Attracting and retaining talent in the construction industry

By Deena Harvanek ,

US Change and Communications Solutions Leader, Mercer

26/10/2023 · 6 minute read

A shortage of skilled construction workers means that companies are finding it harder to fill positions and benefit from the growing demand for construction projects in the US. The 2021 passage of the bipartisan infrastructure deal — the Infrastructure Investment and Jobs Act — magnified the issue.

This Act allocates US$1.2 trillion for work on infrastructure, including roads and bridges, broadband, drinking water resources, and airports — yet, the ongoing labour shortage means workers and companies could be missing out on opportunities.

According to the Associated Builders and Contractors, the construction industry in the US averaged more than 391,000 job openings per month in 2022. These positions spanned all skill levels — from construction flaggers to engineers — and came with different expectations and challenges. At the same time, a lack of qualified candidates, an ageing workforce, and changing demographics contributed further to the labour shortage.

Several macroeconomic factors, including high interest rates and rising material costs, are putting additional pressure on construction businesses. Previously, companies might have been able to rely on competitive pay to recruit and retain talent. But given today’s situation, companies may need to look at alternatives to support staff recruitment and retention strategies.

Strategies to boost staff retention

1. Supporting mental health

Long hours, job uncertainty, tight deadlines, financial pressures, and working away from home can impact a construction worker’s wellbeing. For example, in the historically male-dominated construction industry, data show that males are three times more likely than average to take their own lives.

Steps companies can take include:

Seeking to reduce any barriers to workers discussing and obtaining help for mental health and wellbeing.
Considering employees’ lives outside of work. Look at ways to enhance workers’ physical, financial, emotional, and social wellbeing.
Providing access to digital tools and resources anytime, anywhere to enable employees and their families to find support when needed.
Creating a culture of empathy. This may require additional training and tools to support leaders and managers in fostering the culture at job sites and within teams.

2. Accommodating an ageing population

An ageing workforce is a factor in the continued labour shortage. According to the US Department of Labour, between 2003 and 2020, the percentage of construction workers aged 55 and over nearly doubled within the country, from 11.5% to 22.7%. In part, this increase reflects the ageing population, but construction workers tend to retire at earlier ages because of the cumulative physical demands. As construction workers retire, there is a greater need for more talent to backfill positions.

Steps companies can take include:

Making health and safety a priority. Construction is a physically demanding field and as the age of the workforce increases, so too does the risk of on-the-job accidents. To counter this, employers can emphasize preventive care and promote regular checkups and healthy living opportunities. This could include dedicated time off, on-site preventive care clinics, healthy lunch options, and on-the-job sunscreen.
Aiming to delay retirements by incentivizing workers to work in less physically demanding positions.
Capturing employee expertise and documenting their insights to facilitate knowledge transfer to newer workers.

3. Maximizing the talent you have

To excel in today’s market, organizations must be deliberate in analyzing the roles required by the business and filling these positions internally whenever possible.

Not only will this help to keep the business lean and agile – without simply adding to the headcount and payroll – this approach will also show employees they have routes to advance, helping to improve retention rates.

Many organizations need help with mobilizing their workforce and using the skills and capabilities of the people they have more effectively.

Steps companies can take include:

Optimizing the workforce through strategic planning and skills building.
Integrating a strong mobility program to compare compensation and cost of living differences. A mobility management platform can help to integrate all stakeholders in the mobility process, including HR, managers, employees, and families.

Attracting and retaining talent in today’s competitive market is a major challenge for the construction industry globally. A better understanding of what employees want and need will enable organizations to take action to overcome the labour shortage, and better position them to build workforces fit for today and tomorrow.

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