The construction market is poised to take off in the next few years. That’s the good news. The bad news is that contractors might have more difficulty picking up new business if they don’t revise their recruitment and retention strategies.
It’s estimated that more than 450,000 construction hires will be needed in 2027. Hiring managers need reliable, up-to-date data to ensure their offers are competitive, without putting too much pressure on margins. SmartBrief sat down with Kit Dickinson, an industry executive in business development for ADP, to discuss how to get and use employment data. ADP provides HR, talent, time management, benefits and payroll services.
SmartBrief: How are labor shortages impacting construction businesses today?
Kit Dickinson: We’re seeing increased overtime and project delays, which put pressure on margins. Companies also aren’t able to bid on as much work. But labor shortages aren’t driven only by hiring challenges and planned retirements. In a highly competitive market, retention is a concern.
ADP Research just published a report. It found that construction workers who left for another company saw a 12.9% pay increase. It was the largest of any industry in June, and it just adds another strain. Increasingly, workers leave suddenly, which can derail projects.
SB: What are the most successful contractors doing to stay ahead?
KD: They’re using workforce data to forecast their labor needs and help with hiring decisions. In today’s construction marketplace, you need to be hypervigilant in terms of what you offer for compensation.
ADP provides that workforce transparency. We have best-in-class workforce management tools to help not only identify the right workers, but also keep coveted workers. So, that’s how we’re really trying to help the industry at large.
For example, ADP has compensation benchmarking tools. What do I need to pay a welder in Albany, Ga., versus Atlanta, Ga., and everywhere in between? What are the benefits they’re expecting? It’s a robust, multivariable approach in terms of what someone gets paid and it varies widely from different parts of the country. It’s hard to get accurate data on this – especially for nonunion workers.
SB: Beyond salary considerations, what’s proving most effective in retaining skilled workers?
Some of the more successful contractors are really honing in on the benefits. Making sure that the benefits are tailored for the different demographics that they’re looking to attract.
For example, the younger workers – Generation Z – may prioritize mental health support, paid days of service, pet insurance – things like that. At the other end of the spectrum, your more senior workers want more traditional benefits around family medical, 401ks and relocation services.
Gen Z also is more likely to care about professional development, especially around technical training. At the job site today, it’s common to see drones and planning software based on AI and 3D imaging. Today’s worker wants to be trained on those. A positive workplace also is important. Increasingly, firms are using social media to tell their culture story.
If you try and do a one-size-fits-all, that’s not going to work in this hyper-competitive market. Tailoring benefits is key, but it requires strong benchmarks and analytical tools.
SB: This is great for retaining workers, but what about when you’re hiring?
Increasingly, construction firms use social media, employee testimonials and other channels to showcase their culture, values, community impact and career opportunities. Prospective employees want to understand the firm’s story, what it’s like to work there and whether its mission aligns with their own goals.
Attracting younger workers has always been important, but there’s greater urgency today as labor shortages persist across the industry. New recruitment strategies are needed. Hiring managers should be more forthcoming about career paths, training opportunities, benefits and company culture. Greater transparency can help candidates envision a long-term future and encourage them to join the organization.
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