How to Manage the Current Construction Labor Shortage

There is an old saying that states, “A company is only as good as its people.” This is doubly true in construction. When taken literally, trade businesses are only as strong as the skilled tradespeople doing the work.

But what happens when trade labor dries up? That’s exactly what’s happening now in the United States.

This effect was recently noted by the Associated Builders and Contractors organization. Their construction labor shortage statistics show that as of January 2024, the construction industry was short 500,000 workers. This is, of course, on top of regular hiring needs, which only adds to the issue.

Those who run small- or medium-sized contracting businesses have likely seen the effects of the labor shortage on your books. If you have noticed an imbalance of workers to increasingly available projects, you’re not alone.

Luckily, there are methods you can take to help bolster your business against these hiring headwinds. Follow our guide to learn effective strategies for hiring, staff training, and retention. With these skills in hand, your business can potentially hold on until sunnier skilled labor skies.

Long-Term Training and Development

It’s quite possible you already have everything you need to be successful during this construction and carpenter shortage.

Right now, the demand for generalists has never been higher. So, while this summer an employee or that apprentice may have initially been just a helper, consider them as more. It’s quite possible that they can be trained to do much more.

Every skill gap filled in your operation is one fewer person to hire. And with a greater set of opportunities at their disposal, the employee will be much less likely to quit. This means one fewer person you eventually must hire as well.

Obviously, there are licenses and certifications to honor. But consider helping elevate your staff in both functionality and stature on the job site. Invest in your people, and you’ll reap a return.

Strategic Culture Development

You’ve likely heard that old, misquoted movie line: “If you build it, they will come.” Well, in spite of the misquote, the notion of that line still rings true when it comes to your company’s culture. Specifically: good culture will inspire growing interest within your workforce (and throughout your labor force’s personal networks as well).

Why? Consider things this way: A company with high turnover is only ever going to have to fight against bad word-of-mouth, poor reviews, and complaints from customers, and more. But a contracting company with happy, supported long-term employees? They effectively serve as free advertising for your business’s open positions.

When employees become aware of a friend or family member’s need for a job, happy ones are more likely to mention your business is a great place to work.

During a skilled labor shortage in construction, this is key, as your business can only market itself to prospective employees so much. At the end of the day, word of mouth will always take the top spot in the minds of those considering an opportunity.

But how do you develop a strong company culture to ensure your employees are happy to share their great experiences with their own networks? We can sum it up in one word: respect.

When you build your company values on respectful, clearly defined role delineation, there becomes a lesser chance of unsafe or hostile work environments. Your company’s rock-solid culture depends on clearly defined roles, rules, and actions. These show respect to the employees filling the roles and allows those employees to respect the chain of command more easily. But it doesn’t stop there.

Accountability is another key ingredient when establishing your company culture. Accountability comes from the top, though. So, when looking at properly aligning company functions, hierarchy, and performance, your management team needs to be held to the same standards. This is where leadership development comes into play.

By investing in a mandatory and tailored leadership development program, you can ensure that your management team is ready to bring positive energy, strategic thinking, and novel approaches to the day-to-day work. And that is worth its weight in gold during a construction labor shortage.

Whether you employ dozens of employees or it’s just you and an apprentice, the culture you establish in the workplace every day speaks volumes about what it’s like to work with your company. By prioritizing and promoting positive culture that’s an engaged, opportunistic, and safe space for all workers, you signal that your company has made intentional efforts to rise above the competition.

This also establishes a rock-solid foundation for your current employees. And as any business owner knows, the good employee you keep is worth double the new employee you have to hire, onboard, and train.

Form Strategic Partnerships

If the market conditions are true for your business, they are conceivably true for other contractors and labor services that operate in your area. This means that skilled labor shortages are just as true for your competitors as they are for your own business.

In cases like these, consider working with other vendors in your local area to trade services. The subcontracting space has abounded in contracting for years, but during labor shortages, a skilled laborer is worth their weight in gold.

By identifying partners with needs for the skills your team brings to the table, you can position your business as an on-demand sub-contractor. Similarly, if your team lacks a skill, work with other service providers to borrow their skilled talent for a one-off job.

This approach, though more administratively involved, mean the difference between serving your clients’ needs and potentially losing a job. And isn’t some income for your business better than none?

Hire a Coach

There are a thousand things a small business can do to be successful during uncertain economic times. Still, something like a plumber or carpenter shortage means different things to different businesses. Your needs, limitations, and capabilities are your own. Anyone who gives you a seemingly simple, pre-packaged solution to your worker shortage problems doesn’t get it.

Thankfully, business coaching from the Contractors Coach is available for just these moments. A business coach like the Contractors Coach can help you identify the areas of your business that are working (and those that aren’t). They pull from specific experience in the contracting space to identify new labor shortage strategies that have worked for businesses similar to your own. And they can partner with you to tailor new business models or operational approaches to make your business leaner, more focused, and potentially more successful. During uncertain economic times, a partnership like this is all the more imperative.

Whether you want to grow your business or want to lessen the effects of the labor shortage on your bottom line, we can help. Our tailored consulting model means you’ll get a unique, specific action that is built around your business’s needs.

Learn how we can help your business grow.