By Josh Weiss
We didn’t need a pandemic to expose the construction industry’s potential vulnerabilities. Long before the pandemic, the industry was in the depths of an ongoing skilled labor shortage.
Consider the findings in the latest issue of The Civil Quarterly (TCQ) from Dodge Data & Analytics, which revealed nearly two-thirds (65%) of civil contractors say they face challenges to meet schedules because of the skilled worker shortage.
Unfortunately, the industry cannot ignore the issue, hoping it will somehow resolve itself. Unless the industry resolves the shortage or contractors find a way to operate while mitigating the consequences of the skilled labor shortage, the ramifications are potentially far-reaching for companies.
Contractors need to think about labor differently. Rather than focus on what they don’t have, contractors should focus on eliminating unneeded tasks. In addition to hunting for new talent, we need to grow the productivity of existing talent.
In both cases, technology can be impactful. It optimizes workflows so less time-intensive work — or rework — is needed, and it increases the capability of the existing workforce.
If there is a silver lining to the pandemic, it’s that it forced contractors to avail themselves of the benefits of technology. Companies needed to do more with less, so they re-evaluated their approach to the jobsite, and many turned to technology to make that possible.
Technology is not killing jobs; it’s skilling jobs.
Despite the headwinds, contractors maintain a positive outlook
The good news is the pace of work hasn’t slowed despite the pandemic. The bad news for many contractors is that their backlogs are continuing to increase.
The Dodge study revealed 40% of civil contractors reported increases to their backlogs. Last quarter, it was 25%.
According to the Dodge data, more than half of contractors (60%) say their need to hire skilled workers is high. Since the fourth quarter of 2020, this number has jumped an astounding 17 points; it will continue to rise.
But even 69% of those contractors with more moderate hiring needs anticipate a high degree of challenge to find workers. According to the Dodge data, that is up 11 points since the fourth quarter of 2020.
As an industry, we cannot afford to let these numbers continue to rise. However, based on recent trends and the current trajectory, the problem seemingly has no end in sight. More than eight in 10 civil contractors (81%) expect the cost of skilled workers will continue to increase, which would only further exacerbate the problem.
The clear implication is on the costs of projects. More than half of contractors (51%) say that they are currently challenged to stay within a project’s budget because of increased labor costs. Meanwhile, a similar number (49%) submit higher bids, escalating costs for larger projects.
On top of the skilled labor shortage, broader workforce trends such as “The Great Resignation” are also at play. According to various estimates, upwards of 40% of workers might soon leave their jobs across almost every industry, possibly further complicating the tight labor market.
Yet somehow, despite the seemingly insurmountable headwinds, contractors have a positive outlook, and two-thirds anticipate a robust market in the next 12 months.
It’s time for a new appreciation for technology
The proliferation of technology is by no means a new phenomenon for the civil construction industry. Even before the disruption, contractors were increasingly turning to technology.
During the pandemic, the adoption of technology such as drones saw an increase. But the technology that enables equipment tagging and utility detection saw the most widespread adoption during the first half of 2021 compared to last year.
These increases are noteworthy, but what is most interesting is the growth opportunities. The Dodge report revealed that fewer than 10% of contractors currently use virtual and augmented reality technology.
These solutions give any team member unparalleled real-time views of a project, helping them complete tasks ranging from applying ground markings to checking build progress against specifications.
The broad adoption of on-site technology positively affects productivity, and contractors regularly cite the increase as the top benefit. Considering that the skilled labor shortage is not likely to subside soon, contractors must increase their teams’ productivity to continue completing jobs on time and within budget to ensure they can maintain their profit margins.
The solution is to adopt technology and upskill workers
There are two clear answers to lessening the skilled worker shortage: Attract younger workers and upskill current workers. Both will complement the move toward technology.
The Dodge data revealed that nearly nine in 10 civil contractors (86%) recognize the need to attract more workers under 30-years-old.
The obvious benefit is that the next generation of workers has a different relationship with technology, and they are more easily able to adapt to and learn new solutions as they enter the jobsite. Almost two-thirds of civil contractors (63%) said younger talent has diverse skills, including adopting technology more quickly and collaborating digitally.
When it comes to upskilling teams, simplifying the adoption of technology across the current workforce is critical.
Companies need to stop looking at technology as something to fear and look at it for what it is: a professional partner that complements their teams and empowers them to achieve more. It can also give contractors a competitive advantage over those who are slow to adopt.
While it is a long-term investment, increasing a team’s collective skills will pay dividends for years to come and change an organizations’ mindset to be digital-first.
Many people have a common misunderstanding: they think about training as enabling an individual to use a new tool. This is wrong. Good technology should always be user-friendly and intuitive, just like a great app.
According to the Dodge data, to help upskill their teams, more than three in four (75%) contractors say community, leadership, and digital skills training coupled with site-specific safety issues is of moderate to high value for their on-site teams. Yet, only about a third (36%) have robust, ongoing training programs for new workers.
The training should focus on helping an organization adopting a new workflow — a better way of getting things done. Technology, in that case, is just an enabler.
Consider, for example, how business communication innovated and evolved with the introduction of email to replace sending letters. This faster and more inclusive communication gave businesses an edge, not the training on smart devices or cloud-based email software.
Technology is a long-term solution to a long-standing problem
No one denies that the modern jobsite is replete with potential snags, so it’s no surprise that contractors are often jumping from problem to problem. They spend much of their time finding solutions in real-time to problems as they arise.
On the one hand, it’s the nature of the environment. But on the other, it’s time to flip the script and see about getting one step ahead of the problems that will inevitably arise.
Rather than seek short-term solutions to long-standing problems, technology allows companies to look at projects differently and prepare for what comes next.
Often there is a readily attainable solution waiting to be adopted. The incumbency is on us to embrace it and use it, and when we do, we often find that it makes our lives easier.
The world is complex enough, but the jobsite does not need to be on the list of complexities, especially when we have an opportunity to streamline processes.
As the industry evolves in a post-pandemic world, we cannot afford to return to old habits. Technology is the latest evolution of the modern jobsite, and contractors should embrace its endless potential.
If they do, I am confident they will be better positioned for whatever challenges hit the jobsite next. And we know there will be unexpected challenges when we least expect them.
Josh Weiss Bio: As a member of the Hexagon Geosystem’s executive leadership team, Josh guides the company’s business and operating models in several industries. Under Josh’s leadership, the mining business successfully unified multiple acquisitions to become a recognized smart technology partner in integrated life-of-mine solutions. For the Heavy Construction portfolio, he has accelerated both customer adoption and value creation. Finally, in his role of Geosystems COO, Josh leads the digitisation of the operating model, delivering value to multiple industries and internal stakeholders alike.