Solving Construction’s Workforce Shortage Requires Changes At The Top

During the last recession, contractors struggled to provide enough work for their current employees and could not afford to bring on new apprentices for electrical, carpentry and other trades.

Now, in the midst of a construction boom, aging employees are retiring from skilled trades with no one to fill their shoes.

Today, over three-quarters of contractors say they are having a difficult time filling openings in their companies, while 68% predict that hiring will become more difficult in the coming year.

Some contractors are working to address their labor issues by reaching out to students in high school and appealing to demographics like women and minorities that are currently underrepresented in construction and skilled trades. 

In addition to that outreach, contractors may need to begin promoting facets of their industry that appeal to Generation Z, such as industry growth, earning potential, advancement opportunity, technological advances and the spirit of entrepreneurship.

"Construction is still largely dominated by middle-aged white men," said Laura Cataldo, who serves as a senior manager in Baker Tilly’s commercial real estate and construction practice. "If contractors are going to survive, they need to diversify their organizations and put structures in place to be welcoming to diverse groups."

While working to recruit more entry-level employees will certainly help, Cataldo believes that retention is a more viable long-term solution, and the one contractors should focus on. Employees, she said, are a contractor's most valuable asset, as they are responsible for business results and competitive advantage.

Employees with experience are a hot commodity in today's market. As their best employees get poached by competitors, contractors are suffering as they find key talent is difficult to replace.

Many factors influence retention. Experienced employees expect more than just higher base compensation — they also expect more and better-defined benefits, more flexibility and increased development opportunities.

Contractors can offer a blend of base salary, short- and long-term incentives and benefits. Compensation can be used to recruit talent, reward desired behaviors and retain key talent. Many contractors have reached out to Cataldo and Baker Tilly for guidance to evaluate if a company's salary and bonus structure is adequate to recruit, reward and retain employees.

"Of course, being competitive with compensation is important, but what makes employees stick around is the culture of an organization," Cataldo said. "They want to feel that their company is in line with their personal beliefs and values. Contractors that offer high pay but a poor culture are just going to churn and burn through their employees."

The culture for a contractor must accommodate all employees, whether in the office or in the field. Cataldo said contractors may not realize that workplace culture encompasses the sum of the company's values, traditions, beliefs, behaviors and attitudes. Culture, she thinks, should be deliberate and planned from the management level to retain and recruit employees.

One cultural change Cataldo suggested was apprenticeship. The classic model of apprenticeship, in which an older employee dictates a successive list of tasks for the trainee to complete, might not be a good cultural fit to younger workers who prefer to be self-directed. 

"This is a generation that has never waited for information," Cataldo said. "All they have to do is Google it or ask Siri. It is management's role to uphold a culture that accommodates all employees."

Instilling that culture might mean providing supervisory or communications training for field leaders that provide the direct supervision to apprentices or calculating a portion of the bonus on supervisory skills.

Benefits are increasingly important to generations entering the workforce as they strive to achieve both personal well-being and rapid advancement. Across all industries, employers are working to offer flexible work schedules, telecommuting and career development to attract younger employees.

But in the world of construction, flexible work schedules and telecommuting can be challenging to provide to all employees equally. A project manager might be able to work from home or when needed, but a carpenter can't do the same. Some contractors are creating flexibility for trade professionals by offering a four-day workweek.

Many contractors have excelled in providing a clear path for advancement and career development, as the apprenticeship model is based on hands-on experience paired with classroom training. But to help newer employees advance, contractors need to teach more than technical skills. They also need to help talented employees assume supervisory and leadership responsibilities and provide training in softer skills like negotiations and communication.

Over the last five years, construction has been booming and many contractors have grown rapidly. Many have built out new areas of expertise, such as prefabrication practices. But often, their management capacity has not kept pace.

"These companies are so focused on hiring production staff that they may not realize their managers are filling three roles at once," Cataldo said. "One of our biggest jobs is to help clearly define every role in the organization and the competencies that each requires. This clarifies the skills employees need to master before advancing to the next step."

When the responsibilities for each role are clearly defined, it is easier to identify when there is a need for new employees. This process also helps with defining the competencies necessary for success, helping to map out advancement for employees who have just arrived.

"Developing a proactive plan to recruit, reward and retain talent is critical in the increasingly competitive workforce market," Cataldo said. "Successful contractors are increasingly aligning workforce strategies with their overall corporate strategies. I'm thankful for the opportunity to help contractors meet their future strategic goals."

This feature was produced in collaboration between Bisnow Branded Content and Baker Tilly. Bisnow news staff was not involved in the production of this content.