this is far-reaching. Workers who lack the ideal skill set often produce subpar work and are more likely to be injured on job sites.

Professionals in non-manual labor positions are affected, too

Construction shortage issues don’t just affect those on the front lines. It can also push other professionals out of the industry.

For example, construction HR professionals may feel maintaining a workforce in that industry is much harder than it would be elsewhere. Consequently, they may eventually take their talents elsewhere.

Construction workers take on a higher workload

Fewer workers means more work is loaded onto existing employees to make up for the gap in hands, with one person taking on the work of two or three people. This causes employees to become overburdened, increasing the likelihood of burnout. 

Construction companies face increased labor costs and risk

Workers who have to do the job of multiple people are more likely to ask for higher compensation (in addition to overtime pay). While companies may be tempted to simply pay more instead of doubling that with another salary, it’s important to note that with burnout comes a greater risk of making mistakes. Oftentimes, these mistakes can be costly.

What companies can do about the construction worker shortage

Now that we’ve extensively discussed the construction worker shortage’s causes and effects, let’s look at how professionals in the industry can combat it.

Use workforce scheduling software

Many workforce scheduling challenges brought on by the labor shortage can be mitigated with purpose-built software applications like Bridgit Bench. Construction management professionals can identify and implement optimal allocations that account for the limited nature of workers.

Bridgit Bench also helps construction companies forecast their workforce demands so they can strike the right balance between keeping workers busy and taking on too much work.

Focus on attracting workers in under-utilized demographics

According to Data USA, America’s construction workforce not only skews older but is also concentrated among three racial demographics:

  • White (non-Hispanic), comprising 54% of the workforce
  • White (Hispanic), comprising 46% of the workforce

These racial demographics account for a substantial amount of the construction workforce, which leaves just a small split among members of other races despite their share of the population amounting to much more.

Women are also a historically untapped demographic in the construction industry, with 96.1% of construction workers being male. 

Addressing the construction labor shortage will inevitably involve tapping into demographics that have historically been excluded (for a variety of reasons) from the industry.

Retain existing workers

Given how difficult it is to find workers in the first place, construction professionals would be wise to take employee retention seriously. This is a crucial part of construction workforce planning.

Workers need to feel they’re being fairly compensated, that their safety is considered, and that there are opportunities for professional advancement. Otherwise, they’ll find those things elsewhere, which will leave you scrambling to fill yet another position.

Encourage innovation

When workers work smarter rather than harder, they can get more done in less time. Forward-thinking construction companies understand this and foster an environment in which innovation is rewarded with more pay and additional opportunities.

Invest in equipment to get more done

A good equipment management strategy helps construction companies identify tools worth investing in. These tools can, in turn, reduce the number of workers needed to complete projects.

While the cost of new equipment may make this strategy seem impractical, companies need to account for the cost of not having resources (whether they be equipment or personnel) to fill those needs. Running these numbers may make the case for new equipment stronger.

Hire foreign workers

As mentioned earlier, there aren’t enough younger workers in America interested in construction to replace older workers as they retire. Skilled foreign workers are often willing to fill these positions if employers are willing to sponsor them and provide fair wages.

Need help managing labor? Choose Bridgit Bench

We hope this article has helped you understand the construction labor shortage, along with its causes, impacts, and potential solutions.

If you’re looking for a better way to oversee construction personnel, consider Bridgit Bench. You can grow and retain your top talent and make more informed decisions to put forward a winning team.
Request a demo with Bridgit today.

We hope this article has helped you understand the construction labor shortage along with its causes, impacts, and potential solutions. For more workforce management guides, visit our blog.

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Michel Richer

Michel Richer is the Manager of Content and Product Marketing at Bridgit. He started in the construction industry early on with a local restoration company. Michel is driven to propel the construction industry forward by helping to eliminate outdated, ineffective processes.

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