Navigating the Skilled Construction Worker Shortage

Demand for construction work is increasing, but a skilled construction worker shortage may make it difficult for some contractors to take on projects while maintaining a safe worksite. Successful navigation of the skilled construction worker shortage will require strategies that balance project needs with safety.

Construction Demand Is Set to Increase

The Infrastructure Investment and Jobs Act, which was signed into law in 2021, included around $550 billion in new federal investment for roads, bridges, water infrastructure and other projects. According to a Construction Dive article from early 2023, this money is starting to flow into projects. Meanwhile, the U.S. Census Bureau says new residential construction increased in May 2023, with a 5.2% increase in building permits compared to April. Construction demand appears to be on the rise, and contractors need to be ready.

Skilled Workers Are in Short Supply

Associated Builders and Contractors says the construction industry has a shortage of approximately 546,000 workers. This means that the industry will need to hire an additional half a million workers on top of regular hiring just to keep up with the demand for labor.

In a 2021 report, the U.S. Chamber of Commerce said that 62% of contractors were reporting a high level of difficulty finding skilled workers, and 45% of contractors said they’d had to turn down work due to the skilled labor shortage. Contractors also reported having trouble meeting schedule requirements, putting in higher bids and asking skilled workers to do more.

The Impact on Safety

Contractors who are facing a skilled working shortage may be worried about how they will take on new projects and meet deadlines, but there’s another serious concern: safety. Skilled labor shortages can impact safety in numerous ways:

Skilled workers may have heavier workloads. In fact, the Chamber of Commerce already found that skilled workers are being asked to due more. Contractors who are overworked may be more susceptible to mistakes and injuries.
New hires may not have the experience to stay safe on the job. Travelers found that 34% of workplace injuries occur during the employee’s first year, and these injuries result in nearly 7 million days of missed work. In the construction industry, first-year injuries account for 47% of all workers’ compensation claims and 51% of workers’ compensation costs.

Strategies for Success

The labor shortage is a widespread problem, so there’s not an easy solution. However, there are strategies that contractors can start implementing now to ease the pressure of skilled worker shortages.

Assess your compensation. When workers are in high demand, they have their choice of jobs. Make sure your compensation is competitive enough to attract top workers.
Find overlooked talent. Some workers may be passed over due to gaps in their employment history or a failure to meet requirements that don’t really matter. Reassess your hiring criteria and make sure you’re focused on the right things.
Invest in training a new generation. This is a long-term approach, but it one that can pay off in the long run. Investing in training programs and initiatives to recruit more workers into the construction industry can help ensure that there are capable construction workers in the future.
Offer training and upskilling to current workers. Skilled workers don’t start out skilled. If you have unskilled workers who are eager to learn, help them receive the training they need. Associated Builders and Contractors says that ABC contractors invested around 8% of payroll on workforce development in 2022, which is an increase from 7.4% in 2021.

How to Keep Worksites Safe During Labor Shortages

While solving the skilled worker shortage is the long-term goal, in the meantime, safety needs to be a priority.

Train new workers. Don’t assume that new workers have the experience or knowledge they need to stay safe. The previously referenced statistics on first-year injuries prove that they don’t. Provide training on safety, including proper use of personal protective equipment, how to use equipment safely and safety procedures. Use a mentoring program or monitoring to ensure that safety policies are being followed.
Don’t cut corners. When you’re trying to meet a deadline and you don’t have enough workers, you may be tempted to cut corners, but it’s important to always follow OSHA guidelines and safety best practices. Otherwise, an injury could result, and that will cost you much more in the long run.

The skilled construction worker shortage is just one of many risks that contractors need to navigate. BNC Insurance can help you secure a custom-built insurance package that controls your risks. Learn more.