Hot Topics in Construction and Surety Risk Management
Construction accounting and legal expertise—insights from construction CPAs and attorneys serving on the NASBP Advisory Councils.
NASBP is pleased to showcase, for the benefit of readers of Surety Bond Quarterly, the expertise of some of the outstanding construction CPAs and attorneys who serve on the NASBP CPA Advisory Council, www.nasbp.org/cpaadvisorycouncil/home, and the NASBP Attorney Advisory Council, https://www.nasbp.org/aac/home. Each has responded to a question of interest.
Question: The Labor Shortage: Why Should Your Strategy Consider the Role of Company Culture?
Answer: The persistent and intensifying labor shortage is the most significant trend in the construction industry today. According to the Associated Builders and Contractors (ABC), in 2022, the construction industry will need nearly 650,000 additional workers to meet the increasing demand for labor. The passage of the Infrastructure Investment and Jobs Act will infuse billions in new spending into the U.S.’s critical infrastructure, which will further intensify the competition for qualified craft professionals.
The pandemic has led employees to reevaluate their priorities, which has driven many to seek greener pastures, whether with a different employer or by opting for early retirement. In addition, the labor shortage and The Great Resignation instilled a sense of hiring urgency for construction companies. Because they have been in desperate need of workers, many companies have hired younger workers who are less qualified.
According to the Bureau of Labor Statistics (BLS), roughly 20% of worker deaths in the U.S. are in construction, which is intensified by the fact that construction workers make up less than 5% of the U.S. labor force. It’s clear the construction industry is already subject to more workplace accidents and injuries than other professions. And the influx of new blood and less experience will undoubtedly lead to increased safety issues.
The construction industry is also facing challenges on the other end of the generational spectrum with the aging workforce. BLS data shows that 22.7% of construction workers are 55 or older, and the average age of a construction worker is 42.5 years old. According to the CDC’s latest data, the industry’s average retirement age is 61.
New England is even closer to the retirement tsunami. According to the National Association of Home Builders (NAHB) analysis of the 2017 American Community Survey (ACS), the states with the oldest median age of construction workers (45) are Maine, Connecticut, and New Hampshire.
Construction firms that build a strong company culture are on track to deliver the highest level of service for their clients and combat these common issues. Strong culture fosters collaboration, innovation, professional development, and employee engagement. And all of these elements can lead to improved recruiting efforts, higher employee retention rates, superior craftsmanship, and a fortified team commitment to your company’s mission.
Contractors should focus on employee recognition, rewards, and project-based incentives. The elements can help ignite passion and pride in employees, which compels them to improve productivity and efficiency. Contractors should invest in employee development and training. It’s an often-overlooked area for overall business improvement. Enhanced knowledge can lead to a reduction in on-the-job injuries, lowered legal liabilities and risk, and an increase in job productivity.
Upskilling, cross-skilling, and reskilling are valuable training tools that benefit construction employers during a labor shortage. But they also provide significant benefits for employees, now more than ever. Upskilling often opens doors to career advancement, which is an opportunity today’s workforce holds in high regard. Cross-skilling and upskilling often make an employee’s work more interesting and fulfilling. And employers must consider ways to hold their employees’ attention and interest.
Contractors can focus on building a company culture based on genuine support, care, and concern. To feel safe and supported, workers need management to take an empathetic approach and recognize their hardships. It’s important to remember that the effects of the pandemic have been significant, and employees experiencing extenuating circumstances need compassion and understanding. According to the CDC, by June 2020, nearly 41% of employees were already reporting at least one pandemic-related adverse mental or behavioral health (https://www.commpayhr.com/covid-has-been-terrible-for-employee-mental-health-heres-what-employers-can-do/) condition, such as anxiety, depression, or increased substance abuse. Even pre-pandemic, the suicide and illicit drug use rates among construction workers were already on a concerning trajectory. OSHA has added a section to its website providing resources for suicide prevention in the construction industry. And the Substance Abuse and Mental Health Services Administration (SAMHSA) has a Drug-Free Workplace Toolkit (https://www.samhsa.gov/workplace/employer-resources) available to help employers create, implement, and maintain successful drug-free workplace programs. NASBP is also a caring supporter and stakeholder of the Construction Industry Alliance for Suicide Prevention (https://preventconstructionsuicide.com/).
Contractors’ employees need to witness a united acceptance of new policies and procedures by its management team. Contractors should work to ensure everyone on their management teams is committed to a strong company culture that empowers their employees.
Find Out More
See the Q and A’s published in the fall 2022 issue of Surety Bond Quarterly (https://www.suretybondquarterly-digital.com/sbpq/0322_fall_2022/MobilePagedArticle.action?articleId=1820959#articleId1820959.) The NASBP CPA Advisory Council and the NASBP Attorney Advisory Council also provide insights and expertise throughout the year through free NASBP Podcasts, found here: https://letsgetsurety.org/episodes/; timely NASBP Virtual Seminars, found here: https://learn.nasbp.org/; and NASBP Blog posts, found here: https://www.nasbp.org/informed/nasbp-blogs.