Reversing the Negative Cycle of Staffing Shortages

The technology landscape continues to change rapidly, making it more important than ever for contractors to stay in the know to successfully thrive and compete. Today, multiple disruptive forces are converging, quickly escalating the risk of conducting “business as usual.” Here are three significant trends:

Staffing Shortages

The battle for talent is raging. According to the 2017 FMI Construction Industry Survey, 89 percent of companies in the construction vertical are experiencing staffing shortages. The study states, “Recruiting talent has long been a challenge for the construction industry, and it will only become more severe in the future—across a broad range of industry sectors.”

Under-Performing Productivity

In addition to staffing shortages, construction productivity gains are almost non-existent. A McKinsey Research article, “Reinventing Construction: A Route to Higher Productivity,” says “Productivity improvements in construction are long overdue. Even while other sectors from retail to manufacturing have transformed their efficiency, boosted their productivity, and embraced the digital age, construction appears to be stuck in a time warp. In the United States since 1945, productivity in manufacturing, retail, and agriculture has grown by as much as 1,500 percent; productivity in construction has barely increased at all.”

Rising Cost of Human Resources

As in any supply and demand situation, staffing shortages will drive up your costs to attract and retain talent. The picture looks even more discouraging according to “Millennials in Construction: Learning to Engage a New Workforce,” a 2015 FMI Construction Industry Survey. The article states, “For years, thought leaders have been talking about how millennials are just out for a purpose crusade and how they are more interested in meaning than they are in money … When asked what’s most important to them, millennials rank competitive pay the highest.”

Disruptive Forces Drive a Vicious Cycle

With competition for talent heating up, spending on human resources, recruiting, and training will increase. To attract and retain talent, firms will need to offer more competitive compensation packages. As a result, you’ll need to improve operating margins and to do this, you’ll need to improve productivity, because in today’s competitive marketplace, you cannot pass these cost increases on to clients.

Change Your Status Quo

Disruptive forces are driving a vicious cycle of staffing shortages, rising human resource costs, and rising compensation costs—all resulting in stagnant productivity and lower profits. Firms can’t stand idly by—now is the time to leverage technology to reverse this negative cycle by streamlining operational processes for greater productivity and profitability.

Alan Littman is chief of marketing & sales at Agile Frameworks, which provides the only industry solution that fully integrates corporate, field, and lab information management activities in one platform across multiple engineering and construction disciplines.