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How has the Construction Industry Been Affected by the Labour Shortage?

How has the Construction Industry Been Affected by the Labour Shortage?

Advice for contractorHow has the Construction Industry Been Affected by the Labour Shortage?

It’s not much of a secret that the construction industry is facing a labour shortage, as many companies report a lack of labour although faced with growing demands. With the industry itself booming in sectors such as residential housing, commercial properties, and public work projects, the workforce necessary to take on these projects isn’t readily available. So, what effect will the labour shortage have?

Naturally, this problem can’t be fixed by clicking a button or snapping your fingers, but bear in mind that it’s possible to tackle the issues that are created by the lack of labour. So, let’s take a more in-depth look at the problem.

The Construction Industry's Labour Shortage

construction_What's the impact of the construction industry labour shortage?

Source: Canva

Where's the labour shortage?

During the mid-2000s recession, it was reported that the construction industry lost around 2 million workers. Following this recession, many workers never returned to their respective jobs. On top of this, attracting new workers to the industry has proven to be quite a difficult task. Despite the surplus of high-paying positions in this field, young workers are seeking work in sectors such as social services and healthcare instead of skilled trades. Furthermore, the existing workforce is reaching the point of retirement, as about 32% of construction industry workers are over the age of 45.

The impact of the Covid-19 pandemic hasn’t made things easier, with 80% of construction companies reporting that they’re having trouble finding skilled labourers. It can’t be denied that the labour shortage is a huge hurdle, as it’s resulting in a stretched-thin workforce, and this causes delays and additional project costs. Let’s take a closer look at the challenges the labour shortage has created for the industry.

What challenges are construction companies facing?

Source: Canva


Let’s first discuss one of the most important areas affected by the labour shortage in the construction industry: worker safety. Many company owners and workers are concerned about the safety risk posed by the lack of labour on a job site. It’s becoming increasingly common for new, untrained workers to be injured within their first year, and with fewer people to refer to for help or support, the possibilities for injuries and mishaps continue to rise. Fatalities on job sites have increased, and safety is becoming a top concern for many construction companies. 


Another major challenge that the industry is facing is a decrease in quality and productivity. Due to a lack of skilled labourers available, including project managers and supervisors, there are less effective management strategies, generally in the early stages of a project. This lack of management and leadership can lead to costly delays as well as issues during the project's initial and final steps.

The construction sector is a highly competitive market. Thus, contracting companies simply cannot afford to put inexperienced or underqualified workers in these positions, as it’ll cost them more time, energy, and money in the long run. So, how can we work towards solving these issues?

Methods to Mitigate the Construction Industry's Labour Shortage

Source: Canva

Here are some methods to consider to address the issue at hand:

Attract new, skilled labourers

To attract new and younger skilled workers, construction companies need to consider ways to compete with other booming industries. This can include offering incentives such as competitive pay, benefits, educational support, paid time off and so forth. Research suggests that younger workers will leave a construction company if they find they can make 25 to 50 cents more elsewhere. If you’re not able to offer a competitive salary, consider a plan that includes a profit-sharing plan. 

Another avenue to consider is investing in partnerships with local high schools, trade schools, and community colleges to establish relationships with younger talent. Paid time off is an additional method to show new employees that you’re supportive of their need for a work-life balance. 

Training and development

construction skyline_What's the impact of the construction industry labour shortage?

Source: Canva

Competitive wages and benefits are one way to attract new employees, but the smartest companies understand that keeping them requires more incentives. Retaining the best workers is key to growing one’s business and thus, it’s important to show you’re invested in them. Training and on-the-job development initiatives are key factors in attracting and keeping new workers. Offering safety training, skill-sharing and development sessions show your workers that you want them to grow and develop their skills alongside your business. Not to mention, consistent on-site safety training demonstrates that the company they’re working for cares about them and their wellbeing. 

Wanting your employees to learn new skills and leave safe at the end of the day is a huge incentive for many young workers. Lastly, a skilled and trained workforce coupled with regularly updated safety protocols can help a company reduce the costs of workplace injuries and accidents.

New technologies

If you’re still struggling to hire new talent, it’s important to work with the resources that are available to you. There are plenty of smart technologies on the market for construction firms, including construction software that can reduce costs while simultaneously speeding up your work schedule. These programs work to reduce losses, increase accuracy, minimize the use of material resources and free up labour for other tasks. Drones are becoming a way of the future in the construction sector, as they can collect data and survey workflow to determine or monitor areas that require improvement or lack efficiency. Drone surveillance on job sites can also lead to increased worker safety. 

For larger companies, worksite robots are becoming more common. Robots are being used to complete repetitive tasks including bricklaying and rebar tying, as they can be swifter and more accurate than humans.

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Last modified 2023-11-07

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