Most Contractors Struggle To Fill Open Positions. Construction Workforce Shortages Risk

London 17.01.23

Construction workforce shortages are severe and having a significant impact on construction firms of all types, all sizes and all labor arrangements. These workforce shortages are compounding the challenges firms are having with supply chain disruptions that are inflating the cost of construction materials and making delivery schedules and product availability uncertain.

Construction workforce shortages are affecting nearly all construction firms, undermining the industry’s ability to complete projects on time and on schedule. The results underscore how public officials have a vested interest in investing in new construction-focused workforce development programs. 

93 percent of construction firms report they have open positions they are trying to fill. Among those firms, 91 percent are having trouble filling at least some of those positions – particularly among the craft workforce that performs the bulk of onsite construction work.

All types of firms are experiencing similar challenges. 

One of the main reasons labor shortages are so severe is that most job candidates are not qualified to work in the industry. The most common explanation for difficulty in hiring is that available candidates lack the skills needed to work in construction.

Labor shortages are exacerbating the impacts of the widespread supply chain disruptions that have made it difficult for firms to get materials delivered on time and that are driving up the cost of those materials. Over 80% of firms report projects they work on have been delayed because of supply chain challenges and two-thirds have projects that have been delayed because of labor shortages.

Supply chain problems and labor shortages are making construction more expensive. Eighty-six percent of firms have raised base pay rates for their workers while 70 percent have passed along rising materials costs to project owners during the past year.

Cost and supply chain challenges have prompted some owners to cancel or delay projects. Over Fifty percent of respondents report owners canceled, postponed or scaled back projects due to increasing costs, while one-third of firms report projects were impacted due to lengthening or uncertain completion times.

Many construction firms report they are taking steps to overcome workforce shortages. In addition to the fact most firms have raised pay rates, 45 percent are providing incentives and bonuses and a quarter of firms (24 percent) have also improved their benefits packages.

Technology is also playing an important role in helping firms cope with labor shortages and other challenges. Eighty-seven percent of firms agree that their employees need to possess digital technology skills to be successful as firms adopt new technologies. And while few candidates possess key construction skills, nearly two-thirds of responding firms say at least half of the people they are hiring possess the technology skills they need.

The construction association is also pushing leaders to continue working to untangle supply chains that have been hammered by COVID lockdowns, shipping and manufacturing labor shortages and massive inflationary pressure.

There is plenty of work for the industry to perform, there just aren’t enough people to do the work or materials to complete the projects. 

One of the solutions in the current climate is to use well reputable workforce agencies that can supply reliable workforce at short notice.