Since the return to “normal” after the onset of the COVID-19 pandemic, there has been a strong demand for new construction, additions and renovations, contractors have had a hard time keeping up. The shortage of skilled workers is nothing new to the construction industry. One of the major impacts of the COVID-19 pandemic has created labor shortages that have plagued practically every industry. With the significant deficit in skilled labor that was already impacting the construction industry, the COVID-19 pandemic’s impact on the overall workforce took another major toll on the availability of skilled laborers in the construction industry. One option to minimize the impact of this is to undertake strategic planning that is bold and innovative, which allows your company to adapt to dramatic changes in society while addressing industry challenges, providing your company with the opportunity for strong growth into the future.
Construction Workforce Management Challenges
Though the industry has had a continuous issue with finding skilled workers after the recovery from the 2008 financial crisis, demand has only increased over that time. Even prior to the pandemic, the Bureau of Labor Statistics’ numbers from 2018 were already showing two job opportunities for every person who was looking for a job. Though there were initial job losses during the early months of the COVID-19 pandemic due to restrictions on projects, projects being postponed or cancelled, workers staying home and as well as a supply chain disruption, construction demand quickly returned.
Construction Labor Demand: Industry Outlook
It’s estimated that 35% of contractors have reported having to turn down work due to labor issues. It’s estimated that to fill demand over the next three years, another two million additional construction workers will be needed. Because hiring competition equates to wage competition, overhead will rise even as projects see lower productivity and longer schedules. However, there are several smart strategies to help you address these issues:
Construction Supply Chain Management Issues
Supply chain disruptions caused serious problems to just-in-time logistical systems. These issues, combined with inflation, have caused a range of excessive cost increases across every construction vertical, according to a recent AGC report. As delivery delays require long lead times, project schedules stretched due to lack of workers are even more stretched, and project planning uncertainly exacerbates scheduling problems, workflow interruptions and lower productivity. Combined with poor project management and collaboration, it’s created a recipe for disaster requiring significant strategy changes to improve supply chain problems.
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Though these challenges have no fast and easy solutions, adapting to the change in the industry requires doing things differently. From staffing to project management, staying on top of issues provides great growth potential. Start with a strong foundation to thrive in the future.
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