Conversations in Construction: Addressing the skilled labor crisis

As part of the Conversations in Construction video series, Construction and Real Estate VP Dustin Stephens and industry experts examine some of the unique challenges and groundbreaking innovations in the world of construction.

Episode 1: Addressing the skilled labor crisis

Construction is vital to the well-being and prosperity of communities across the country.

The industry plays an indispensable role in supporting infrastructure, fueling economic growth, and driving progress and development.

Construction businesses feel this pressure every day as they bring projects to life in an increasingly difficult landscape.

In this article, we’ll explore industry insights, the current position of the construction industry and what businesses can do to attract and retain top talent.

Here’s what we’ll cover

Sharing industry insights

The state of the skilled labor shortage

Recruiting & retaining top talent

Learning from industry peers

Final thoughts

Sharing industry insights

At Sage, we’re constantly innovating to deliver best-in-class solutions to address the evolving needs of construction businesses. We’ve had our pulse on the construction industry for more than 50 years.

Throughout this journey we’ve built an incredible community of customers, partners, and industry colleagues. Our community is at the heart of everything we do.

I am fortunate to be a part of this community. I have learned so much from the collective knowledge and expertise of this remarkable group.

I’m pleased to announce that we will be sharing some of their wisdom and best practices through a new four-part video series, “Conversations in Construction.”

Through this series, we strive to deliver actionable insights to help construction businesses weather current and future challenges and continue to thrive. 

Having spent my entire career in construction, I appreciate the demands of the job and deeply value these conversations with industry peers.

Let’s take a closer look at one of the top challenges currently weighing on contractors’ minds and ways to lessen its impact.

The state of the skilled labor shortage

One of the most pressing challenges in the construction industry today is the skilled labor shortage.

There is a growing gap between the demand for skilled workers and the available workforce. Estimates put the deficit at anywhere from 500,000 to 1,000,000 laborers.

Meanwhile, projects are becoming more complex. Without enough skilled labor, construction businesses face a number of issues, including delays, increased costs, and quality concerns.

Most contractors are having difficulty filling open positions.

In the 2024 Construction Hiring and Business Outlook released by Sage and the Associated General Contractors of America, 77% of respondents report they are having a hard time filling some or all salaried or hourly craft positions.

In addition, the majority (55%) expect that hiring will continue to be hard or will become harder in the year ahead. Thirty-one percent expect no change, while only 13% say it will become easier or remain easy to hire.

This worker shortage is a long-standing issue in the industry. It has been exacerbated in recent years by factors such as the pandemic and an aging workforce retiring without an adequate influx of younger talent to take their place.

While it affects various roles within the construction sector, from architects and engineers to tradespeople like carpenters and electricians, the biggest impact has been on skilled workers in the field.

To address this challenge, businesses need to focus on attracting and retaining top talent.

This is often easier said than done amid fierce competition for the available talent pool. However, there are ways businesses can set themselves apart.

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Recruiting & retaining top talent

Top employees can have their pick of places to work. Construction businesses need to create an environment that attracts skilled workers and makes them want to stay.

While competitive pay and top-tier benefits are a great place to start, being a top workplace is about more than money.

There are several things businesses can do to help recruit top talent, including:

Cultivating a winning company culture

Company culture is a big consideration for workers as they seek out the best fit.

Employees want a positive work environment that puts people first. The type of place that sets teams up to succeed and shows appreciation and respect.

Company leaders can set the tone for the company culture by demonstrating integrity, transparency, and a commitment to employee well-being.

It is important to foster open communication, so employees feel comfortable sharing ideas, concerns, and feedback.

Leadership should also be open about company goals, challenges, and decisions to help build trust and alignment within the organization.

Promoting career development

People are a construction business’ biggest asset, so it is critical to invest in them.

This includes offering opportunities for training and skills development and professional certifications.

This helps employees perform their jobs more effectively. Continuous learning can also help upskill them and prepare them for other roles they might be interested in.

It is also important to provide advancement opportunities within the organization and help set a career path. Employees feel more invested when they have a clear path that enables them to grow and achieve their goals.

Valuing mental health & well-being

Many in the industry have taken on increased workloads as businesses struggle with filling skilled positions.

Ensuring all employees have the tools and technology they need to complete their roles as effectively and efficiently as possible can go a long way toward easing this burden and improving employee satisfaction.

It can also improve collaboration across the organization and reduce stress levels. This can positively impact overall employee mental health and well-being.

Businesses can also promote a healthy work-life balance by offering:

  • flexible work arrangements
  • generous vacation time
  • resources to support employees’ mental and physical health

By fostering a supportive and compassionate work environment, businesses can not only attract top talent but also nurture a resilient and thriving workforce.

Learning from industry peers

It takes time and commitment to change company culture, but taking steps now can put businesses on a path to creating a top work environment.

Hearing from peers is a great way to get ideas on where to begin.

As part of our “Conversations in Construction” video series, I recently had the pleasure of sitting down with three construction leaders who shared their experience in navigating the skilled worker shortage and building a strong workforce.

Matt Abeles, Vice President of Construction Technology and Innovation for the Associated Builders and Contractors, a national construction industry trade association established in 1950 that represents more than 23,000 members. Founded on the merit shop philosophy, ABC and its 68 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work.

Julie Strong, Owner and CEO of C1S Group, an award-winning full-service engineering and construction firm specializing in the design and installation of projects for existing facilities.

Thomas Cochran, CFO at New West Building Company, a residential and commercial builder that values proactive collaboration and transparency and utilizes the latest technologies to deliver streamlined, high-quality projects.

Final thoughts

Construction businesses can lessen the impact of the current labor shortage by creating an environment where employees feel valued, motivated, and empowered to succeed.

This, in turn, drives higher levels of employee engagement, productivity, and retention, ultimately contributing to the company’s overall success and competitive advantage in the industry.

Watch episode one of Conversations in Construction: Addressing the Skilled Labor Crisis to learn more about how businesses are tackling the labor shortage while recruiting and retaining top talent.