How residential contractors are overcoming the labor shortage

Industries across America are struggling to find workers due to the economic conditions brought on by the coronavirus pandemic. Even in normal circumstances, residential contractors are often looking to staff up.

According to the Association of General Contractors (AGC), 73% of firms report it will be more challenging to fill hourly positions. That's costing both time and money. Nearly half of the firms AGC surveyed indicated that labor shortages caused them to lengthen completion time for projects and increase project costs.

There are solutions, but beware of going for a quick fix over a sustainable one.

"Contractors are attempting a variety of alternatives"

Ken Simonson, Chief Economist at AGC of America, says contractors are reporting a difficulty in filling positions. "This has been a chronic problem over many years but has probably been aggravated in several ways by covid," he said.

"Contractors are attempting a variety of alternatives, such as more offsite manufacturing, more use of labor-saving equipment on the job site, more precise scheduling and coordination with suppliers and subcontractors," Simonson said.

Companies are implementing new processes to save time and money on the job site in order to make up for fewer workers. And now, as demand for residential construction is topping pre-pandemic needs, efficiency is more important than ever.

Demand for residential construction is soaring

Residential construction employment demand has been very strong, says Simonson, with employment topping the pre-pandemic peak set in February 2020 by 1.7% as of June 2021. That's a stark difference to the lackluster recovery of nonresidential construction, which continues to fall short by 6.2% of pre-pandemic levels.

People are ready to hire contractors again. The Bureau of Labor and Statistics data shows the change in year-to-date construction spending for the first five months of 2021 compared to same period in 2020. Residential spending soared 26%.

As demand increases, businesses innovate to keep up 

Employment and turnover issues in the contracting world have existed long before 2020, but Simonson says the pandemic has certainly made matters worse. "Some workers are unable or unwilling to return to work because they are ill or must care for someone who is ill or doesn't have daycare," he said. "They may also be unwilling to report to a job where they must be onsite and potentially exposed to the disease."

Another new factor includes the evolving landscape of office-free employment. More and more companies are offering work from home opportunities and flexible hours, perks that would be impossible to replicate on the job site.

The obvious short-term solution is to hire more workers at a premium. If the business can afford it, the problem is solved, for now. But many small businesses operate on razor-thin margins and can't feasibly hire more workers. That is why businesses are looking to implement labor-saving tools on the job site.

The sustainable long-term solution involves digitizing your workflow, implementing consistent and scalable processes, and empowering your existing employees to perform multiple roles within the company, including drawing site plans and doing estimates.

ArcSite optimizes workflow, empowers employees

Buying labor-saving equipment involves investing in better tools, like upgrading from a hammer to a nail gun. It can also mean implementing a digital estimation tool like ArcSite, which allows businesses to cross-train employees to conduct estimates, close sales, and coordinate with other team members.

With ArcSite, businesses have a scalable tool that is easy to learn. Estimates are smoother and more professional, making it easier to close deals. The scalable sketch-to-revenue solution helps contractors secure more business while saving time on the job and after-hours doing excessive paperwork.

Contractors have their fair share of challenges. Most customers shop around prior to selecting a contractor. In fact, only one in ten hire the first contractor to bid on their job. The other 90% of customers are soliciting multiple bids for a project. Cost is the most likely reason for this, although professionalism, positive reviews and testimonials, and quality of work are other factors. Instead of racing to the bottom to offer the lowest quote, businesses are innovating their sales-to-receipt process with ArcSite.

The industry is evolving. Evolve with it using ArcSite. Schedule a demo today to see if ArcSite is right for your growing business.