Construction Matters

Attracting and Retaining Workers in Today’s Labor Market

Employers across the country are struggling to attract and retain quality workers. This is certainly true with respect to the construction industry, which expects continued growth into 2023 and beyond. The purpose of this blog is to highlight new employment research, outline factors contributing to today’s worker shortage, and offer important tips to help employers attract and retain skilled workers.

Labor Market Factors

The first contributing factor to today’s employment challenges is anticipated industry growth. Of note, the recently signed $1.2 trillion Infrastructure Investment and Jobs Act will likely contribute to this growth as roads, bridges and other infrastructure will be updated countrywide. Companies need skilled workers to meet this booming demand.

One factor in today’s labor shortage is the high number of workers reaching retirement age. In fact, according to the National Center for Construction Education and Research, 41% of the current construction workforce will retire by 2031. Additionally, fewer young workers are joining or staying in this workforce, as there has been greater focus on educational pursuits beyond the trades in recent decades. This is compounded by the reality that a growing number of industry veteran workers have assumed management roles. In addition to finding employees, employers now need to address leadership gaps to keep their operations running smoothly and retain institutional knowledge. 

In addition, the pandemic caused many employees to reconsider their line of work and try different roles or industries entirely. This employment shift is especially difficult for construction companies and contractors, as the candidate pool for construction is significantly narrowed since they depend on workers who have acquired specialized skills.

New Research

In early 2022, employers were surveyed about various employee attraction and retention topics, and more than 150 employers of all sizes and industries responded. Notably, the construction industry had a high participation rate in Zywave’s 2022 Attraction and Retention Employer Pulse Survey. Consider the following key research findings from respondents in the construction industry:

• Over 90% of organizations have some difficulty attracting new employees.
• 58% of organizations at least somewhat have difficulty retaining current employees.
• 81% of employers consider employee attraction and retention a top-five business challenge and expect the trend to continue.

Employee attraction and retention come with general hurdles, but construction leaders say they are working most to combat these specific challenges:

• Increasing compensation to meet current demands
• Addressing current and future skills gaps
• Addressing increased benefits demands
• Meeting desires for flexible work arrangements (i.e., remote, hybrid, flexible hours)

While those components are what today’s construction workers are looking for, employers have their own wish lists for ideal candidates and employees. Experience, reliability and professionalism are the top desired traits of construction workers.

Knowledge and technical skills were top traits for roughly a quarter of respondents, suggesting that employers would instead hire for personal attributes and soft skills, potentially supporting new hires with technical training on the job.

Worker Attraction and Retention Tips

As workers retire, take other construction jobs, or leave the industry altogether, employers need to get creative with employee attraction and retention strategies. Consider these general guidelines:

Expand Recruitment Tactics—As the construction industry looks to recruit a new generation—specifically millennials and Generation Z—new recruitment tactics can be successful. In addition, construction employers can consider ways to grow their applicant pipeline by considering underrepresented groups in the industry. According to the BLS, women make up around 10% of workers in the construction industry, trailing most other key sectors. However, this creates an opportunity to increase talent pools in this expanding industry.

Of course, there’s no single approach, but employers could try using social media, attending job fairs or presenting at high schools, trade or technical schools and universities to target key and new talent markets. Recruitment tactics that worked in the past likely won’t be as impactful in today’s market.

Invest in Training Opportunities—Learning opportunities may be a way to recruit young employees and help them build a career in the construction industry. Here are a few examples of learning and development opportunities:

• Employee training can focus on specialized skills, new technology or safety-related topics. It’s essential to identify any skills gaps left by retirement. The rework rate is a major concern for construction projects, and proper training can help businesses avoid such costly circumstances.
• Hands-on training can be the most engaging since employees actively participate and may remember their experience better. As soon as new technology is available or used on a site, employers could allow all workers to interact with and practice using it. This will also help supervisors understand if there’s a learning gap with devices or software so they can pivot to correct mistakes before they happen on-site.
• Virtual training can help employees learn about health and safety regulations quickly and safely. On-demand virtual training allows employees to test their skills and knowledge and retake lessons as needed to become familiar and comfortable with critical safety rules and standards.
• Simulated training, including augmented reality (AR) and virtual reality (VR), can provide hands-on training without endangering workers. Employees can use VR to learn how to operate remote-controlled heavy equipment without damaging equipment and other materials or incur worker injuries. Additionally, employers could use AR to allow teams to learn how to repair equipment or other critical mechanical components.
• Mentoring plans can prepare newer employees for future leadership roles and support the transfer of institutional knowledge from seasoned employees.
• Leadership development programs can also help prepare employees for management roles. The transition to supervising can be a significant change for many.

The internal promotion of skilled trade positions to managerial roles can also strengthen employee morale and provide clear career paths. Many managers who have or will be retiring may have started in an entry-level or junior position. Such employees understand the work and what it takes to be successful on the job—and they often can be great mentors for future leaders.

Review Compensation and Benefits Strategies—Regardless of the line of work, employees are looking for competitive salaries and benefits. If raises or sign-on bonuses aren’t feasible, a benefits package could help seal the deal for some workers. Disability and life insurance can go a long way in showing that companies care about construction employees’ health and well-being. To assist with employee retainment, employers could consider ways—such as health and wellness programs—to help employees in their work and personal lives.

Provide Autonomy—Work autonomy means giving employees the freedom to work in a way that suits them. As feasible, construction employers could look for ways to minimize micromanagement and focus on policies instead of processes. Job autonomy builds trust with employees because it gives them the freedom to manage their work and helps them find purpose in their day-to-day activities. Furthermore, autonomy could help encourage mastery as well. Workers who are newer to the industry may feel like a master of their work sooner, which bolsters confidence and accountability.

Talk to a Construction Industry Expert

Attracting and retaining workers in today’s labor market is one of many challenges in the construction industry. The professionals at VTC Insurance Group are here to help. Give us a call at 248.828.3377 or visit vtcins.com.

This blog is for informational purposes only and is not intended as legal advice.