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Navigating Construction Projects Amid Labor and Material Shortages

COVID-19 placed the world on hold, and we’re still dealing with repercussions. No industry was immune, especially commercial construction. To maintain productivity in the face of labor and material shortages, you need to adapt your operations. Continue reading to discover:

  • How the labor and material shortages came to be
  • Actions you can take to help mitigate delays
  • Where to find full-service construction in Nebraska

How We Got Here: Supply, Demand, and Poor Logistics

Understanding how to navigate labor and material shortages starts by identifying the core issue. So, let’s explore how our industry ended up here in the first place.

COVID-19 and the Supply Chain

We can trace supply chain disruptions back to early 2020 in the South China Sea. Container ports around Shanghai singlehandedly accounted for roughly 60% of global shipping logistics. Many shipping ports shut down—putting a complete halt to over half of all global exports. In response to these delays, vendors began cutting their schedules to anticipate a drop in demand, slowly moving fewer and fewer building materials to construction sites.

To navigate around supply chain disruptions, companies started looking for alternative suppliers. While these new suppliers had the products needed, the cost for construction materials was much higher. These decreased margins were then passed along to individual distributors and vendors alike. With many customers placing their new building construction on hold, material manufacturers adjusted to the decreased demand by producing fewer goods to save more money. But when COVID-19 restrictions began to lighten up and businesses started reopening, product availability became scarce and additional material shortages emerged.

In the years following the pandemic, the majority construction providers saw their operations affected with over:

  • 83% of construction companies experiencing product delays
  • 58% of contractors responding by putting higher bids on projects
  • 39% of providers turning down work opportunities due to material shortages

While supply chain and material shortages became a significant hurdle for commercial contractors, a new issue emerged—labor shortages.

Employee Turnover

According to the U.S. Bureau of Labor Statistics, the average age of construction workers has been steadily trending upwards. One decade ago, the average age was 36 years. But by 2020, it had increased to 43 years old. From a data standpoint, the average construction worker is older than the overall workforce. This becomes worrisome once current workers approach retirement age, as our industry will experience a significant labor shortage.

However, many economists argue we’re already at that point. Millennials and Gen Z are considered the most educated generations in the United States, with many turning to alternative career paths that don’t involve construction work and other blue-collar jobs. Currently, many construction companies are coming to terms with this harsh reality. Once it’s time to sift through new applications, they come to realize the worker pool is much smaller than it was just a few years ago.

During new construction, are window delays and drywall shortages hampering your productivity? You need a partner like CK Construction—we have established vendors to help you stay ahead of material shortages.

Start Your Next Project With CK

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Three Steps To Mitigate Labor and Material Shortages

Navigating these issues requires a strategic response, because in the construction industry, labor and material shortages are unavoidable; if you haven’t experienced them yet, you will.

So, when planning your strategy, focus on what your business can do to bounce back from these shortages. To set your company up for future success, you need to make the right moves now, such as:

Diversify Your Supply Chain

If Shanghai’s shipping ports were any example, it’s dangerous for operations to rely on a single resource—same with material shortages. By diversifying your supply chain, you mitigate potential damages. If one of your vendors gets backlogged, having additional suppliers helps maintain operations.

Take some time to assess your supply chain and evaluate the following factors:

  • Vulnerabilities in your current solution
  • Calculate the effect delays have on cash flow
  • Consequences from reduced cash flow (Loan repayments, contracts)

Next, collaborate with your supplier to understand what your contract’s clauses say about multiple vendors. See if you can diversify your chain and, if necessary, renegotiate your terms. To find alternative resources:

  • Compile your current vendor data and shipping routes.
  • Create a dashboard of local suppliers and imported materials.
  • Factor in disruption risks and see how they plan accordingly.
  • Once you’ve narrowed your list, schedule a few consultations to find the best fit.

Diversifying your suppliers is a critical step in mitigating future chain delays and material shortages.

Get Help With the Hiring Process

Bringing on new team members is expensive and time-consuming. Luckily, there are three actions you can take to make your recruiting process more effective.

1. Employment Agencies

Outsourcing recruiting through an employment agency means someone else is doing the heavy lifting for you. They’ll take the burden of recruiting off your plate, giving you more time to develop your existing staff.

2. Online Presence

Make it known that you’re hiring. By improving your digital presence, you’ll increase your brand awareness. List your open positions on LinkedIn, Indeed, Glassdoor, and other job-finder websites.

3. Current Employees

Encourage word-of-mouth recruiting. Let your staff know you’re hiring, and offer referral bonuses or financial incentives for employees who bring in successful candidates.

Partner With a Full-Service Contractor

Full-service general contractors have innate ability to bring an entire construction team together because they can handle every task, from daily labor to vendor logistics. Staffing issues are no problem for a full-service provider because they already have a complete team of contractors, builders, and carpenters. Additionally, they work with an established network of vendors, ensuring your building supplies arrive on time.

CK Construction: Full-Service Contractors in Nebraska

At CK Construction, we take pride in our complete construction services. From initial design to supplies and labor, you can rest assured knowing your project is in good hands. Have a new build on the horizon? Reach out to CK and schedule a free consultation.