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June 23, 2022
Why Workforce Planning is More Important than Ever in Construction
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Why Workforce Planning is More Important than Ever in Construction

It used to be that contractors could just focus on their own employees when doing workforce planning. However, with the nature of work changing even in construction, some experts say workforce planning needs to go much deeper. Today, forward-thinking managers see external workers just as crucial to their success as those on their own payroll, and so they have started including them in their workforce planning.

Below are some insights that are especially relevant to construction. 

The new normal and the old normal

In 2020, companies reported that 44% of the people they rely on are not their employees. A more recent survey from 2021 found that 87% of executive respondents factor in external workers when planning their workforce mix. 

Construction contractors are used to relying on external workers. General contractors rely on subcontractor labor, while subcontractors rely on both GC labor and other specialty labor. Every contractor on a project relies to some degree on vendor workers, government workers, and owner workers. Few contractors have direct control over all the labor on their project. Still, they depend on them to carry out their roles on time and at the right quality. That’s a lot of trust to spread around, especially at the GC level.

Specialty contractors typically handle more than half the work. Year after year, U.S. Census data shows 63% of all contractors are specialty trade contractors. They manage about 62% of all construction labor. GCs have a big stake in the quality and quantity of specialty contractor workers as they try to make projects stick to schedules and budgets. 

A bigger picture emerges

The other aspect of the labor force that’s making workforce planning extremely important is the fluidity of today’s workforce. For decades, people found employment in construction, only to stay a short while. Construction’s reputation did not spawn career thoughts. Now, recent changes across the workforces of other industries mirror this trend. Worker loyalty to employers is not what it used to be. 

Construction has also faced workforce headwinds because of its seasonal and market cycle challenges. Contractors let people go as the work slowed and then went on hiring sprees when the work returned. Meanwhile, workers adapted—they got used to working only when needed, moved on to other industries, or dropped out of the workforce altogether to sell their services as craftspeople.

Today, that dynamic is changing even more. People are rethinking the work they’ve always done and looking for work they really want to do. Technology is reshaping entire industries, construction included. As construction adopts more tech to overcome productivity woes and ease its long-term workforce issues, people who leave are less likely to come back. Those that do often need a lot more training to get up to speed. 

A broader workforce plan

These factors suggest that construction might benefit from a reimagined form of workforce planning. Not only might it shift the focus on keeping people even through market cycles, but planning would include all the workers that partners employ on the projects.

Managing a construction project is indeed complex enough without having to add considerations about other contractors’ labor. But construction already has historical and contractual experience at managing complex workforces, so the groundwork exists for transitioning to a more holistic form of workforce management. To start, that will open up extra benefits to project schedule planning.

By including all potential types of workers in the resources of project planning software, contractors improve their options for dealing with surprises. Project schedule planning requires a complete assessment of workforce availability. However, without all potential workers included, it’s not complete. 

A different way of workforce planning

For example, temporary workers can fill in for absences, while laid-off subcontractor workers might fill out the sagging ranks of a GC. At the business level, a subcontractor employee interested in working for a GC in a project management position might be a good exchange for a GC employee more interested in leading a small crew. When you and your regular partners see your combined workforces as complementary and prioritize what’s best for the workers, considering the current work realities, you uncover hidden benefits. 

The long-term benefits of project planning and scheduling done with an eye on the total worker population become clear as you move from one project to the next. You and your partners see ways to improve the labor mix based on the strengths and weaknesses of the total workforce. You also set up new options for helping employees find the work that’s most meaningful to them. With a combined focus on training, people stay up on the latest materials and methods and the latest tech.

Construction’s workforce has always been a strange mix of temps, independent contractors, part-timers, full-timers, union members, family, friends, and the employees of other companies. Few industries operate with such a fragmented workforce while doing expensive, risky projects. Workforce planning taken to the holistic level might just be the next necessary step in the industry’s ongoing transformation.

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