Contractors Increase Pay, Invest in Technology Amid Labor Shortage

With 80% of contractors nationwide having difficulty finding craft workers, including glaziers, many are spending more to attract workers or investing in technology to replace them. This is according to the Associated General Contractors of America’s (AGC) latest labor shortage survey.

One aspect making the labor shortage more difficult for contractors is that hourly craft or salaried personnel are often lost to other employers. Nearly half of respondents said they’ve lost personnel to other firms in their area. Only 35% of firms reported not having lost any personnel to other employers.

To attract new hourly craft employees, firms have:

  • Increased base pay rates (66%);
  • Provided incentives/bonuses (29%);
  • Increased their portion of benefit contributions and/or improved employee benefits (25%); and
  • Considered increases in pay and/or benefits in the near future (9%).

Contractors are also adding or increasing the use of outside resources for finding workers, including:

  • Career-building programs such as high schools, colleges or career and technical education (50%);
  • Executive and non-craft worker search firms or professional employer organizations (29%);
  • Government workforce development or unemployment agencies (28%);
  • Software to distribute job postings and manage applicants (27%);
  • Staffing firms for craft personnel (27%);
  • Sub- or specialty contractors (26%);
  • Unions (21%); and
  • Applied for employee-based visas (7%).

Nearly half of firms have initiated or increased in-house training to address worker shortages in the past year. Hiring interns, allowing for more overtime and changing hiring standards are other ways firms have addressed the shortage.

While many firms are trying to find ways to attract new employees, some are turning to technology to replace workers or skills. Nearly one-third of contractors have invested in technology to automate processes to supplement worker duties and nearly a quarter have purchased labor-saving equipment. Methods to reduce onsite worktime, such as building information modeling (BIM) and offsite fabrication, were adopted by 23% of respondents. However, 53% reported they have made no changes.

The staffing challenges are causing firms to put higher prices into their bids or contracts (44%), take longer to complete projects (44%), spend more than anticipated (43%) and put longer completion times into their bids or contracts (29%).

“Workforce shortages remain one of the single most significant threats to the construction industry,” said Stephen E. Sandherr, AGC’s chief executive officer in a call about the survey. “However, construction labor shortages are a challenge that can be fixed, and this association will continue to do everything in its power to make sure that happens.”

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