Labor Shortage: Keeping Workers in the Industry


Labor shortages are not new. The construction industry has been struggling to fill positions since the Great Recession of 2008. During that economic downturn, approximately 600,000 workers left construction jobs – and never returned. 

According to a 2017 report from the McKinsey Global Institute, construction productivity has fallen by half since the 1960s. When the last recession faded, construction began to boom, yet builders have still found it challenging to attract qualified workers. As of February 2020, the U.S. Labor Bureau counted 279,000 vacant construction jobs.

To further complicate this challenge, the COVID-19 pandemic decimated the U.S. construction industry. A survey conducted in April 2020 by the Associated General Contractors of America (AGCA) found that nearly 40 percent of firms were forced to lay off or furlough employees due to project cancellations and material and/or equipment shortages. 

Unfortunately, the current situation may get worse before it gets better. Recovery will eventually come and construction will again boom, but how can the industry ensure the labor force will be there to support it?

Ease the Financial Pain as Much as Possible

While it is never easy to furlough or lay off workers, companies can ease the pain by helping impacted employees access available relief efforts. If financially viable, companies should offer as much severance pay as possible. 

Applying for a loan through the CARES Act Paycheck Protection Plan (PPP) may also help to bridge the gap. The loan will cover several months of payroll and other expenses. However, businesses must meet predetermined criteria to receive the loan and have it forgiven. While numerous companies have applied and should be able to meet qualification benchmarks, many are still awaiting funding, unsure if or when funds will be received.

Enhanced unemployment insurance benefits will help to ease the immediate financial burden for many employees, but filing for unemployment can be confusing. Provide an easy-to-read document with the details, including links to your state’s unemployment office, to help employees navigate the filing. If health insurance is included in your company’s employee benefits, try to cover the employee’s portion of the premium. If that is not feasible, direct employees to insurance options available through the Affordable Care Act (ACA).

Small gestures can go a long way. Consider giving each employee a $50 or $100 gift card that can be used to purchase essentials. While a gift card will have little impact on the overall loss of income, it will show employees that you care and have their best interests at heart. 

Perhaps you can work with a local restaurant to arrange a meal delivery each week. Offer to cover the cost of relevant online courses or direct employees to manufacturer’s websites where they may be able to access courses and other training-related content for free. Although many construction skills are acquired through on-the-job training, employees may wish to spend time learning more about project or construction management. 

Communicating is Key

When the only option available is to lay off or furlough employees, be as empathetic as possible. During the conversation, make sure the focus is on employees, and acknowledge their fears and anxieties. Understand that, although the company as a whole is suffering, it will be difficult for individuals to think past their immediate financial needs. Do not offer false hope, but do share positive indicators for the future.

In the case of furloughs, stay in touch with employees during the separation. Initiate a video conference “gathering” for furloughed employees each week. During the gathering, share updates and allow an open forum for the team to interact on a social level – this can replace the team building that occurs during lunch breaks or after-hours activities. Find the time to call, text, or email each staff member regularly. This will let them know you are thinking about them and help maintain established bonds.

Having a clear communication plan in place will be important when it’s time to rehire separated employees. New safety protocols for social distancing and other COVID-19 related issues will not only be mandated, but employees will want to know their health will be safeguarded while working. If pay or benefits have been decreased, ensure that workers understand how and when those will be restored.

Inevitably, some workers will choose not to return to the construction industry. Be prepared to recruit new employees by developing materials that communicate the benefits that your company and the industry, in general, can offer. The materials can be displayed on your company’s website and also be shared with trade schools and other recruitment outlets.

Lead Them Back to Work

Countless human resources studies show that morale is boosted when employees feel they are part of something bigger, and are trusted and valued. How you treat your staff during this crisis is an opportunity to demonstrate leadership and maintain bonds that have been forged with management and coworkers. Great leaders are mentors and coaches, not bosses, and they understand the importance of treating employees with respect by effectively communicating at all staff levels.

The crisis caused by the pandemic will pass, and construction will again see growth, yet the boom will be stopped in its tracks without laborers on jobsites. Fortunately, there is a positive side to every negative. Although COVID-19 has negatively impacted many people in many different ways, the leadership your company provides can be a positive element that employees can rely upon during these challenging times. Strong leadership is in your power, and may well be what leads your team back to work.


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