The skills shortage in construction is a well-publicized problem. The U.S. Bureau of Labor Statistics found that rising demand for skilled construction labor will mean more than 430,000 unfilled positions in 2021. These challenges are compounded by the fact that digital transformation in the construction industry is inconsistent, with cutting-edge technology and outdated data sharing techniques both being used in the course of a single project. Here’s why the construction sector is facing an unprecedented challenge to populate the workforce and hire skilled labor.

Why the industry remains desperate for skilled talent

Construction backlog is a worsening problem.
The labor challenge is not new for the construction sector but that does not make the effects of a shrinking workforce any less challenging. While many industries have been successfully navigating an economic recovery after stabilizing from the effects of the COVID-19 pandemic, the construction sector has been unable to work through a massive backlog of projects. Increasing material prices and an overwhelmed global supply chain has only conspired to worsen the challenges presented by a lack of skilled talent.

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Attracting and retaining skilled labor is an expensive endeavor.
Without improving the image and reputation of the construction sector, attracting workers from the younger generation will be a challenge. Creating jobs in the construction industry is exceedingly expensive, with $1 billion in extra spending needed just to create 5,700 jobs.

The result of this can be an existential threat for small construction companies who might not have the resources to compete with the wages offered by major players in the industry. To solve this issue, construction businesses must go beyond increasing wages and offer a working experience that is improved by technology.

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The state of digital transformation in the construction sector

Companies have tried to meet the challenge of a shrinking workforce and limited productivity by embarking on digital transformation efforts. McKinsey and Company reported that businesses that effectively deploy technology can experience average productivity gains of 15% and cost reductions of 6%. However, the same report revealed that businesses struggle to maintain sustainable performance improvements following their organizations’ digital transformation efforts.

In the construction industry, organization silos, inconsistent technology adoption and the unique nature of each project have held business leaders back during transformation journeys. The key to unlocking the full potential of digital transformation is integration. There are three ways integrated technology can be applied effectively to manage the skills gap in construction.

1. Attract younger workers by introducing cutting edge technology in daily workflows.
For millennial and Generation Z workers, professional growth and learning is a key factor in deciding where they work. A report from Deloitte revealed that half of all millennial workers considered continuous learning a very important factor when choosing their employer. The report also showed that younger workers are also less likely to stay in a job where they feel like they are burdened with high workloads or stagnant growth.

Modern technology has allowed businesses to improve efficiency in daily workflows while introducing on-site and remote training opportunities. For example, virtual reality provides construction workers an opportunity to try nascent technologies and be trained in a safe and rewarding environment. These technologies then integrate into the average workdays of on-site workers and employees are then able to apply what they have learned.

2. Automate repetitive tasks to lower reporting burden for on-site workers.
When construction companies embark on digital transformation journeys, automation is almost always an important component of their plans. However, business leaders can sometimes struggle to find the optimal areas for automation and end up spending precious resources on tasks that might not be best suited to it. On-site workers are given many responsibilities, the most tedious of which is reporting. Since technology adoption is inconsistent across different departments or projects, site managers often default to using paper or chat groups to conduct reporting. This can be extremely frustrating for workers on the ground and can even affect compliance standards at the project site.

With integrated technologies, business leaders can deploy tablets and software that are natively connected to project management software used by team leaders, supervisors and administrative teams. Integrating all reporting and project management technologies removes the friction between divisions and allows teams to share information easily and efficiently.

3. Share the workload with improved mechanisms for inter-company collaboration.
Among contractors, sub-contractors, site managers, administrative staff and on-site workers, there are many stakeholders in any construction project. Collaboration and teamwork are critically important—especially as the construction workforce is increasingly stretched and prefabrication and modular construction technologies are employed to share the workload across the industry. The challenge this represents for business leaders is that each partner has independent workflows and technologies that might not be immediately compatible with each other.

Integration between management software and on-site hardware is crucial to enable collaboration between stakeholders in different companies. Allowing employees from disparate organizations to share information throughout a project also increases operational efficiency as the need for regular meetings and check-ins is reduced.

Collaboration, automation and training are just some of the areas that can be revolutionized by fully integrating industry-specific technologies with general digital tools. As technology improves and more advancements are made, a fully integrated technology stack also allows business leaders to build a foundation that paves the way for incremental upgrades as they are made available to the industry. This progress is necessary for attracting and retaining younger workers.