Due to a labor shortage in the construction industry, some contractors are being forced to hire inexperienced workers just to keep up with project demand. This issue may create significant safety concerns on the job site, says Charlie Salazar, CLCS, area vice president at Gallagher.
“These workers do not have the same level of training and experience as more seasoned workers,” Salazar says. “They may try to cut corners, resulting in more injuries and claims. Job site accidents may force contractors to delay or stop construction until an investigation is complete. This project delay, and its associated costs, hurts the bottom line of everyone involved, from the general contractor and the subs, to potentially the project owner.”
Smart Business spoke with Salazar about how some have responded to construction labor shortages and increased safety risk.
Why are labor shortages such a problem for the construction industry today?
The Great Recession started this shift. According to Tradesmen International, the industry lost 2.3 million skilled workers during the recession (2006-2011) — many of whom were qualified veterans nearing retirement age. Skilled workers who were unable to find jobs dropped out of the industry, and many have never returned.
Societal and population changes have also contributed. Many millennials no longer consider construction as a viable career option. Vocational and training schools that were once prevalent have become nearly extinct, and parents increasingly steer their children to traditional four-year colleges and white-collar careers.
In addition, natural disasters have contributed to worker migration. For example, regions hit by hurricanes need more workers as the projects are long term, thus creating a need for workers there and shortages elsewhere.
How are some contractors and construction firms finding qualified talent?
The short-term solution that many contractors are using is offering increased wages, bonuses, overtime opportunities and retention rewards. AGC of America states that average hourly earnings in the industry climbed to $29.24, a rise of 3 percent from a year earlier. The construction industry pays 9.8 percent more per hour than the average private-sector job in the U.S.
The long-term solution will require education, training and changing the perception of the industry to re-engage at the student level, with more vocational-technical schools, construction industry trade education or unique programs sponsored by businesses. The school-to-work programs that helped build the construction industry must be overhauled to engage the same skilled workers the industry had before the recession.
What strategies can companies employ to keep safety a priority, even with more turnover and fewer people? How is this different from what they’ve done in the past?
The use of technology and artificial intelligence is one strategy that many contractors are finding effective.
Drones equipped with 3-D mapping capabilities can fly above construction sites, creating highly accurate models of work-in-progress and relaying photographs and other data to site managers to monitor progress. Before drones, this used to involve several workers manually mapping everything out over the course of several hours. Now, the same job can be accomplished in minutes. Artificial intelligence can help to monitor many exposures, such as the location of workers and equipment, allowing a supervisor to monitor every job site more efficiently.
What else should the construction industry understand with regards to these risks?
The labor shortage is not ending any time soon. It is imperative to have a strong risk management program and create a safety culture to manage the risks that come with labor shortages.
Make certain that your safety manual, toolbox talks, safety rules, best practices and trainings are up to date and effective. Make sure you have a broker who has a service team that is familiar with the industry. They should provide guidance and expertise to help you develop and continually enhance your risk management program.
Insights Insurance/Risk Management is brought to you by Gallagher
