Construction Labour Shortage? How to Improve Hiring and Increase Retention

The construction industry in Canada has experienced some volatility over the past few years – both good and bad. Interest rates have had an impact on all construction projects. Expected interest rate cuts combined with increased government housing targets and affordability initiatives are anticipated to drive construction growth. This boost will increase demand across all construction sectors.

The AGC (Associated General Contractors)) reports that 80% of U.S. firms are struggling to find workers while 69% of firms anticipate increasing headcount in 2024 due to heightened demand
BuildForce Canada anticipates a shortage of over 64,000 workers by 2028 due to an aging workforce and increased demand for skilled labor
According to RBC the pace of construction would need to jump by 50% to meet future population growth in Canada alone.

Associated Builders and Contractors (ABC) estimates that the U.S. construction industry needs to attract about a half million new workers in 2024 alone to balance supply and demand

The problem for those who want to benefit from increased construction opportunities comes down to Supply & Demand. The labour shortage and high turnover in this industry makes it difficult to take on new projects or complete existing ones on time and on budget. Let’s investigate what the issues are from a worker perspective and what others are doing to attract and retain skilled reliable team members who will want to stay for the long term.

First the issues: We found the following to be the major challenges faced by construction workers

1. Compensation and Job Security

Short Contracts/Temporary Jobs: Lack of job stability and security.
Hourly Wages: Unpredictable income influenced by external factors such as weather and schedule changes.
Poor Health/Sick Time Benefits: Financial consequences of unexpected illness

2. Work Conditions

Physical Demands: Heavy, repetitive, and/or exhausting tasks.
Unsafe Work Environment: Issues such as excessive temperatures, messiness, and disorganization.
Long Hours: Strain on personal relationships and family responsibilities.
Safety Equipment and Training: Adequacy, company issued or affordability of safety equipment or required training.

3. Career Development

Limited Advancement: Few opportunities for promotions from within.
Lack of Professional Development: Minimal investment in training and development.

4. Workplace Culture and Ethics

Poor Teamwork: Challenges with collaboration and morale.
Lack of Diversity: Limited inclusivity and sense of belonging.
Questionable Ethics: Concerns regarding expectations and key motivations tied to profits.
Mental Health: Stress and mental health related to demanding work conditions and job insecurity.

5. Operational Challenges

Monotonous Roles: Repetitive tasks leading to dissatisfaction.
Temporary Unskilled Workers: Increased burden on permanent staff during peak periods to make up for inexperienced workers.
Neglect of Employee Welfare: Insufficient focus on worker well-being in decision making.
Regulatory Compliance: Challenges related to adherence to safety regulations and industry standards.
Technological Change: Issues arising from the adoption of new technologies and adequacy of worker training.

We’ve gathered some Best Practices for Hiring and Retention to help you identify where you are at and which of these you can reasonably do to close the gaps and increase retention of your workforce:

1. Recruiting & Onboarding

Do you conduct exit interviews to understand why people are leaving and what to improve?
What targeted hiring practices and leadership development programs does your company implement to ensure that frontline management teams and the overall workforce reflect a diverse and inclusive group of employees?
How does your company ensure transparency in the hiring process, including clear criteria for job qualifications and open communication about selection procedures?
Do you employ RJPs (realistic job previews)? These provide candidates with a clear understanding of the job expectation, work environment, and challenges to ensure a better fit in the recruitment stage. They also help to improve new hire retention as candidates get a good sense of the role and requirements before committing to the job. 
Do you have an Enhanced Onboarding Process? This means going beyond initial training to include mentoring and social integration into your team. These extra steps help to build, teamwork, loyalty and a sense of belonging.
Does Your Firm Nurture Individual Growth? Do you schedule regular Performance Appraisals? Are they structured and do your employees know how to prepare for them?
Is there an incentive to improve performance?
Do you pay for professional training and development opportunities?
Do individuals have opportunities to upskill or job shadow within a specific trade or a new trade?
Do you offer competitive benefits like health insurance and performance bonuses?

2. Diversity, Inclusion and Equity

What specific inclusive initiatives and diversity training programs does your company have in place to promote a diverse and inclusive culture and work environment?
Does your company have a non-discrimination policy and demonstrated leadership commitment?
Do you ensure pay is equitable across the organization?
Are recruitment and promotion decisions based on merit?
Do you promote from within for Senior roles wherever possible?

3. Connected Workforce

Do you have daily tailgate meetings to engage crews and foster teamwork?
Is your company communication clear and are there regular updates on company plans, new projects, current challenges and solutions?
Do you have regular workshops, mentorship programs, cross-departmental projects and team building sessions to strengthen connectedness and collaboration among team members?
Are there feedback mechanisms and recognition channels, such as surveys, one-on-one meetings, and awards programs, to address concerns and celebrate achievements?

4. Health and Safety

Does your firm have a zero-injury goal that is visible and measured?
Is your Health and Safety program proactive and responsive to incidents?
Do you offer wellness programs and conduct regular safety audits?
Is there a stocked First Aid kit on jobsites?
Are Safety Protocols updated and communicated regularly?
Is your safety training measured for effectiveness?
Do you reward safe practises?
Is there an annual subsidy for safety footwear?
Are safety practices reviewed during daily tailgate meetings?

5. Feeling Valued

Does your company offer health insurance or retirement plans
Are family resources (ie. EAP) available to help workers feel supported through difficult times?
Is Work-life balance considered in project bidding schedules and reasonable requests for time off supported?
Do employees feel they have Job stability?
Is regular performance feedback and recognition the norm?
Do you provide on-site health screenings, counseling services, and fitness facilities or programs? Are the physical demands of the job addressed to reduce burnout and/or injuries

6. Leadership Style

Is your Leadership respected?
Do they communicate clearly and respectfully?
Do they hold themselves accountable for the commitments they make?
Do they have the right skills or competency for the work they are overseeing?
Is there ongoing leadership training and 360-degree feedback for improvement?
Is their leadership style supportive and collaborative?

While this list of best practices is not exhaustive, it does address many of the issues that construction workers have and why turnover is high, and recruitment is difficult for this industry.

Naturally making changes takes time and resources. Knowing which to make and when requires an assessment of your current state, the main pain points and a vision of what you want to achieve.

Need Help?

We excel at uncovering your organization’s pain points in order to transform your operations whether it be solving workforce issues, improving administrative functions, creating efficiencies, improving productivity, and/or aligning leadership to strategic objectives.

Check us out and let’s discuss your challenges and how to strengthen your workforce so that you can take on more projects with confidence.