Markets

Three Areas Most Impacted by the Skills Shortage

Productivity, employee satisfaction and turnover are most commonly impacted by the labor shortage. Here's how business owners can avoid negative effects on their operations and employees.
By Kelsey Fritz
May 7, 2018
Topics
Markets

Everyone in the construction industry is painfully aware that the labor shortage is impacting almost every facet of their business. Despite such a positive projected growth for the industry, it’s vital businesses evaluate what areas the labor shortage is affecting the most.

A recent report from Hays’ U.S. 2018 Salary Guide showcases that across the accounting and finance, construction, IT, life sciences, and property and facilities management industries there are three general business elements 92 percent of survey respondents agreed were being severely impacted.

1. Productivity

When businesses have less employees to do the same amount of work or more, it’s typically more challenging for them to be as productive. This is particularly evident in the construction industry due to the volume of new work projected for the years ahead. With major companies such as Amazon and Microsoft building new headquarters, the numerous recent U.S. natural disasters, and the proposed Infrastructure bill, the construction industry is one of the few that will continue to see rising job rates and a high demand for work.

However, a National Association of Home Builders poll of 2,000 18 to 25 year-olds found that even though 74 percent say they know the field in which they want to have a career, only 3 percent are interested in the construction trades.

2. Employee Satisfaction

This element goes hand in hand with productivity. If employees are facing more stress due to the higher volume of work and not enough personnel or resources to handle it, stress is inevitable. With increased stress, it’s easy for employees to face burnout, which could lead to lost revenue for the business and a new job search for the employee. In fact, in the past it has been estimated that job stress cost U.S. businesses between $150 billion (according to Spielberger, Vagg, & Wasala, 2003, citing Wright and Smye) and $300 billion annually (according to the American Institute of Stress).

3. Turnover

The two elements above are a fast track to affecting this third one. If employees feel overworked, aren’t able to get their work done and aren’t feeling satisfied in their job, it’s a recipe for a high turnover rate. A survey of 614 human resources professionals by software provider Kronos Incorporated and executive development firm Future Workplace found 46 percent said that employee burnout is responsible for up to half of their annual workforce turnover. The study also found 32 percent of respondents said unreasonable workload and too much overtime/after-hours work (32 percent) were two of the top three contributors to burnout, the third being unfair compensation at 41 percent.

prevent decreased productivity, dissatisfaction and increased turnover

Proactivity Around Hiring and Retention
In Hays’ guide, it listed promoting company culture (48 percent) and offering competitive salaries (43 percent) as the two most successful methods of appealing to job seekers. Making sure both of these areas are highlighted proactively and throughout the entirety of the hiring process is essential to peaking the interest of the right job seekers. On the opposite end of the spectrum, the largest threat to retention was competitors who can pay more, with money being the biggest factor in turnover.

Highlight Company Culture
As noted above, focusing on company culture gives a job seeker a peek into what it’s like to work for the company and what kind of values it’s serious about. This doesn’t just mean highlighting that the business has team bonding activities and free coffee. To be a step ahead of the competition, offering benefits, flexible schedules, development opportunities and paid leave could be a game changer for prospective and current employees.

Evaluate Training Approach
Technology is not only changing the industry, but also the ways employees can be trained. With employees in the construction industry taking on more responsibility, it’s important to have training methods in place that are flexible and adaptable to the industry changes. To get employees through the training process more efficiently, companies should have a balance of more practical educational experiences in addition to more traditional formats such as the classroom.

Businesses should strongly consider setting aside the time to reevaluate their approach to hiring new employees and retaining the current ones. The labor shortage won’t be fixed overnight, but all companies can put together strategic efforts so that they don’t continue to have a negative effect on the industry and its employees long-term.

by Kelsey Fritz
Kelsey is a Marketing Coordinator at Trader Interactive, which specializes in providing commercial dealers and manufacturers with products and services to establish and grow their online presence in today’s market.

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