Hiring in a Construction Labor Shortage: What HR Should Know

Skilled labor shortages aren’t uncommon in many industries today, but construction is certainly among the most affected. After losing much of its workforce during the pandemic, the industry added 219,000 jobs over the past year. Construction employment recently reached a record high, while its October 2023 unemployment rate of 4% was up from 3.8% the previous month, a record low. 

On the one hand, these statistics are excellent — they show that the construction industry is thriving and most people who want to work can find a job easily. On the other hand, they’re a sign that the demand for labor is outpacing the supply, especially if you’re looking for skilled workers. 

So what does that mean for your talent acquisition team? You need efficient hiring processes and strategies that help you stand out from the competition to recruit and retain your top candidates. 

The Construction Labor Crunch

Construction has always experienced ups and downs in employment, but today, high demand for labor is clashing with low supply. 88% of construction firms reported difficulty filling job openings, according to findings from the Associated General Contractors of America (AGC). 438,000 construction jobs sit vacant, the highest number since recordkeeping began over eight decades ago. The lack of workers is slowing progress on already backlogged projects across the U.S. and delaying the start of federal projects funded by President Biden’s infrastructure bill. 

The labor shortage isn’t expected to subside anytime soon. Construction needs to add two million people — about 60,000 per month — to its workforce by 2026 to meet the demand for skilled workers. For construction recruiters, the demand for an additional 546,000 workers means your work is cut out for you.

Construction was dealing with a labor shortage before the pandemic caused widespread labor shortages that have impacted all industries. Now there’s more demand for workers, and that made the construction industry’s shortage even worse

- Associated Builders and Contractors Economist Zachary Fritz via Construction Dive

What’s Causing Talent Scarcity?

Although the pandemic was a catalyst, it wasn’t the beginning of the skilled worker shortage. Analysts and experts attribute the limited availability of skilled construction workers to a combination of factors:

• COVID-19: When the pandemic hit, 1.1 million construction workers lost their jobs, and lasting supply chain issues began, leading to project delays and higher materials costs.
• Competition From Other Industries: Many workers transitioned out of the construction industry during the pandemic and aren’t returning. 
• Increased Demand for Construction: Projects delayed during the pandemic have restarted, and the infrastructure bill kicked off a new wave of demand for construction projects. 
• Aging Labor Force: 45% of construction workers are 45 or older, and one in five is 55 or older. As the oldest generation of the construction workforce retires, they’re not being replaced with younger workers. Application rates for technical positions dropped 49% among Gen Z from 2020 to 2022, and only 16% are likely to consider a career in the skilled trades.
• Skills Gaps: 68% of construction companies say they can’t fill open roles because they can’t find workers with the skills they’re looking for. 

Resilient Recruitment: Hiring High-Quality Talent When It’s Hard to Find

Despite the challenges you face recruiting construction workers, there are many strategies you can use both to attract new talent and retain your current employees. Try these four recruiting strategies to attract candidates in a tight labor market. 

1. Invest in Training and Development

Making an investment in training and developing your employees might be the most valuable recruiting and retention strategy you can employ. With the construction workforce retiring faster than it can be replenished, companies that take the initiative to upskill and reskill their workers will come out ahead. 

2. Increase Pay and Add Benefits

Between the demand for workers, inflation, and the prevailing wage increase, pay for construction workers is at an all-time high. You not only have the usual competition of other contractors — today, you’re also competing against companies that offer remote work. Increasing pay attracts a higher number of applicants to your open positions and increases the number of qualified applicants, too. But there’s no denying that for some companies, the rising cost of doing business makes it difficult to increase wages. 

To keep rising costs in check, many construction firms are expanding benefits for their employees. One company’s multifaceted approach includes:

• Career pathing, including career coaching and opportunities for employees to speak with leadership 
• Increasing PTO to four weeks per employee
• An upgraded benefits program that helps employees put their health and well-being first and plan for the future

3. Implement Proactive Recruitment 

Proactive recruitment is about building relationships that yield a talent pool your team can draw on whenever you need to hire. Follow these steps to successfully proactively recruit: 

1. Identify who you want to hire. For example, you may be looking to hire more women or Gen Z workers.
2. Engage with your audience online and in person. Attend industry events, set up targeted social media ads, and get your company in front of as many potential candidates as possible.
3. Build relationships with the candidates you want to hire. For example, if you want to recruit younger workers, partner with a local high school to offer apprenticeships or participate in career days at middle and elementary schools. 
4. Attract applicants to your open roles. After putting in the work to get to know your audience, advertise job opportunities to them. 
5. Add interested parties to your talent pool. Applicants who aren’t hired for current open roles might be the perfect fit for a role down the road. 

4. Use Recruiting Tech with AI and Automation

The key to snapping up top talent in any industry today is speed. A slow hiring process increases the chance that candidates will lose interest or accept another job offer. Luckily, recruiting technology with artificial intelligence (AI) and automation enhancements can help cut down rising time-to-hire — and make life easier for your recruiters. Here’s how:

• Use AI assistance to write job descriptions in a fraction of the time. 
• Stay in touch with candidates more frequently while maintaining a consistent voice in your communications thanks to emails and texts written with the help of AI. 
• Spin up and send offer letters faster than the competition with AI-assisted content creation tools.
• Automate time-consuming tasks like sending candidate rejection emails and scheduling interviews.

Find the best applicant tracking system (ATS) for your construction business to reap these benefits and more.

You can be part of defeating the labor shortage with the help of HR technology. Construction HR solutions can help you hire and retain more workers, set them up to excel and grow, and predict and plan for future hiring needs. 

Find out why ClearCompany is the construction HR software your firm needs — sign up for your personalized demo with a ClearCompany expert today.