By
Sam Reid
June 23, 2018

Addressing the booming construction industry’s labor shortage challenges

Finding construction labor is a challenge

Across the nation, construction companies are struggling to find skilled tradesmen and laborers for their projects. In general, the labor shortage is limiting the number of projects that companies can take on and also increasing the amount of time it takes to complete projects. Last year, the National Association of Home Builders conducted a survey and found that 82% of builders cited the cost and availability of labor as their number 1 issue. In another survey distributed by the Associated General Contractors of America (AGC), 70% of construction firms reported that they are having a hard time filling hourly craft positions. This finding is concerning when you consider that these jobs represent the bulk of the construction workforce. Specifically, the AGC found that the five toughest craft positions to fill are carpenters, bricklayers, electricians, concrete workers and plumbers.

Demand for construction continues to grow

Although general contractors are struggling to find the subcontractors and workers they need to finish their projects, they are not hurting for business as demand in the construction industry continues to grow. In April, construction spending (total value of construction put in place) rose to a record-high seasonally adjusted annual rate of $1,310.4 billion. Furthermore, privately-owned housing starts in April were at a seasonally adjusted annual rate of 1,287,000 which is 10.5% above the rate in April 2017.

Construction’s role in the US economy

Construction is an important component of the US economy as it makes up 4.3% of total US GDP. The industry has more than 650,000 employers with over 6 million employees. Furthermore, a study performed by Professor Stephen Fuller of George Mason University found that an extra $1 billion in nonresidential construction spending adds about $3.4 billion to Gross Domestic Product (GDP) and creates or sustains 28,500 jobs.

Ripple effects

The labor shortage in the construction industry creates ripple effects in other critical industries such as real estate. For example, this year US new home construction is expected to fall 300,000 units short of demand.

Addressing the labor shortage

In the short term, construction companies are looking for ways to cope with the labor shortage. Many firms are increasing base pay rates and overtime hours. We’ve even heard about workers in the San Francisco Bay Area working from 6am to 11pm on job sites. Companies are also looking for ways to improve efficiency through technology. In their annual survey, the AGC reported that 22% of construction firms are increasing their use of labor saving equipment. In the long term, the construction industry will need to increase the number of young people learning trades and provide training to people currently employed in other fields.

Where Workyard fits in

Here at Workyard we help general contractors to find and hire subcontractors and hourly workers for their construction projects. Historically, general contractors build up their trusted rolodex of subs and workers overtime simply by spending time in the industry. They might find their subs on job sites, at lumber yards or by speaking to other general contractors.Undoubtedly, those are viable and proven methods for finding subs, but GCs now have another option for connecting with the talent that they need — through a large online network. Even with the current shortage of labor, Workyard has proven to be a resource for GCs looking for subs and workers for their jobs.

Workyard helps to solve some common issues that general contractors face including:

  • General contractors with growing businesses (more jobs, bigger jobs, etc.) that do not have enough subs and/or workers in their existing networks
  • GCs struggling to find people for a job at the last minute when someone else backs out
  • New general contractors that need to build up their networks
  • GCs doing projects outside of their usual areas and are having trouble hiring local subs/workers
  • Workyard helps GCs get multiple high-quality and competitive bids for their projects

Join our network

Currently, Workyard helps 1000s of construction companies hire the workers they need to complete their projects. We’ve been at it for a few years now and we’re excited for what’s to come.

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