How Technology Can Help the Construction Industry Overcome Staffing Challenges

As the cost of the building rises due to a lack of increase in productivity, labor shortages, and rising material prices, construction contractors are turning to HR technology and outsourcing solutions to automate tedious administrative processes and offer attractive benefits to retain top talent, writes Nicolas De Bonis, co-founder, and CEO at Workyard.

An essential component of the US economy, the construction industry makes up around 4.1% of US GDP. As the cost of the building rises due to a lack of increase in productivity, labor shortages, and rising material prices, it’s critical to make progress towards making the construction industry more efficient and cost-effective, and California is not immune to this problem. 

Focusing in on the labor shortage problem, 80% of residential contractors and over 50% of commercial contractors reported difficulty filling craft worker positions in 2018, according to two separate surveysOpens a new window . With unemployment at a 50-year low, contractors are facing the most difficult hiring conditions in more than a generation.

In the HVAC industry specifically, the shortage is particularly acute. Mechanic and installer jobs nationwide are expected to grow 15 percent from 2016 to 2026, according to the U.S. Bureau of Labor Statistics. But for more than a decade, the lack of qualified technicians has been a growing problem in the US. Statistics show that 25% of the construction workforce will be of retirement age by 2020, a level of growth that’s much faster than the average for all occupations.

There is clearly a decreasing supply of new talent entering the construction industry. As construction work has increased, the construction labor market has actually been in decline over the past 40 years — and so has productivity. This is a complex problem, and it’s clear that more needs to be done to attract young people into the industry. 

Solutions to this will include creating more awareness and promoting construction careers in our schools, supporting apprenticeship programs, and getting the message out where young people spend a large amount of their time: social media. 

Learn more: Ramp up Your Recruitment With Intelligent Job DescriptionsOpens a new window

Solving complex hiring challenges

Growing the talent pool is going to take some time. To fill their open roles today, construction companies are increasingly leveraging technology and HR services firms to improve their recruiting practices and operationalize their efforts in an increasingly competitive hiring environment. In order to grow their workforces, and in turn grow their businesses, companies need to be on the ball with recruiting and employee relations – starting with offering attractive wages, insurance, and benefits.

The rise of social networks & staffing platforms is enabling companies to gain a competitive recruiting advantage by reaching a larger pool of candidates faster. This is also creating more opportunities for workers to find the career placements that best suit them, which is particularly important in construction, where companies need the flexibility to be able to quickly grow and shrink their teams depending on their project demands. However, workers want stable employment, pay, and benefits.

Assessing craft worker skills and capabilities is also challenging and time-consuming. Many construction companies typically have to assess dozens of candidates to make a successful placement. The ability for computers to make a hiring decision on their own is a long way away, but electronic resumes and matching is enabling us to automatically pre-filter the top candidates, and spend more time interviewing the best people. 

Finding people is only one part of the challenge. In a tight market, retaining top talent is also of critical importance. Small business owners spend around 40% of their working hoursOpens a new window  on tasks that do not generate income, such as HR and payroll. Most contractors are overworked and simply don’t have the resources necessary to effectively attract and retain talent in such a competitive labor market.

The potential of HR tech 

Contractors can’t do all of this alone. That’s why more and more business owners are turning to HR technology and outsourcing solutions to automate tedious administrative processes, stay compliant with complex labor laws and offer attractive benefits to retain top talent. 

According to a recent Capterra surveyOpens a new window , 79% of construction small-to-midsize businesses will be using HR technology by 2020, and opined that “SMBs that continue to rely on manual methods in the face of increasing benefits from HR technology are setting themselves up to fail.”

The following processes that used to be tedious and error-prone are now being automated and simplified by technology:

1. Worker onboarding & background checks – Software apps can help collect relevant information from new hires in a timely and secure manner.
2. Time tracking – Workers can easily clock in and out with a tap in a simple app on their phone. Supervisors can monitor and approve hours while on-the-go.
3. Overtime Compliance – Software is coded to automatically calculate the appropriate overtime rates.
4. Location tracking – GPS technology helps companies understand where their crew is located when they’re on the clock.
5. Payroll processing – Again, the software can fully handle payroll by intaking hours from the time tracking app and then sending the appropriate wages to each worker. 
6. Pay as you go insurance – Since workers are tracking their time in a mobile app, you only have to pay for the exact hours they worked.
7. Job costing – Using GPS technology available on today’s mobile phones, it’s possible to automatically create job cost allocation reports by marking project locations.

The construction industry is facing its toughest test yet with the labor shortage crisis. But armed with the right tools, it will be able to solve its hiring problems and continue growing with the overall economy.

Learn more: Surefire Ways to Build Employer Brand through Social MediaOpens a new window