How To Solve Labor Shortage Problems In Construction

In this blog, we’ll uncover the truth behind the labor shortage crisis in the construction industry and explore actionable solutions. What can we do as an industry? What can you do as a company? Plus, I’ll point you to a valuable resource to help you tackle this issue head-on.

The Current Labor Shortage Problem in Construction

First, let’s address the problem: We currently lack over 500,000 workers in the construction industry, just to meet current demand. For every one person entering the industry, five are leaving, especially in regions of North America. In the next five years, 20% of the workforce is expected to retire. Post-COVID-19, millions of people in the U.S. are not actively working or seeking jobs. This is a number we’ve never encountered before. Compounding this, training is scarce, leaving new entrants underprepared, and the industry as a whole frustrated.

How We Can Control the Situation

The situation may not be entirely our fault, but we are in control of it. Often, people blame the newer generation, labeling them as lazy or uninterested. While such views are common, they’re not accurate. If we resign to the idea that the current workforce is fundamentally flawed, we lose any power to improve the situation. However, by adopting a mindset of Extreme Ownership, we can begin to make real changes.

Major Causes of Labor Shortage in Construction

One of the major culprits is the faulty systems we rely on. We have outdated schedules that burn people out, leading to high turnover and the highest suicide rates compared to other industries. Additionally, construction sites still often lack basic amenities like proper bathrooms, handwashing stations, and decent lunch areas. These conditions deter workers, and those within the industry don’t encourage their children to follow in their footsteps. Moreover, there’s rampant disrespect toward workers, coupled with sexism and racism, which drives potential talent away.

Importance of Planning Projects Properly

One of the key steps to resolving this issue is better planning. Contracts that don’t incentivize planning lead to rushed projects, which, in turn, burden workers with overtime, fatigue, and unsafe conditions. We need to transition from outdated systems and adopt Lean Thinking and better contract methods like IPD (Integrated Project Delivery), Scrum, and Last Planner systems. These tools allow for better collaboration and more efficient project execution.

Respecting Workers is Key to Solving the Labor Shortage

Respecting workers should be a top priority. This includes providing clean facilities, organizing worker huddles to foster communication, and creating a safe, welcoming work environment where families would want their loved ones to work. Simple actions like providing lunch areas with microwaves and fridges go a long way toward retaining workers.

Stop Overemphasizing College Degrees

We need to rethink the emphasis on college degrees as the only path to success. There are many talented individuals—police officers, military veterans, and high school graduates—who can fill these roles if we provide them with the right training.

Doing More Training and Opening the Doors to Outsourcing

We must provide more training for new workers—doubling or even tripling our efforts. Additionally, the labor shortage problem cannot be solved without opening the doors to skilled workers from other countries. The U.S. needs to embrace immigration and work visa programs, especially for talented individuals from neighboring countries like Canada and Mexico.

Practical Tips for Companies to Attract Workers

Now, let’s look at what your company can do:

1. Create a Great Culture: Build an environment where people want to work. Focus on a strong leadership team, efficient systems, and a positive company culture.
2. Find Good Hiring Sources: Build partnerships with trade schools, veteran organizations, and local high schools. Don’t be afraid to think outside the box.
3. Referrals Work: Encourage employees to refer family and friends. The best employees often come through personal referrals.
4. Treat Employees Well: Focus more on employee satisfaction than recruitment. A company that treats its people well will naturally attract more talent.
5. Train Continuously: Invest in ongoing training programs. Build people before you build things. Continuous improvement should be a core principle of your company.
6. Create Career Paths: Ensure every employee knows their growth potential within the company. When workers have a clear career trajectory, they’re more likely to stay.

By following these steps, you can significantly reduce your labor shortage problems and create a company culture that naturally attracts and retains talent.