The Shrinking Workforce: And What To Do About It

The Lingering Labor Shortage

As the United States rapidly approaches full employment, the battle for talent across industries intensifies. Last year, The Conference Board forecasted that in “the next 10 to 15 years, we expect U.S. employers to demand more labor than will be available.” Though the skilled trades industries have been suffering the effects of a labor shortage for the past six years, the looming labor crisis is no longer confined to the industrial pocket of the economy. According to the Labor Shortages Index, occupational therapy, mathematical science occupations, health diagnosing and treating practitioners, and rail transportation workers are rarer than construction workers. Construction companies are no longer competing for employees with other construction companies- the battlefield for talent is now cross-industry and global.

Dealing with the Skills Gap

The best way to combat the skilled labor shortage is to develop skills within the current construction workforce. According to data from the APQC’s Open Standards Benchmarking Collaborative Research Effort, there is strong evidence to suggest that organizations that invest in more training days and dollars per employee produce greater revenue per employee than those that invest less in human capital. 1

Training and development will be a focus as the labor issue persists. Some predict that the war for talent will require companies to hire outside of the traditional employee scope. While hiring an employee who lacks the skills or experience desired may seem like a scary alternative, the opportunity to develop employees not only creates loyalty between a worker and the company, but also ensures that new-hires are highly-aware of the company’s processes and procedures. Instead of seeking a specific skill set, recruit for certain attributes- ambition, positive attitude, and willingness to learn. While this solution requires patience, it builds a sustainable and diverse workforce.

We recommend the following approach to transition to a culture of growth and development:

1.Understand employee career goals

Craft employee development plans to discuss interests and strategize how to achieve short & long-term goals. Create measurable objectives and a time span to ensure the employee has a tactical road map. By demonstrating a genuine interest in employees’ future and offering support, you will earn loyalty and have a better understanding of how this person can contribute to long-term organizational strategy.

2. Offer opportunity outside of strict job descriptions

Allowing employees to take on responsibility outside of their typical day-to-day operations will give them exposure to more areas of the business. Not only will cross-training create an exciting opportunity for on-the-job learning, but it will help them better communicate with employees from different departments.

3. Set aside resources

Investing in employees yields tangible returns. Many companies are beginning to provide scholarships, educational stipends, and student loan repayment programs to encourage continual learning for employees. These investments can be minimal at first and grow with the length of employment, encouraging long-term commitment.

4. Foster a culture of learning

Employees will take cues from upper leadership. Ensure that upper management is setting an example and pursuing continual education. In addition, empower employees to apply new skills. Create an open-minded culture that allows for exploration and learning from mistakes.
What steps is your company taking to manage the labor shortage?

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