The unique HR challenges construction companies face

Success in construction requires more than just brick and mortar. From managing a diverse and geographically dispersed workforce to ensuring compliance with complex regulations, construction companies are tasked with tackling a range of business challenges.

In this blog article, we’ll look at some of the unique HR challenges construction companies face and propose some solutions to them.

6 unique HR challenges faced by construction companies

Every construction company needs a capable and committed workforce to succeed. However, HR issues can come up frequently, and when they do, construction companies need to be prepared to deal with them quickly to maintain a positive work environment.

From attracting top talent to reducing employee turnover, here are six unique challenges in the construction industry and creative solutions to overcome them.

1. Finding qualified workers

Finding top talent is one of the major HR challenges construction companies face. For instance, 91% of construction companies struggle to fill positions requiring skilled craft workers.

While there’s an increasing demand for skilled construction workers, finding and hiring experienced and qualified individuals can take time. This can result in delayed projects, increased costs and decreased productivity.

To overcome this challenge, construction companies can offer competitive wages and benefits, provide training and development opportunities, and partner with trade and vocational schools to connect with and hire qualified workers.

2. Managing PTO and appropriate compensation

Managing paid time off (PTO) requests and appropriate compensation for a mobile workforce that may be required to work outside of regular hours, such as weekends, can be challenging. And when employees don’t have access to appropriate time away, it can result in costly mistakes, frustration and decreased morale.

Construction companies can address this challenge by adopting HR software that automates PTO requests and accurately tracks compensation. They can work with HR support to develop flexible PTO policies that enable workers to take time off as needed. Additionally, construction companies can work closely with their HR consulting partner to develop creative approaches to base and incentive compensation to meet the unique needs of their workforce.  

3. Complex safety and compliance

Construction businesses usually have to deal with complex safety and compliance requirements. They must comply with various federal, state and local regulations related to safety and health, which can be complicated and time-consuming to navigate.

To address this issue, construction companies should invest in comprehensive safety training programs, perform regular safety audits and work closely with HR firms that serve construction companies. This way, they can stay up-to-date on the latest regulations and best practices, reduce the risk of accidents and improve overall employee well-being.

4. High cost of worker’s compensation

The physical demands of the construction industry make construction workers more likely to suffer injuries and deaths, resulting in expensive workers’ compensation claims that can put a strain on a company’s finances and profitability.

To tackle this challenge, construction companies should perform regular safety audits, invest in safety training and equipment, and implement safety precautions and injury prevention programs.

Additionally, companies can work closely with insurance providers to negotiate favorable workers’ compensation costs and coverage. Doing this can reduce the risk of accidents, lower workers’ compensation claims and improve the company’s financial stability.

5. Constantly changing labor laws

Keeping up with new regulations and laws introduced regularly can be time-consuming. And failure to comply with these laws can result in penalties and legal action, harming a company’s reputation and finances.

To overcome this challenge, construction companies need dedicated HR departmentsequipped with the resources to stay informed about the latest laws and regulations. But this can be tough for smaller construction companies to implement.

A more realistic approach would be to contract and employ the services of a professional HR management firm to stay informed about changing labor laws and implement HR policies and procedures that reflect these changes.

6. The rate of turnover

The rate of turnover is part of the HR challenges faced by construction companies. Because construction companies have a physically demanding work environment and a mobile workforce, they may experience high employee turnover, as high as 65%, resulting in reduced productivity.

To address this challenge, construction companies can offer competitive wages and benefits, provide training and development opportunities, demonstrate employee appreciation and create a positive and supportive work environment. Additionally, a construction business can implement employee retention programs that help identify and address why employees may be leaving and take steps to retain valuable employees.

How human resources management can help

Human resources management can play a critical role in helping construction companies overcome their unique HR challenges. For example, a well-functioning HR department can help attract and retain skilled labor, manage a geographically dispersed workforce and ensure safety and compliance on construction sites.

With the right HR support, construction companies can improve their operations, achieve their goals and maintain a stable and motivated workforce. So, if you’re experiencing any of these challenges, contact a professional HR management firm that serves construction companies to help address these challenges.