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In late 2020, the U.S. Chamber of Commerce released Q4 data from its annual Commercial Construction Index that painted an optimistic outlook for the industry overall, but a gloomy story around the labor shortage that’s plagued it for years. While the data wasn’t likely shocking for construction executives and business owners who’ve been battling recruiting and staffing challenges for years, there was one data point in particular that stood out.

That data point: 39% of contractors who report a skilled worker shortage say it’s forcing them to turn down work.

This is significant for numerous reasons, but it underpins one of the many challenges facing construction companies in the era of COVID-19. As if supply chain issues, project delays, and a decline in commercial real estate weren’t enough, skilled labor challenges compound them.

In a World Short on Skilled Talent, How Do Construction Companies Stay Competitive?

Of course, there’s good news in the bad. The Chamber of Commerce report did reveal higher confidence among construction executives and employers in the future of the industry. Key indicators like new business, revenue, and backlog trended upward, which paint an optimistic picture about what life will be like post-COVID.

However, these projections simply underscore—and exacerbate—the labor shortage powder keg.

While there’s reason for optimism around long-term economic indicators, a healthy pipeline of projects is only as good as a company’s access to labor to complete them. Without the right talent, companies won’t be able to capitalize on the opportunity ahead.

So, what’s the solution?

The answer to that question is obviously complex. Like many industries, the trends around young people entering skilled trades is troublesome. That talent pool needs to expand—and fast—to keep this from being a perpetual, long-term plague on the industry.

That being said, there are tactics and strategies construction executives can use to be more competitive for the talent that does exist. And the industry can look no further than another industry that’s dealt with its own labor issues for the last several decades.

Streamlining the Hiring Process to Make it Fast, Simple and Cost-Effective

 In many ways, the construction and trucking industries are close cousins. They often hire from a labor pool with similar demographics. And revenue is often closely tied to the availability of talent. Without drivers, trucking companies don’t have a product. And data from the American Trucking Association suggests the industry is facing challenges similar to construction—projecting a shortage of drivers exceeding 100,000 by 2023.

These labor issues are creating serious consequences for the industry. Recruiting costs and employee turnover are skyrocketing, and many companies are turning to costly signing and retention bonuses to keep drivers.

But some companies are taking a different approach—turning to AI, automation, and mobile technology to make the hiring process fast and easy.

For example, in early 2020, one of the five largest OTR long-haul trucking companies in the United States implemented technology that shortened its application process, made it completely mobile, and automated the screening process to get qualified drivers through the interview and offer stage faster.

Rather than forcing candidates to fill out long paper or desktop-driven job applications, it made the application process completely mobile-first—allowing drivers to apply to jobs through text messaging. Virtual AI assistants would screen the candidates for basic qualifications in real-time, 24 hours a day and connect qualified people with hiring managers immediately—sometimes extending offers in hours.

The trucking company has experienced these results:

  • An increase in applications from qualified talent, with one-third of them coming in after normal business hours;
  • An increase in hires and decrease in employee turnover;
  • Less reliance on signing bonuses as incentives to apply; and
  • Millions of dollars saved in inefficient recruiting expenses.
How AI and Automation Can Ease Hiring Woes for Construction Employers

So, how does this translate to the construction industry? Let’s start with a few truisms about recruiting skilled trades workers.

  • Speed matters. Research suggests that the first employer to respond and make a competitive offer usually wins.
  • Mobile is a differentiator. Increasingly, we’re all being programmed to do everything on our phones—and that includes applying to jobs. Employers that offer a simple, easy, fast way to express interest are at a significant competitive advantage.
  • Automation can be an ROI machine. One of the major impacts to hiring in extremely competitive labor markets is growing recruiting costs, including more advertising, higher signing bonuses and skyrocketing labor costs. Automation not only saves top-line operational costs, it creates differentiated experiences that candidates love. And that matters.

Now, none of this is to suggest that technology alone will solve the construction industry’s labor issues. Growing the pipeline of skilled trades talent can’t be ignored.

But in a world where these systemic challenges will continue to exist, finding a competitive advantage that helps companies stand out is critical to avoiding lost revenue, higher recruiting costs, and threats to the overall health of the business.

And in that world, companies are proving that embracing advanced technology not only eliminates administrative headaches, it enables the business to stand out from the mob fighting for an increasingly sparse talent pool.

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