Construction Hiring Challenges and Solutions

The Construction Industry is Having a Hard Time Attracting and Keeping Talent

Hiring qualified talent is one of the biggest challenges facing the construction industry. 

• A survey by the National Association of Home Builders found that labor and material costs are the top challenges for builders.
• 80% of contractors report difficulty finding qualified workers. 

The industry is seeing the repercussions of this, with wages rising sharply to attract bigger talent pools and productivity falling in a field already beset by productivity issues. The industry is also continuing to grow. By 2024, it’s estimated that construction employers will need to bring in an additional 324,000 workers to meet demands.

This blog will explore the most significant hiring and retention challenges facing the construction industry today and provide solutions for each.

Construction's Biggest Hiring Challenges and How to Solve Them

• Lack of Qualified Talent
• New Competition With Other Industries
• An Aging Candidate Pool
• An Undigitized Workforce

Lack of Qualified Talent

As mentioned above, the lack of qualified talent is a massive boon for the construction industry. There are simply more jobs than workers, and in many cases, those applying don’t have the skills or experience necessary to complete assignments in a productive, timely manner. 

Solution: Invest in Recruiting Technology

The construction industry is notoriously slow to adopt new technology, but it’s necessary. Construction must proactively start recruiting qualified candidates, take advantage of new ways to advertise open positions (i.e., social media, job boards, etc.), and adopt technology that can help transform how they employ people. 

Two products, in particular, could help construction employers attract and retain more qualified talent. 

Applicant Tracking System

An applicant tracking system (ATS) is recruiting technology built to help streamline, automate, and optimize the hiring process. Competitive applicant tracking systems help employers proactively recruit by distributing job posts to social media channels and pertinent job boards. They make it easy to apply for positions (through QR codes and mobile hiring capabilities). They help facilitate quick communication, which helps keep top candidates interested, help schedule remote or in-person interviews, and the addition of pre-employment testing can help employers discern who’s qualified. 

Moreover, applicant tracking systems statistically help net more qualified candidates faster (time to hire is highly imperative in today’s challenging hiring climate, where you must assume that all qualified candidates are fielding multiple offers). 

• 78% of ATS users report it’s improved the quality of their hires. 
• 86% say it’s helped them hire faster. 
• 78% of companies who used an ATS say it’s made recruiting easier. 
• 94% of ATS users say applicant tracking systems have positively impacted their hiring. 

Learning Management System

Learning Management Systems (LMS) help train and upskill your workforce (safety training, equipment training, etc.). Competitive learning management systems help employers and employees track their training, pinpoint skills gaps, and document any necessary certifications or credentials. Learning management systems can give construction companies an edge in labor development. They can provide construction companies the ability to meaningfully hire for potential rather than experience—hire talent who showcases a growth mindset and is willing to learn. Companies that regularly invest in learning and development annually earn 24% more profit than those that don’t.

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New Competition With Other Industries

Construction is far from the only industry experiencing labor and hiring challenges. According to the U.S. Chamber of Commerce, manufacturing, leisure and hospitality, and wholesale trade industries are also struggling. These industries are affected by many employees leaving their original industries altogether and jumping to one where they find better pay, more flexibility, and more room for growth. 

In years past, the construction industry didn’t have to worry about competition from other sectors. The gig economy also affects the industry, particularly those that operate hourly. The construction industry, which often only employs workers during warmer months, is also facing competition from industries that provide year-round employment.

Solution: Provide Hourly Workers the Same Perks as Their Salaried Counterparts 

While construction is struggling with competition, they generally aren’t having as challenging a time with staffing salaried positions. Our recommendation would be to start approaching hourly positions the same way you would salaried positions, especially because research on post-pandemic attrition shows that more emphasis on autonomy, flexibility, support, and upward mobility—too often perks associated with salaried vs. hourly—is growing. 

Not only do hourly employees need to make a livable wage and be provided benefits, but they are afforded the same level of perks and benefits as their salaried counterparts. Companies that treat talent as disposable will need help attracting and retaining them in this newly competitive job market. 

Far too often, in the workplace—even in industries driven by hourly talent (which is a large bulk of industries considering 60% of the American workforce is hourly talent)—the best perks (flexibility, autonomy, recognition, career development) are geared towards salaried versus hourly talent (for example, Gallup’s State of the American Workplace report shows that only 3 in 10 hourly employees strongly agree that they have the materials and equipment they need to do their work right). Hourly talent recognizes this and rightfully moves on to positions and industries where they feel respected and in control (see: the aforementioned gig work). 

Here at HiringThing, we work with many partners who rely on hourly talent, so we created Tips for Engaging Hourly Employees and Find Higher Quality Hourly Staff as resources to help ensure you’re a competitive hourly recruiter. 

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An Aging Industry

There’s no way around it: construction is literally an older industry. Between 2003 and 2020, the Bureau of Labor Statistics found the number of workers 55 and older doubled. In 2020, the average age for a construction worker was 42.5. As Baby Boomers start retiring (according to the U.S. Census, all Baby Boomers will be retired by 2030), the industry is forecasted to have an even larger hiring challenge. 

Solution: Reimagine What Your Ideal Candidates Look Like

While construction needs to find ways to engage with younger generations (check out our Guide for Understanding Gen Z Job Seekers for some insights here), those in charge of recruiting need to start reimagining what their talent looks like and make meaningful changes to start attracting that talent. There are already plans for this on a top level, with the Associated Builders and Contractors (ABC) working hard to tap younger talent through apprenticeship programs and marketing campaigns. 

“To fill these important roles, ABC is working hard to recruit, educate and upskill the construction workforce through our national network of more than 800 apprenticeship, craft, safety and management education programs—including more than 300 government-registered apprenticeship programs across 20 different construction occupations—to build the people who build America,” said Bellaman. “ABC members invested $1.6 billion in 2021 to educate 1.3 million course attendees to build a construction workforce that is safe, skilled and productive.

Additionally, the construction industry is infamously male and white—88% of the sector’s workforce is white, and 89% percent is male. Starting to meaningfully diversify talent pools will expand the applicant flow. Check out The HiringThing Guide to DEI Recruiting for ideas on getting started. 

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An Undigitized Workforce

Construction has a reputation for doing things the “old-fashioned way.” The World Economic Forum found successfully adopting technology helps companies reduce costs by 20% In this day and age, companies that don’t adopt technology are not only making themselves less competitive and productive but missing out on talent who don’t want to work for an organization they feel is purposefully ignoring ways to make their jobs easier.

A recent Technology in the Workplace study found that industries like healthcare and supply chain are benefiting from the “perception of technology proficiency,” while construction is viewed by potential employees as the “least proficient” when it comes to adopting workplace technology. 

Solution: Incentivize and Educate Your Staff

Construction is slowly but surely starting to digitize—70% of construction companies report that they’ve adopted at least one technology-enabled process in their operations—and companies that digitize will have an advantage over the ones stuck in the way-we’ve-always-done-things mindset.

Change is scary to many people, especially in change-adverse industries, so digitizing a workforce can be something of a challenge. When attempting to digitize your workforce, sometimes your employees (or leadership, if this digitization effort is the other way around) simply need some incentivization: why should they adopt new technology if things have been working smoothly? Often, all this means is education. Have a solid “why” for why you’re digitizing what you’re digitizing and solid training to ensure everyone is on board. 

For adopting hiring technology, for example, share the stats above showcasing how much better hiring can be when using an applicant tracking system. Then, ensure all relevant stakeholders are trained on using the new technology best.

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Hiring is Imperative to the Construction Industry, and Embedded Hiring is Imperative for Competitive Construction SaaS

Hiring is imperative to the construction industry, which is why an embedded applicant tracking system is the right move for competitive construction SaaS. Here at HiringThing, we’ve partnered with vertical SaaS providers, helping them grow their businesses by offering proprietary hiring solutions to their clients. 

This blog is the first in our construction series, exploring how embedded hiring can give construction SaaS a big leg up on the competition. If you’re in that field, we’d love you to check out this series's second and third installments: Full Construction Management SaaS Involves Hiring and Embedded Hiring Can Help Construction SaaS Solve Construction's Productivity Challenges.

About HiringThing

HiringThing is a modern recruiting platform as a service that creates seamless hiring experiences. Our private label applicant tracking system and open API enables technology and service providers to add hiring capabilities to their solution. Approachable and adaptable, their platform empowers anyone, anywhere, to hire their dream team.