Battling the Skilled Labor Shortage
A look at the role of using contract skilled labor to mitigate labor shortage challenges and reduce labor-related costs
No one needs to tell you there is a severe lack of available skilled craftsmen. In fact, a recent study by the National Association of Home Builders (NAHB), of which you may be an affiliate, reported that 82 percent of its members believe the cost and availability of labor are their biggest issues. Just seven years ago, 13 percent of that same group cited labor as their biggest challenge.
Obviously, as that challenge to find job-ready candidates escalates, so do expenditures related to attracting candidates to your business. There are expenses for job-board postings, print want ads, social media efforts, and referral or sign-on bonuses. Then there are costs associated with screening applicants, reference checking and interviewing. When combined with on-boarding costs related to background checks, skill assessments, drug testing, physical exams, company orientation, safety training, benefits and payroll/HR processing, the overall per-employee hiring cost can easily exceed $2,000. And, that does not even include carrying costs related to lost productivity initially realized with new employees until they are fully acclimated to the company and project at hand.
So, what are contractors doing to reduce recruitment-related costs and to increase project productivity? They are incorporating contract skilled craftsmen into their overall staffing strategy.
The Growing Role of Construction-Specific Staffing Services
As their need for skilled craftsmen grows beyond what their permanent skilled workforce can handle, more and more contractors are relying on partnerships with construction-specific staffing firms. Subsequent to the economic collapse in 2009, and still holding very true today in 2019, our business witnessed a major shift in the hiring practices of small to very large residential and commercial contractors. Whereas they previously relied primarily on their superintendents, foremen, project managers and other internal resources to bring on short- and long-term skilled employees, they’re now treating us as their primary recruiting source. They include our recruitment and staffing experts in their on-going project- specific labor planning sessions; they treat Tradesmen International essentially as an extension of their internal human resource departments. Doing so enables us to gain detailed, first-hand knowledge of our client’s project workforce requirements well in advance of the actual start date. This is key as it enables us to plan ahead, to reserve specific types and numbers of trades from our massive field-tested employee database, and to improve our client order fill-rate percentages with proven craftsmen who meet unique project labor specifications.
For contractors, reliance on contract labor only makes sense. Construction staffing services invest heavily in multiple recruitment advertising channels above and beyond what many construction businesses can realistically handle financially or even manage from a human resource department perspective. In addition, these services have numerous construction-experienced recruiters whose sole job it is to attract, screen, hire and retain proven craftsmen. In Tradesmen International’s case, we employ more than 200 full-time construction-experienced recruiters out of 178 locations across North America. Each recruiter, on average, conducts 20 face-to-face interviews with craft candidates weekly, hiring only those who meet strict hiring guidelines. As a result, Tradesmen and other staffing services have exceptionally large employee databases—extensive trade-specific pools of safety-minded, job-ready contract skilled labor—that can be tapped into to meet a builder’s local, regional and/or national workforce needs.
The Power of Technology
Here at Tradesmen International, for instance, we have more than 10,000 employees on commercial, industrial and residential jobsites right now. By using our proprietary employee tracking software, we know when these individuals will be coming off their current assignments and available for dispatch or mobilization to another client’s project. This technology—combined with our applicant tracking software that helps us manage and maintain constant contact with tens of thousands of other pre-screened craftsmen candidates in our various trade pipelines—gives us the power to meet client labor deadlines with craftsmen who more accurately meet the skill-set needs of the contractors we serve.
Today’s Skilled Contract Workers Provide Reliability, Safety and Productivity
Essentially, reputable construction staffing services are busting through the seams with growth as the labor deficit expands and construction businesses incur skyrocketing hiring costs and labor-costs related to workers’ compensation, unemployment, benefits and so on—all of which are covered by companies such as Tradesmen International. In addition, staffing businesses are growing because builders are recognizing that the quality of contract skilled labor has advanced substantially over the last decade or so.
It is also important to note that craft professionals themselves now recognize the heightened role staffing companies play in the industry and that they value employment opportunities with these organizations. “The stigma of contingent craft employees as being inferior has been stamped out,” says Matt McClone, Tradesmen International’s Vice President of Workforce Development. “Craftsmen recognize that credible staffing services have stringent hiring procedures that have effectively sharpened the overall quality and reputation of the nation’s contract employee. We don’t just hire anyone. Our continued leadership, and ultimately our company brand, is reliant on our ability to consistently serve contractors with safe, productive and highly skilled workers. And, at the same time, taking very good care of our valued employees.”