Are you feeling the vacuum effect of labor shortage in the construction industry? You aren’t imagining it, and you’re not alone. This year, 93% of construction firms report they have open positions they’re trying to fill, and 91% of those firms are struggling to fill them, according to the Associated General Contractors of America (AGC).
It’s more widespread than the year before. Firms are having trouble filling nearly all craft positions, with 70% reporting difficulty. Pipelayers, concrete workers and mechanics top the list of most difficult-to-find trades. Finding people—and finding the right people—continues to be a top struggle for construction companies.
Meanwhile, the market shows no signs of stopping. In fact, it’s speeding up.
In August, the U.S. Bureau of Labor and Statistics reported:
With no fix in sight, construction companies need to embrace technology solutions to bridge the gap—or risk losing business.
What’s causing the labor shortage?
The labor shortage in the construction industry isn’t new, but it has gotten worse in recent years. There are a few large factors.
An aging workforce
The construction industry, like many labor industries, is facing an aging workforce. The median age is 42.3, and the average retirement age is 61. With more than one in five construction workers older than 55, there aren’t enough new workers to replace those who retire or leave the industry early for less physical work.
Physical and safety concerns weigh heavily on the minds of construction workers, especially as they near retirement age. But that’s not the only thing encouraging them to look for greener pastures. The rise of the gig economy, particularly during the pandemic when many construction sites were shut down, provided more flexible opportunities. Remote working, flex schedules and less hard labor has attracted many construction employees away from the industry—and kept many potential new workers from entering it at all.
A lack of skilled workers
While candidates are still applying for jobs in the construction industry, firms are seeing a significant skills gap. In an AGC survey, 77% of firms say available candidates lack the skills needed to work in construction. This is due, in part, to the aging workforce. As skilled workers retire or switch to jobs that take a less physical toll, new unskilled workers step in to take their place. But industry knowledge is only part of the problem. Overcomplicated technology also presents a barrier for many applicants, with 87% of firms agreeing that employees need strong digital technology skills to be successful in their roles.
More construction projects across the board
Despite the overall economic slowdown, recent legislation has allocated significant funds to infrastructure projects across the US. The Bipartisan Infrastructure Law was signed in November 2021. It’s the largest long-term infrastructure investment in our history, with $550 billion promised over the next four years.
McKinsey predicts this bill alone could create 3.2 million new jobs, a big ask for the industry that’s already struggling to recruit. Plus, the more recent Inflation Reduction Act includes nearly $400 billion to fund clean energy projects, which will also require heavy infrastructure support.
“This is really going to be a massive wave of infrastructure projects that will happen over the next five to ten years.” — Marcel Broekmaat, Chief Product Officer at Assignar.
How does this affect your construction firm?
While the impact is hitting the entire construction industry hard, there are three key areas that have become a high priority for general managers: filling specialized roles, avoiding project delays, and contractor retention.
One of the biggest struggles? Putting the puzzle together when you’re missing a few pieces. Marcel Broekmaat, CPO at Assignar, noted that when working on projects that require special certifications, such as in high traffic downtown areas or with larger equipment like cranes, it can be hard to recruit the right contractors when they are in such high demand.
“Predicting and planning for when you’ll need specific skills or certifications is a challenge,” he said.
Having the people with the right skills available right when you need them is difficult when your trades are stretched thin.
Even projects with longer lead times face similar issues. When you don’t have complete visibility into what roles and skills you need, you can’t plan ahead by hiring or training your employees. You won’t know you’re missing a skill until the project is right on top of you. Maybe you have certified excavators ready to go, but you didn’t know they were missing the certification to operate on your downtown project; or your one Caterpillar operator is stuck on another job that’s run over, and now your entire project is on hold until they’re done. This quickly leads to project delays—another labor shortage issue.
Labor shortages lead to scheduling problems, which means your project timelines will take a hit. According to AGC, 66% of firms reported project delays in the last year as a direct result of the current labor shortage.
Since workers are in high demand, it’s no surprise that wages are going up and retention is going down. Between December 2019 and December 2021, wages grew 7.9%, reported Bisnow. It’s tempting to jump ship in favor of higher rates, better benefits, or more flexibility.
How tech helps bridge the labor gap
Since it’s clear that the labor shortage has no immediate solution, the construction industry has to look for other ways to meet demands. New problems need new technologies to help you solve them.
We’re not talking about technology no one asked for that just adds to your team’s workload. We’re talking about software that fits your process and doesn’t try to change it; operational software makes your life easier and allows you to build more.
Here’s how technology helps you fill the labor gap.
Match subcontractors and specialized roles in advance
Do you plan your projects on massive whiteboards or leave your scheduler to do it all in their head? An operations platform like Assignar does the heavy lifting. Using project templates, you can add the project’s start and end dates and the type of job, and the software will do the rest. You’ll see which trade skills and certifications you’ll need (along with equipment) and when.
The software will even recommend workers based on the skills you need to complete the job. This helps you forecast what your workforce needs to look like to complete jobs a few months in advance. You can figure out who needs to be available on your team, who you need to hire, or who you need to upskill to be ready for the upcoming job. By the time you kick off the project, you’ll have your team assembled and ready.
Plus, this will help you put the pieces of the puzzle together and will make scheduling easier overall. You can delegate scheduling to other back-office workers since all this information is kept available in the application (and not in your scheduler’s brain).
Increase labor retention
When you have more job lead time, it’s easier to see which skills and certifications you’re missing and do something about it. Giving your workers opportunities to upskill is a great way to increase retention while adding value to your team.
This is actually a popular way to compete in the tight labor market. According to AGC, 51% of firms report they’ve engaged with career-building programs. Assignar can identify which certifications and skills are missing for an upcoming project and connect you with resources to get workers up to speed.
Workers, in turn, appreciate learning the latest equipment and improving their skills to increase their own value. This creates a sense of connection to your firm, and leads to higher retention rates. Recent data shows that 54% of immediate retention is directly linked to an employee or contractors belief that the company contributes to their development.
Eliminate menial tasks and save time
Stop chasing paper. From scheduling to timesheets, many construction firms work primarily on paper. It may be easier to handle on a job site than a tablet or laptop, but dropping papers off at the back office, manually entering them in an excel spreadsheet, and searching for lost documents wastes valuable time—especially during a labor shortage where everyone’s time is particularly valuable. Not to mention the back-and-forth conversations (and miscommunications) that happen when trying to schedule a job and give everyone the proper information.
Once you designate your team in Assignar, they automatically receive a text message with a link to all the project details. They’ll see the time and location of the project and images with points of interest (boundaries, job-site trailer, etc.). Subcontractors can accept the request, letting you know they’re ready to go.
Assignar also gives your team a place to enter information directly from their smartphones, like timesheets, pictures, supervisor sign-offs, etc., and makes it easily accessible for your team in the back office. No need to hand-deliver papers, re-enter timesheets, or send 20+ back-and-forth emails.
There’s no waiting out the labor shortage
As tempting as it is to manage the coming years by doubling down on your hiring efforts, it won’t be enough to get you through.The labor shortage in the construction industry is a long-term problem—and Assignar is your quick win. Assignar fits your operations and doesn’t ask you to fit ours. You won’t have to change your processes or require new roles; instead, put Assignar in the hands of your existing people, using technology they already use, and you can make what you’re already doing faster and easier. During times like these, new tools are worth a shot.
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