Back in 2012, Forbes reported that jobs in the skilled trades were the most difficult to fill in the United States.
Fast forward to 2020 and the problem persists and is actually exasperated by a historically low economy-wide and construction specific unemployment rate. Across the nation, construction companies are struggling to find skilled craft workers for their projects. In general, the labor shortage is limiting the number of projects that companies can take on and also increasing the amount of time it takes to complete projects.
The struggle is real
According to the Associated General Contractors of America (AGC), 81% of construction firms are reporting difficulty in filling salaried and hourly craft positions, and 65% of firms estimate that it will be as difficult or more difficult to hire over the next 12 months.
Furthermore, according to the December survey for the NAHB/Wells Fargo Housing Market Index, cost and availability of labor topped the list of problems builders faced in 2019, and is expected to return to the number one spot in 2020.
Demand for construction remains strong and residential construction employment is up
Zooming out from the construction industry’s labor issue and looking at overall demand for construction (total value of construction put in place), we see that the value of private construction in 2019 was $974.7 billion, 2.5% below the $1,000.2 billion spent in 2018.
While we saw a slight decrease in private construction spending, privately‐owned housing starts in December 2019 were at a seasonally adjusted annual rate of 1,608,000, 16.9% above the November 2019 rate and 40.8% above the December 2018 rate.
The increase in home building drove residential construction employment up by 20,200 in January, the largest gain in the past twelve months.
Addressing the labor shortage
In the short term, construction companies are looking for ways to cope with the labor shortage. Many firms are increasing base pay rates and overtime hours. The average hourly earnings of construction workers was $31.19 in January 2020, up nearly 3% from January 2019.
Companies are also looking for ways to improve efficiency through technology. In their 2020 Construction Outlook Survey, the AGC reported that 32% of construction firms are increasing their use of labor saving equipment.
In the long term, the construction industry will need to increase the number of young people learning trades and provide training to people currently employed in other fields.
Workyard as a hiring solution
Historically, construction firms have been able to use their roledexes and referrals from existing workers to fill job openings. With an increasingly competitive hiring environment and shortage of qualified workers, this is proving to be challenging. Some firms may have even turned to traditional staffing agencies with high costs and lack of a skilled trade focus.
Workyard is a next generation staffing and human resources company that is tailored to the construction industry. They work with companies of all sizes to provide them with capable workers and technology to easily manage workers’ time, pay, and insurance. For many companies, Workyard has effectively become their HR department by solving hiring and workforce management headaches.
With Workyard’s construction staffing service, they source, interview, reference check and background check all hires — ensuring a rigorous and compliant hiring process. They cover 18 trades and staff for a variety of skill levels, from apprentices to foremen and superintendents. Taking a hands on approach, they provide an account manager to each client to drive successful outcomes and provide an 8 hour guarantee for each hire.
Considering that construction firms cite worker quality and worker shortages as their two biggest concerns for 2020, Workyard has become a valuable partner to numerous companies as they’ve been trusted to provide an increasing number of high quality craft workers.
There are 5 factors that set Workyard apart from other staffing companies:
Master of one - Unlike staffing companies servicing many industries, Workyard specializes in construction. Workyard’s recruiters are trained in carefully vetting out candidates for 18 different trades and are able to provide consistent results.
Sourcing with technology and scale - Workyard has a network of tried and tested craft workers and is constantly adding new talent to their network. Whenever a client has a hiring need, Workyard taps into this network to find a suitable match. They do it by using proprietary software, which drives internal efficiencies resulting in lower costs that are accessible to businesses of all sizes.
Zero admin work - Workyard takes care of the tedious administrative work involved with hiring and workforce management including workers’ compensation coverage and claims processing, W2 compliance, and payroll processing.
8 hour guarantee - To provide peace of mind for clients, Workyard promises an 8 hour guarantee. If for some reason, the client feels that the worker is not the right fit after starting, Workyard will replace them and eat the cost, as long as they are notified within 8 hours.
Simple time and location tracking - Workyard has a proprietary time and location tracking app called Crew which their clients use to track worker hours and cost. Additionally, the app drives payroll each week and enables pay-as-you-go insurance.
Focused on helping construction companies grow
Currently operating solely in California, Workyard has plans to expand across the country in the coming years. With a laser focus on helping construction companies grow through best-in-class staffing and workforce management solutions, Workyard has proven to be a viable solution to the construction hiring crunch.