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By: Robert Hoyt on October 14, 2020

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Mind the Gap: Four Ways to Manage the Construction Industry’s Biggest Challenge

Operating Insights


What is the biggest current challenge facing the construction industry? It’s certainly not demand—in fact, the worldwide demand for construction is quite high. According to professional services provider PwC, global construction output is projected to grow 85% by 2030, with an average of 3.9% per annum up to 2030, which outpaces global GDP by a whole percentage point. Much of the recent growth in the construction industry can be attributed to both developed countries recovering from the 2008 recession and undeveloped countries continuing to industrialize.

Still, despite the nearly unprecedented demand, and the rapidly growing number of available jobs, the construction industry faces a major challenge that could hinder the projected growth. The severe labor shortage that many construction firms, both big and small, are currently dealing with could have a major negative impact if there aren’t enough workers to keep up with the growing demand. Overall, the skilled construction talent pool is dwindling as a generation of baby boomers—the largest generational portion of construction workers over the last three decades—has either begun to retire or move on to other roles to deal with the economic challenges presented by the recent recession.

As an employer within the construction industry, how do you manage the challenge of a labor shortage to not just fill your job site with skilled workers, but to keep them on staff for an extended period of time? As baby boomers continue to retire, and millennials step into the forefront of today’s labor force, you may have to adjust the ways in which your recruit and onboard if you aim to acquire top talent.

Proactive, Competitive Recruiting

There are two new important aspects to recruiting for construction these days: Proactivity and competitiveness. The time-honored methods of passively enticing constructing talent (i.e. job boards, classifieds, worth of mouth, internships, etc.) have subsided in favor of web-based methods of listing, searching and hiring for construction jobs. Nowadays, social media, mobile devices and peer networks are proactive means of tapping into the millennial talent pool. Beyond the means of connecting with younger talent, you’ve also got to look at the means with which you pursue that talent.

Pursuing passive candidates with offers of a competitive salary and a comfortable work environment is another proactive method of recruiting. Competitive compensation is nothing new, employers from all industries have long since sought to offer competitive salaries in order to attract top talent. In the past, construction workers traditionally made up of baby boomers and Gen-Xers, favored stability and reliability when it came to salaries. These days, in order to entice new, younger workers, you need to compete beyond just the salary level.

Focus on Employee Retention for a Younger Generation

In general, millennials favor autonomy and mobility in both careers and life. Hiring and recruiting is one thing, but once you’ve got them onboard, how do you retain employees that are constantly on the hunt for newer, better opportunities that afford them more financial freedom?

That’s not to say the average millennial won’t respond to a competitive salary, but in general, millennials, favor work purpose and vision for the future over the promise of more money. The younger construction labor force prefers to know why something is being done. They desire immediate, authentic feedback, along with detailed and structured guidance on how to progress in their role and career. So, to retain a younger generation of employees, it’s important to take steps to engage younger employees within the context of day-to-day operations.

Employee Engagement

Obviously, construction companies are going to have to offer more to the younger generation in order to recruit and retain skilled laborers. As such, many are turning to more modern ways to further engage their employees. After all, it’s important to note that, along with the widespread retirement of highly skilled baby boomers, the severe lack of technical schools and certificate programs are also to blame for the shortage of skilled laborers. This means that moving towards a more interactive, mentor-friendly working environment, to provide further training, structure and opportunity may be the best method of attracting and keeping talent. Along with a preference for purpose and structured guidance, the younger generation of workers also values collaboration, teamwork and technology.

Utilize Mobile Technologies and Enterprise Resource Planning Software

The younger workforce generation use technology, particularly mobile technology in almost all aspects of their life, including—you guessed it—job searches. In fact, according to a 2014 Glassdoor survey, “Rise of the Mobile Job Search,” nine out of 10 job seekers will use their mobile device during the search process, and 64% of them will search for jobs via social media. It goes without saying that to proactively and competitively recruit younger talent, you have to utilize mobile tech and social media.

Many construction firms are also successfully implementing mobile platforms for employee engagement and retention with respect to a younger workforce. Remember, millennials value collaboration and many construction companies are appealing to the younger generation by implementation of construction-specific enterprise resource planning software to establish collaborative mobile environments in which data and documents can be shared and utilized. Many of the same construction ERP platforms are beginning to provide a talent management component, which allows for a measured, streamlined approach to everything from recruiting and hiring, onboarding and training, to employee assessment and retention.

The millennials’ favorite toy, the mobile device, can greatly aid employers with recruiting, engagement and retention while also combating the widespread dearth of knowledge and training common among the millennial construction labor force.

It’s important to note that the skilled labor gap with respect to the construction industry wasn’t completely unexpected. In 2013, the Bureau of Labor Statistics projected that there may be a shortage of 1.6 million skilled workers by 2022.

The skilled labor shortage was predicted, but what did come as a surprise to many industry professionals was the peripheral effect of other factors from the recession. For one, the funding for community colleges, technical and trade schools and industry programs that were training the new generation took a big hit, which resulted in fewer workers getting training in the skills necessary for employment. Meanwhile, dwindling numbers of workers from the younger generation are moving toward the construction field, which has prompted companies to adapt by adopting hiring and retention practices that rely on training, development and mobile technologies.

RobertHoytRobert Hoyt is a content writer and outreach specialist for Dexter + Chaney, a construction management software provider based in Seattle, Washington.