The ink is dry on a major new contract, and it‘s a massive win for your construction firm…until you realize you don’t have the crew to properly break ground, much less complete the project on time. It’s here when it hits you: winning the bid is only half the battle. You need the workforce to back it up.
The “we’ll hire when we need to” approach is a classic reactive hiring strategy. Unfortunately, in today’s highly competitive industry, it’s one of the least effective construction staffing solutions. While it might seem like a way to keep overhead low, it will ultimately stall your firm’s growth.
Here’s a look at a better approach to construction labor management, and how it can keep your projects on track and protect your margins.
Why Reactive Hiring Is Prevalent in the Construction Industry
“Reactive hiring” refers to the practice of starting a candidate search only when a critical need arises. Instead of anticipating labor requirements through more nuanced construction workforce planning, reactive hiring is a response by managers who must immediately fill significant gaps on job sites.
Granted, there are times when even the best approach to construction labor management can come up short, and sudden hiring is unavoidable. Winning a bid unexpectedly, or sooner than anticipated, can create a need for a dozen new skilled laborers ASAP, through no fault of your own. Unanticipated employee turnover, seasonal demand spikes, or even unforeseen project scope creep can also leave you understaffed on a moment’s notice.
Whether it stems from a lack of planning or events outside your control, reactive hiring is all too prevalent in the construction industry. One survey found that a staggering 86% of construction leaders admit to not having the required staff lined up when they bid on jobs. And, as you might expect, without a strategic staffing partner at your side or a well-sourced labor pipeline your firm has built, reactive hiring can lead to serious job-site problems.
The Negative Impacts of Reactive Hiring in Construction
Perhaps the most obvious problem of reactive hiring is that it’s expensive. When you’re desperate for hands, you shift the balance of power from employer to candidate. You inevitably pay a premium for the qualified workers you can land on a moment’s notice. Labor costs skyrocket, either from paying too much for new hires or from existing crews being forced into expensive overtime to cover gaps.
A McKinsey study backs this up. They concluded that labor shortages in the construction industry have actually led to a wage growth explosion, likely due to the massive amount of overtime required to complete projects. At the same time, some common tasks on job sites have suffered a nearly 40% decline in productivity, thanks to exhausted pre-existing staff or new hires thrown onto a job site without clear direction.
Proactive Staffing Strategies Are Cost-Effective
The answer to this construction workforce planning crisis is, of course, to switch from reactive to proactive hiring. When the right crew is ready exactly when the schedule demands, projects flow smoothly from one phase to the next without expensive idle time. But that’s not the only benefit you get.
For example, proactive staffing strategies also improve talent acquisition and retention. They give you the luxury of time to thoroughly vet candidates. You can be sure your hires align with your company culture and can help complete jobs on time.
Implementing Proactive Workforce Planning the Smart Way
Shifting from reactive to proactive can’t happen overnight, but there is a way to speed it up. The most successful firms build a flexible talent pipeline by partnering with reliable temporary staffing experts. A partner experienced in the construction sector already has a vetted roster of skilled professionals who can deploy when you need them. This gives you the agility to scale up instantly without the negative impacts of reactive hiring.
HireQuest Direct offers the smart way to implement proactive construction workforce planning. We have a deep roster of talented, experienced construction professionals ready to go when you place that bid or sign that contract. To learn more, contact a HireQuest Direct location near you today.
