leading hr trends in the construction sector

The global pandemic that started in 2020 undoubtedly made an impact on nearly every industry, and the construction sector is no exception. In fact, due to the very nature of construction work – hands-on, in-person job duties – the idea of social distancing in the workplace or even remote work options are quite limited. On top of that, many construction projects were deemed non-essential, which put a halt to any further work.

These factors led to a drop in GDP of over $60 billion in the construction sector and the loss of more than 6.5 million jobs. Practically overnight, construction companies had to rethink the way of work and make tough decisions just to keep their business going. Fortunately for the construction industry, Q1 2020 was its strongest growth quarter since 2008. This strong start to 2020 was enough to help many businesses through the worst phase of COVID-19.

Best of all, early indicators show that the construction industry is starting to bounce back nicely. 

outlook for the construction industry

The outlook for the construction industry looks bright. Global forecasts predict the industry will see a growth rate of 5.2% in 2021. This rate of growth will not only return the industry to its pre-pandemic levels, but it also will push it 2.5% higher than 2019 levels. While this certainly shows good news for construction companies, GlobalData shows that these rates are still estimated to be $1.1 trillion lower than what they would have been without the disruption of COVID-19.

Further good news indicates that growth in the construction industry isn’t expected to end any time soon. Instead, the CAGR (Compound Annual Growth Rate) is predicted to rise at a rate of 7% by 2025, bringing the global market value to over $16.6 trillion.

With this level of predicted growth, the demand for skilled workers in the construction industry will also rise. It’s vital for construction businesses to take steps now to prepare for the labor demands in the upcoming years.

top in-demand construction jobs

There are countless jobs in the construction industry, but some of the most in-demand positions include:

• construction laborers
• electricians
• construction managers
• civil engineers
• plumbers
• roofers
• carpenters
• equipment operators
• brick and stonemasons
• steelworkers

leading HR trends in the construction industry

Even before the pandemic hit, the construction industry was struggling with a significant labor shortage. In fact, in April 2019, there were over 400,000 vacant construction job openings in the United States and 27,000 construction vacancies in the UK. Now, with growth in the construction industry predicted to continue well into the future, HR leaders must take steps immediately to prepare for this increased demand.

To improve hiring outcomes across the board, hiring managers must start by understanding the leading HR trends in the construction industry.

shift in workers’ expectations

COVID-19 didn’t only impact the economy and the construction industry. It also affected the personal lives of workers across the globe. With little to no notice, workers were forced to find ways to handle homeschooling, take care of aging parents and deal with work and financial disruptions, all while trying to protect themselves and their families from a global pandemic.

These workers aren’t just going to forget these stressors or how the pandemic impacted their personal lives. Instead, the effects of the pandemic have significantly shifted workers’ expectations. According to our 2021 Employer Brand Research study, workers’ number one driver when looking for a new job is competitive compensation (69%), but salary isn’t the only important factor. Today’s workers also want:

• healthy work-life balance (66%)

It seems only natural that employees want a healthy work-life balance after dealing with a global pandemic for over a year. Flexible scheduling options are one of the best ways for employees to maintain this healthy balance. While this step can seem nearly impossible in an industry that relies on hands-on, onsite work. Employers in the construction industry can consider strategies, such as remote work options for off site workers, compressed or staggered work schedules and part-time job opportunities.

• job security (61%)

According to the World Economic Forum, 114 million workers lost their jobs in 2020 due to the effects of COVID-19. This statistic doesn’t even take into account the number of workers who saw their work hours slashed or those who had to deal with multiple shutdowns during the pandemic. It makes sense that more than 60% of today’s workers value job security. It’s important for employers to be transparent about the outlook for the industry and the company as a whole.

• pleasant work environment (58%)

In the construction industry, employees are often required to work more than the standard 35 to 40-hour workweek to finish jobs and meet deadlines. So, it should come as no surprise that these workers are seeking good working conditions. In pre-pandemic times, this type of job setting often focused on safety, training and having the right tools and equipment to get the job done. Today’s employees, however, are also looking for increased safety protocols as well as COVID-related safety measures, such as personal protective equipment, social distancing options, and handwashing stations.

growing skills gap

While the growth outlook for the construction industry appears strong in the post-pandemic economy, one major challenge remains – the ability to hire and retain skilled workers. The truth is that this problem began well before the pandemic hit. In fact, a study conducted by the Associated General Contractors of America in 2019 reveals that about 90% of construction employers are having a hard time finding the skilled workers they need to fill open positions.

This problem only intensified after the pandemic and is proving to be quite costly. In the UK, the Open University Business Barometer reports that businesses will collectively spend more than £6.6 billion trying to fill in the skills gap. There are several factors spurring this skills gap problem, including:

• aging workforce

There’s no doubt about it – the global workforce is getting older. In fact, a recent AARP Aging Readiness Competitiveness (ARC) report reveals that over the next generation the number of workers aged 60 and over will double in 12 primary markets, including France, UK, USA, Brazil, China, Germany and Japan. Unfortunately, this means that employers must brace themselves for a continuous string of workers preparing for retirement.

Companies can take action now by using targeted strategies, such as upskilling and reskilling to retain these aging workers as long as possible. Employers should also consider implementing plans, including mentorships and apprenticeships, to give these workers the ability to transfer their skills and vast experience to the next generation of workers.

• increase in digital technology

AI, automation and digital technology have made significant advancements in the construction industry. In an effort to create a more agile workplace after the pandemic, many construction companies have decided to ramp up their investment in this type of technology. While tools, such as drones, 3D modeling and driverless vehicles, can bring greater efficiencies to the workplace, they also require skilled workers who can operate and maintain this equipment.

Employers can improve their hiring outcomes by conducting a comprehensive skills assessment to determine exactly what types of digital skills it needs now and in the future. This information, in turn, can help employers update job descriptions and perhaps even create new job roles within the company to pave the way for this new technology.

• shifts in industry demands

Recent shifts in industry demand are changing the way of work for some construction employers. For example, the increased demand for prefab and modular housing is creating new, indoor work environments for construction workers. While the skills needed on the job remain very similar, these employers can leverage the benefits of these new work environments to attract skilled workers.

Other shifts, such as the push for green technology, are forcing construction employers to seek new hires with different skills sets. In fact, studies show that 51% of construction companies in the UK are involved in at least one green project. Employers may need to hire LEED-certified (Leadership in Energy and Environmental Design) candidates to meet this growing demand.

prioritization of employee training

According to our 2021 Employer Brand Research report, 58% of employees around the globe consider good training an important factor when looking for new job opportunities. The good news is that the right employee training program can also help businesses in the construction industry fill in the skills gap. By equipping their current workforce with the skills necessary for the future of work, construction companies can remain competitive in the years to come.

There are several types of training programs employers can invest in, such as:

• upskilling

Construction giants Vinci and Skanka have both announced their commitment to employee training. The goal of this type of training is to promote long-term employability and prepare the company for future challenges. Not only can this type of training help construction employers shrink the skills gap, but it can also improve retention rates, job satisfaction and workplace morale.

The most important step in creating an upskilling program is to develop clear goals and processes. Start by determining which skills are most in-demand for the company, as well as which of these skills are most appropriate for upskilling. Once you know what types of training programs the company wants to offer, make sure that your employees clearly understand the benefits of upskilling and how the process works.

• reskilling

For years, there has been a lot of talk about how automation is taking over jobs and could displace millions of workers around the globe. While there’s no denying that automation and digital technology are capable of handling a wide variety of workplace tasks, some experts believe that these soon-to-be-obsolete jobs can be converted to new roles with the right training. Unlike upskilling that focuses on teaching employees new skills to improve their performance, reskilling involves training employees on new skills so they can perform a different job. 

Recent research predicts that the demand for physical and manual skills needed to perform repetitive tasks is expected to decline by 30% in both Europe and the United States job markets over the next 10 years, whereas the need for technical skills is anticipated to rise by 50%.  Employers will either need to hire candidates with these necessary skills or invest in reskilling programs to prepare their current workers to fill these emerging roles. 

• cross-training

Another way construction companies can mitigate the skills shortage is to invest in cross-training opportunities. This step requires employees to reexamine job duties both on and offsite to identify potential vulnerabilities that cross-training can help tackle. The goal of cross-training is to identify business-critical tasks and ensure multiple employees are equipped with the tools and skills needed to handle these duties.

Cross-training can also enable employers to provide greater flexibility with scheduling. For example, having multiple employees onsite who can handle core tasks can allow employers to offer staggered work schedules, part-time hours and more paid time off.

highly competitive job market

As might be expected, the growing labor shortage has created a highly competitive job market. Employers can no longer rely on standard hiring practices, such as simple job postings, to attract and hire qualified candidates. Instead, employers must develop strategic hiring practices if they hope to attract and recruit top talent. Here are some tips to help employers remain competitive in today’s demanding job market.

• competitive compensation package

According to our Employer Brand Research, competitive salaries are the most important driver for employees when looking for a new job. The problem is that salaries have shifted since the onset of the pandemic. It’s important for employers to use industry research to identify the optimal salary package for their specific industry. Alternatively, Randstad can provide invaluable insights and data to help your company determine the right salary range for each position.

• stronger employer brand

If you think that a company’s reputation as an employer or bad online reviews won’t impact its hiring abilities — think again. Studies show that a bad employer reputation can cost a company as much as 10% more per hire. In a time when companies are doing all they can to reduce costs across the board, it’s more important now, than perhaps ever before, to focus on building a strong employer brand. Start by better understanding your target candidates’ needs and expectations, and find ways to differentiate your company from the competition.

• workforce management partner

With today’s highly competitive job market, partnering with a recruitment and workforce management company cannot only improve hiring outcomes, but also can help alleviate some of the stress related to managing a large workforce. For example, when you partner with Randstad, you can immediately tap into our large, well-vetted pool of high-quality candidates. Additionally, you will work with a dedicated team of hiring specialists who can ensure your company is not just filling open positions, but that you’re hiring the right candidates for the right jobs.

advancement of HR technology

The combination of the growing skills gap, looming labor shortage, and the competitive job market is forcing employers around the globe to develop more effective recruitment practices. Innovative HR technology is not just helping companies achieve better hiring results, it’s also enabling them to save both time and money. There are several ways that HR technology is helping businesses improve processes, including:

• recruitment technology

Studies show that the cost to hire and train just one employee can reach as high as 21% of the existing employee’s salary.. IIn an era where costs for construction materials, including lumber, steel and copper, is at an all-time high, employers simply can’t afford to waste money on bad hiring decisions. Recruitment technology, such as ATS (Application Tracking System), pre-hire assessments, and automatic reference checks can streamline the recruitment process and improve hiring outcomes.  

• workforce analytics

HR technology not only helps with the recruitment process, but it can provide invaluable analytical data to enable your company to better forecast its staffing needs. It can assist with everything from identifying the need for new positions within the company to predicting the level of staff needed both now and in the future. This allows companies to better plan their recruitment efforts to ensure they have the right team members in place when they need them.  

• workforce planning

One of the top benefits of workforce planning is using technology to handle the workforce scheduling process quickly and efficiently. These tools are especially important for construction employers who want to offer some type of flexible scheduling options because it gives managers a real-time view of employees’ schedules right from the job site. This type of technology is also ideal for time tracking between projects and construction sites.

The first step to developing a recruitment strategy for the future is to understand the latest HR trends in the industry. Take a minute to download our summary of these HR trends in the construction industry, so you can keep them on hand for quick reference as you navigate the uncertainties of a post-pandemic market.