Tariffs. Inflation. Bear markets. Recession?
These scary economic terms have dominated headlines lately, and every construction executive is understandably concerned about the future of their business. According to Forbes, the scale of proposed tariffs has prompted economic teams to raise the risk of recession this year to 60%. It seems inevitable that new cost burdens and commodity inflation will affect everyone. Your instinct may be to pause any spending and cut back, but this economic climate presents an opportunity to strengthen your operations and build genuine resilience by thinking differently about your most valuable asset: your workforce.
CONTINUING ED
With construction workers in short supply, continuous learning is not just beneficial—it’s essential for survival. According to Deloitte, 44% of the current skill requirements in infrastructure are expected to evolve over the next five years. Offering opportunities for career growth and diversification can help combat high turnover rates while remaining competitive.
Effective learning strategies include:
- Creating cross-training programs that develop versatile crews capable of adapting to changing project demands
- Implementing mentorship structures that transfer critical institutional knowledge from experienced workers to new talent
- Leveraging microlearning tools that deliver training in digestible formats compatible with jobsite realities
WELL WORKERS WORK WELL
Construction has traditionally focused on physical safety, but comprehensive wellbeing includes mental and financial health, both of which are significantly impacted by economic uncertainty.
Construction workers have one of the highest suicide rates among all industries. According to the Centers for Disease Control, in 2023, male construction workers had a 75% higher rate of suicide than men in the general population. Financial stress can negatively impact psychological distress. Offering wellness programs can increase employee wellbeing and retention rates.
Strategic wellbeing initiatives include:
- Financial wellness education tailored to the unique compensation patterns of construction work
- Mental health resources designed to address industry-specific stressors
- Work-life balance accommodations that acknowledge the demanding nature of construction schedules
MANAGEMENT BY TECH
Integrated HR systems that connect candidates from hiring through onboarding and accurately track their time for payroll can also create the foundation for economic resilience. If you can maintain construction talent from hire to retire in the same system, you’ll find the ability to plan for economic downturns.
An integrated approach builds construction resilience through:
- Enhanced labor cost controls. In a downturn, knowing exactly where every labor dollar is critical. Labor can sometimes make up 50-60% of a project’s total cost. Accurate time tracking not only prevents fraud and errors (which can quickly bloat costs), it provides granular data for precise job costing, ensuring your bids are competitive yet profitable. Time tracking is also essential for navigating complex compliance rules like union agreements, avoiding costly penalties. When you have real-time visibility into hours worked, tied directly to projects and cost codes, you gain immediate control over potential overruns.
- Streamlined core HR processes. Core HR processes, like managing certifications, handling benefits administration, tracking PTO and payroll, keep your business running. Disconnected systems or manual tracking for these tasks create administrative drag and potential compliance gaps. An integrated system streamlines these workflows. Integrating time tracking and payroll for example can save up to 15 to 20 hours per week, freeing up your HR team and managers to focus on strategic initiatives like employee development and retention—crucial elements for maintaining a skilled, motivated workforce during challenging periods.
- Data-driven planning. Resilience requires foresight, and foresight requires good data. When your time tracking, payroll and HR systems are integrated, you create a powerful data engine for planning. You can accurately forecast labor costs for upcoming projects, identify potential skill gaps based on project pipelines and make informed decisions about staffing levels. Integrated data helps answer these questions proactively, allowing you to budget more accurately and anticipate needs rather than reacting to crises. This contrasts sharply with trying to forecast based on messy spreadsheets or lagging indicators.
BUILDING TRUE RESILIENCE
The construction firms that will weather economic uncertainty aren’t those that simply cut costs—they’re the ones that invest strategically in workforce capabilities and management systems. By fostering continuous learning, prioritizing comprehensive wellbeing and implementing integrated technology solutions, you position your company not just to survive challenging times but to capitalize on opportunities others miss.
SEE ALSO: FUTURE-PROOFING THE SUPPLY CHAIN
