How best to address construction workforce shortages

As construction firms globally grapple with busy housing markets, material constraints and infrastructure project deadlines, they face additional hurdles in the form of labour shortages.

The construction industry faces a shortfall of 200,000 workers, according to a report released by the Home Builders Institute (HBI) in Washington. Builders nationwide cite the difficulty in filling positions as among their top concerns, ranking third behind high lumber prices and regulatory burdens.

"The home building industry faces a major shortage of skilled workers," said Ed Brady, HBI's president and CEO. "This persistent challenge endangers the affordability and availability of housing and hinders a robust economic recovery."

According to the UK Construction Products Association, 16% of firms cited labour availability as their key constraint over the next 12 months, the highest proportion since 2018 Q4. CPA Economics Director Noble Francis said: "The key constraint to the CPA construction forecasts remains the cost and availability of imported products and skilled labour."

But physically and virtually, there are positive signs that the headache of labour shortages is being addressed. Here are some of the latest developments in the labour sector, and measures which could help tackle the shortages issue.

Broaden industry's appeal

The US needs to build the next generation of skilled tradespeople, Brady added.

And with The Senate voting 69-30 on Tuesday to approve a $1 trillion bipartisan infrastructure bill, a historic piece of legislation that could reshape American lives for decades, the opportunities are now set to multiply across the construction sector.

"That means recruiting more women. It means training and placing minority, lower income, and at-risk youth for job opportunities as an important way to fight against social inequity. It means providing trade skills education to veterans and transitioning military. And it means reaching out to high school students, and those who influence their decisions, to change their perception of careers in the trades," said Brady.

Not only does the US have millions of unfilled openings for skilled tradespeople, consistent work remains out-of-reach for many construction professionals, added Will Rayner, Principal at TDF Ventures. 

Partnerships raise exposure

Trade Hounds, a professional community and hiring platform built for the construction industry, has entered into a partnership with Deltek, which provides software and solutions for project-based business, including construction firms. Trade Hounds has joined Deltek's Marketplace to provide Deltek + ComputerEase customers direct access to the Trade Hounds hiring platform.

Nearly 250,000 tradespeople have joined Trade Hounds to showcase their work, build professional profiles and find jobs. In the fall of 2020, Trade Hounds launched functionality to enable contractors to hire directly from the platform. Today, more than 500 contractors are using Trade Hounds to source skilled labor, which remains the biggest challenge facing the construction industry today.

Peter Maglathlin, Co-founder of Trade Hounds, said: "The construction industry deserves a dedicated hiring platform that meets its unique needs.  Skilled tradespeople are hard to find, which is why we built a home for these workers online.  Contractors across the country are having success hiring from our deep community of skilled tradespeople."

John Meibers, General Manager and Vice President of Deltek + ComputerEase said it is always looking for partners that bring a unique and valuable product or service to the Deltek + ComputerEase customer.

"Trade Hounds has built a unique community for the skilled trades. In today's tight construction labor market, getting access to qualified and skilled tradespeople can be a competitive advantage, not to mention a better way to find and hire those people that you need to grow your specialty contracting business."

eFORCE connects Indian workers

The quick revival of the real estate industry has created a heavy demand on India's largest B2B infra marketplace, eFORCE. Captech Technologies has decided to bring back more than 10,000 labourers through its eFORCE platform from various states like West Bengal, Odisha, Jharkhand, Bihar, Uttar Pradesh, Rajasthan and many more. 

The mobile app acts as an 'enabler' in the unorganised construction market and connects construction companies to e-KYC verified subcontractors / labour contractors to deploy skilled and unskilled labourers with the use of AI and analytics. 

With more than 60 construction companies (i.e. General Contractors and Developers) as clientele, there is a multi-fold labor demand and the company is looking to provide adequate labor supply to all its client across geographies in India. Due to COVID-19 and lockdown restrictions, the migrant labourers left for their native places and were shy to return to work due to no work commitment from contractors. 

Asutosh Katyal, CEO and Founder, Captech Technologies said in the past couple of weeks it has seen labour demand grow exponentially due to relaxation post the second wave lockdown.

"As a company, we are committed to help migrant workers to reach the construction sites properly and we are also ensuring that safe working conditions are provided to them once they are back."

Apps target skilled workers

On the heels of rapid growth, construction tech company Buildforce recently closed a $4 million round led by TDF Ventures, alongside existing investor Mercury and Austin-based S3 Ventures. The additional investment will help Buildforce sustain its 10% weekly revenue growth rate through continued product innovation and expanded go-to-market efforts.

Leveraging a mobile app-based experience, Buildforce streamlines the process for identifying, screening, placing, and managing skilled construction professionals on behalf of construction contractors.

For construction tradesmen, Buildforce increases lifetime earnings, improves job security, and provides continuous high-quality work in an industry rife with layoffs at the end of a project. The end result is a win-win for both sides of the marketplace.

"Buildforce is helping solve the workforce shortage by matching the skills job seekers have with the skills employers need," said Beau Pollock, CEO of TRIO Electric, one of the largest commercial electrical contractors in Texas and a client of the company. "Moody and his team have developed a new and much needed solution for the construction industry." Pollock is also an investor and member of the company's Board of Directors.

According to the Associated General Contractors of America, the US construction industry has more than 733,000 employers, over 7 million employees, and nearly $1.4 trillion in annual construction volume.

Specialty contractors responsible for performing the work spend on average 40% of annual revenue on their workforce, but experience on average 80% annualised employee turnover due to a variety of factors inherent to the construction industry. And due to high demand for homes, buildings, and other physical assets, jobs in the construction trades that Buildforce services are expected to grow 8% annually over the course of the next decade, or twice the national average.

"Contractors depend on skilled and reliable tradespeople to meet project timelines," said Moody Heard, co-founder and CEO, Buildforce. "Our key insight is that by optimising the user experience for skilled tradespeople seeking higher pay and job security, we are able to help meet contractors' needs. We're thrilled to have become the partner of choice for the top contractors in our current markets looking to connect with this workforce."