According to a 2019 survey by USG and the U.S. Chamber of Commerce, 94 percent of contractors report moderate-to-high levels of difficulty in finding skilled workers.
This labor shortage means contractors struggle to meet project schedules, win projects, and take on additional work. As USG’s survey revealed, these consequences have intensified or remained consistent over the past year.
A respondent in the USG survey distilled these concerns down to the core issue at play, saying, “My single most important concern about my business in the next 12 months is being able to bid jobs competitively and still turn a profit, while paying much higher labor costs.”
These staffing challenges are happening at a time when there’s more opportunity.
The construction industry is booming. Data from the Bureau of Labor Statistics shows the construction industry is the only goods-producing industry among the top 20 in job gains. Their projections show this trend will continue into 2026.
Contractors are in a position to improve productivity now, at the beginning of the boom. With the right tools and resources, contractors have the opportunity to triple their crew’s productivity.
Technology is an important and crucial factor for construction firms. Research from McKinsey shows the industry has made significant strides, specifically with the industry-wide technology investment of $10 billion. McKinsey focused on three key technology use clusters : on-site execution (“field”), digital collaboration (“team”), and back-office and adjacencies (“office”). New technologies require that firms have the right processes and protocols in place. This helps firms maximize profitability while minimizing cost.
Software can help even out the highs and lows. With end-to-solutions, such as QuickBooks® Enterprise, construction firms can work to minimize feast and famine cycles, and stabilize cash flow by expertly tracking job costs.
With field service management software, managers can put their workers in the best position to succeed by optimizing schedules and tracking the progress of projects in real-time, helping contractors gain a competitive edge and grow their business. Intuitive software solutions can give competitive construction firms the ability to grow in the face of these industry-wide challenges.
Construction firms depend on their crews to grow, so hiring the right team is the first step to increasing productivity. According to the Associated General Contractors of America and Sage Construction and Real Estate, 79 percent of construction firms are looking to expand their headcount. What’s not obvious is how these contractors plan to deal with the current labor shortage. Forget about finding A players, most companies are simply looking for qualified workers to fill their seats.
What if you could attract and retain A Players?
With the right technology, you can attract the employees you need to boost productivity and performance. Let’s take a look at the tools and technology you need to hire A Players and boost productivity at your firm.
Topgrading is a proven hiring and interviewing methodology created by Bradford Smart that’s designed to identify A Player candidates . A Players are the top 10 percent of talent available for any job or role. They have the greatest potential for high performance in their role. B and C Players may require more training and expense to be successful in their specific roles.
Here’s why Topgrading matters to construction firms.
Price’s law is a more precise variant of the 80/20 rule. It states that 50 percent of the work done in your company is done by the square root of the total number of people in your company. If a construction crew has 25 employees, five of them do 50 percent of the work.
Topgrading provides you with a systematic process you can use to attract, identify, and retain these all-star employees. This is crucial because, as Dr. Smart explains, one characteristic of the A Player is their association with other A Players. So, a team of A Players is more likely to attract and retain other A Players.
If you’re already using sites such as LinkedIn, Indeed, or Monster to advertise and recruit A Player candidates, you’ll want to segment your pool of candidates. Divide candidates into two groups: A Players and A Player potentials. A Players are candidates you can hire immediately, A Player potentials are independent contractors who are given a chance to prove their worth.
Research studies by personnel psychologists, George Dreher and Ronald Ash, found businesses overwhelmingly prefer to use an unstructured interview process.
This common, unstructured interview process produced a 60 to 90 percent mis-hire rate.
These employees struggled to perform at adequate levels. As a result, the average loss to businesses was six to 27 times base salary. Reducing mis-hires is a straightforward way to increase productivity and profits.
The more A Players you have, the more revenue you have available for salary increases (boosting retention rates), while simultaneously decreasing direct labor and project costs.
Research by Catherine Buhe et al. shows that uncertainty is an inherent part of every construction project, due to the nature of the business. Factors outside of management’s control can influence the process and put teams behind schedule. Because of this, risk is an ever-present part of your project.
This uncertainty frequently produces cost overruns, major delays, and inconsistent project results. Poorly managed projects lead to communication breakdowns, leaving executives, site managers, and foremen consistently out of the loop on the projects they manage. Without the right tools and systems, teams are unprepared and ill-equipped to handle the slew of changes they experience on a routine basis.
David Arditi, a professor from the Illinois Institute of Technology, found that an emphasis on improving internal processes produces consistent productivity gains. Thus, construction firms should work to optimize processes such as:
While each of these areas are difficult to tackle on their own, business management software such as QuickBooks® Enterprise for contractors makes these improvements easier to accomplish. A survey of 3,000 construction firms found that construction workflows’ most dependent spreadsheets are estimating (70 percent), accounting (59 percent), and project management (46 percent).
This consumes a significant amount of revenue and time at all levels of the organization. The right software supports your team and caters to three specific audiences:
These solutions offer stakeholders the clarity they need to adapt to the fast-paced work environment and the inevitable uncertainty they face.
Good asset management provides you with real-time equipment, inventory, and people tracking. That’s important because the average construction crew wastes billable time searching for:
A Trimble report found workers lose 45 to 90 min per day searching for the equipment, tools, and data they need.
Let’s use a hypothetical scenario to analyze the cost. If you have 25 employees spending an average of 90 minutes per day looking for any of the above items, that’s 25 * 1.5 hours/day = 37.5 man-hours/day.
This translates to 187.5 man-hours/week and 9,000 man-hours per year. Let’s say the average labor rate for your construction company is $45 per hour. This translates to $405,000 in lost revenue/profit. The loss of revenue is higher, as this estimate doesn’t include revenue lost due to equipment re-purchasing, theft, and unnecessary equipment rental or damage.
With Intuit Field Service Management, construction firms can get real-time updates on their equipment, projects, and people at the click of a mouse. This enables construction firms to:
With the ability to monitor the status of what your team is working on in real time, you can allocate resources optimally, reduce waste, and protect your bottom line.
The construction industry is growing, but firms may not have the people and systems in place to meet the growing demand. Hiring, project, and asset management solutions give construction firms the ability to generate sustainable growth in the face of industry challenges.
From initial estimates to the final work order, QuickBooks Enterprise offers an end-to-end solution for growing construction firms. With the ability to get real-time updates from field workers, you can put your team in the best position to succeed. More engaged workers means better retention rates and high-level performance on firm projects. And, with a bird’s-eye view of your projects via job cost tracking and customizable reporting, you’ll have the data and analysis at your fingertips to grow and succeed.
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