Industry Leader of Construction and Real Estate, Nancy Cox, shares strategies to mitigate the risk of business disruption caused by skilled labor shortage and retention

The construction and real estate industries rely heavily on skilled laborers to complete projects in an efficient and effective manner. However, like many sectors that require skilled workers, a lack of qualified talent has led to significant disruptions and project delays. For home builders, this could mean anything from missed completion deadlines to unhappy customers, to loss of overall revenue.  

According to the Fall 2023 Home Builders Institute (HBI) Construction Labor Market Report, there will be a need for an additional 2.17 million new skilled workers in the construction industry between 2024 and 2026 to keep up with demand across the industry. This equates to a need to hire at least 60,000 skilled laborers per month. 

The issue is not new and is likely not going away any time soon. According to The Bonadio Group’s Biennial State of the Industry Survey, attracting and retaining qualified personnel has maintained the top spot as the most critical issue within the industry since 2014. Due to the magnitude of this issue, construction businesses are prioritizing culture to attract new talent as well as retain their existing workforce. From creating new training opportunities to finding ways to reduce overall workload for their staff, construction business leaders must get creative to remain competitive in a very difficult marketplace.  

Below are four key considerations construction leaders should keep in mind as they plan to help offset the impacts of the labor shortage. 

Invest in internal training programs 

With new, qualified talent proving difficult to find, internal training is a great way to combat the skilled laborer shortage while promoting professional development among your existing workforce. Better yet, company sponsored internal training programs can also attract new talent by demonstrating advancement potential and a dedication to investing in the success of your workforce. Not only will it allow employees to develop their professional skills, but it will also instill a sense of appreciation for the additional opportunities provided for them. To start, assess your available resources to determine what’s feasible in terms of building an effective training program. If possible, prioritizing this strategy to strengthen your recruiting and retention approach can make a huge, positive difference in building back your workforce. 

Improve and maintain company culture  

In times of labor shortages, it’s common for workers to feel the strain of their company’s understaffing woes. However, it is critical that leaders do not sacrifice culture during these already challenging times to avoid negative impacts to retention. A strong culture ensures continued satisfaction in your existing workforce and attracts skilled talent from competitors that are seeking a more positive working environment. 

For these reasons, strong employee engagement and the maintenance of a positive, meaningful environment should be top of mind for leaders across the construction industry. Otherwise, businesses are more at risk than ever before of seeing their employees disengage and look elsewhere for work. Tactics like annual salary and benefit review and adjustments, regular employee ‘stay’ interviews to determine staff satisfaction and values, and community engagement opportunities are just some of the effective ways that leaders can ensure a positive work experience for their staff. 

When a strong company culture is created and maintained, employees can even become your most important recruiters, actively recruiting their friends within the industry to come work for the company. 

Utilize technology and automation 

Can’t find enough qualified human talent to get the job done? As the technological revolution persists, new construction technology and automation have emerged as effective tools to offset some of the workload that formerly required skilled workers. While it’s impossible to replace the work of laborers completely, tools like artificial intelligence have been utilized to successfully perform administrative tasks, while advanced tools and automation have become assets on job sites to keep projects on schedule despite a lack of workers. 

For efficiency and to mitigate the impacts of the labor shortage, construction leaders should look to technology to unlock potential efficiencies at job sites and for administrative needs wherever possible.   

Reduce workload 

In addition to offloading tasks to technology, leaders should seek further ways to reduce stress and strain on skilled laborers during periods of understaffing. Burnout is a major risk to retention, and mitigating stress felt by top performers is key to maintaining your workforce.  

To accomplish this, companies should focus on simplifying work wherever possible. This includes implementing design thinking and improving the work environment to help laborers focus and relieve stress at the job. The focus should be on finding solutions for tasks that emphasize efficiency, rather than expecting a reduced workforce to perform the job requirements of a fully staffed project. 

While there may be no end in sight to the labor shortage issue which continues to pose challenges to construction businesses, utilizing proven effective strategies to maintain a strong culture can ensure your business remains a top choice for skilled workers in an increasingly competitive industry.  

 Nancy Cox
www.bonadio.com
Nancy Cox, Industry Leader of Construction & Real Estate at Top 50 CPA Firm, The Bonadio Group, is responsible for business development, client/project acquisition, geographic expansion activities and determining how and where each of their industry clients is best serviced within the Construction & Real Estate Industry. She is responsible for firm revenue and working collaboratively to optimize profitability as it relates to clients served in the construction and real estate industry. She specializes in financial statement auditing and consulting related to the real estate and construction industry and employee benefit plan audits, serving on the Bonadio Firm Wide Employee Benefit Plan Audit Efficiency Team, Bonadio Board of Directors, Bonadio 401k Plan Committee and the Bonadio Audit Committee.