June 28th, 2022

Top 4 HR Challenges for Small Businesses In Construction

There are plenty of HR challenges for small businesses these days, ranging from adapting post-COVID workplace policies to compliance with new laws and regulations to recruiting and hiring talent amid national worker shortages. All of these challenges are top of mind for HR professionals.  

But there are also industry-specific HR challenges that take up a lot of time and brain power. In the construction industry, for example, major skills shortages and training issues abound, along with the constant need to ensure a safe and compliant working environment. Staying aware of these challenges can help businesses in this space better strategize and plan for how to overcome them and thrive.

Here’s a look at the top HR challenges for small businesses in the construction industry:

1. Aging and Retiring Workforce

The construction industry is facing a change in its workforce: many of the older, more experienced workers are now aging out of the profession and retiring. Around 40% of all workers in the industry are between 45 to 64 years old; 56% of electricians and 65% of all heavy equipment and pile-driver operators are now over 40 years old. 

Yet expert construction and trade workers are often the greatest sources of knowledge and on-the-job training for new hires. Without that experienced cohort available to show the next generation of workers how things are done, all that valuable knowledge gets lost. This puts more pressure on HR teams to fund and provide comprehensive worker training through other avenues. 

2. Not Enough Skilled Workers

An ongoing shortage of skilled construction workers is putting many businesses in a bind as they try to stay on schedule and deliver projects on time. A large majority, or 88% of construction contractors, say they have a moderate to high level of difficulty finding skilled workers, and almost half (45%) say they have a high level of difficulty. 

When combined with high rates of turnover in the industry, there’s a possibility that even if a business is able to find the skilled workers it needs, those workers may leave in favor of other jobs that offer higher pay, better benefits, or more growth opportunity. This is especially important to younger workers who want to know that learning new skills and gaining experience will be worth their time. HR teams in charge of recruiting and hiring skilled workers may not have a lot of bargaining power when bringing in younger workers, compared to larger enterprises. They may also have to settle for workers who only have some necessary skills and need to be trained on the rest.

3. Lack of Updated Technology & Training

Much of the construction industry is quickly moving toward advanced technologies and digital tools that help them perform their work with more efficiency and accuracy. But small businesses by nature have to operate with smaller budgets, and many can’t afford to adopt the latest technologies to the extent they need to. Or if they do, they may not necessarily have the time, money, or in-house knowledge to properly train the workforce on how to use the tools. In a recent ConTech report, 28% of participants said a lack of knowledge about new technology limits their tech adoption. 

Lagging behind in technology not only puts small businesses at a competitive disadvantage, but it can also make it harder to attract workers who would otherwise be interested in the industry because of its technological breakthroughs and innovation. HR teams in construction already have a harder time recruiting and hiring new workers, but attracting the younger ones interested in developing long-term careers without providing updated technology and training is a near-impossible task.

4. Concerns About Safety & Compliance

Any construction or trade business has to be particularly concerned with the health and safety of its workforce and make sure all the various OSHA standards are being met, in addition to following any other safety-related state and local laws. But compliance isn’t the only factor. Workplace injuries can be devastating and expensive, costing over $44 billion in wage and productivity losses in 2020 alone and $12.8 billion in uninsured costs for employers. 

Even though jobsite managers might be responsible for ensuring the day-to-day safety of workers, it’s the responsibility of HR to stay on top of new and changing laws and regulations. HR then has to translate those laws into workplace safety policies and communicate those policies to the workforce — in addition to providing and managing workers’ compensation insurance. It’s an especially precarious job for small business HR teams. They’re often dividing their time among many other important tasks, making it easy for something to slip through the cracks, or they simply don’t have the legal and regulatory expertise available to fully understand and comply with the laws.

How Obsidian HR Can Help

Running a construction business is important in today’s society with all the many infrastructure, residential, and commercial building projects that are needed — especially here in Colorado! But small business owners and the HR teams that work for them have a lot on their plates that require both careful attention to detail and big-picture strategic thinking.

As small businesses in the construction industry grapple with various HR challenges, Obsidian HR can help by reducing the time, focus, and worry owners and HR staff have to expend on them. Our online platform and services:

  • Ease new worker hiring and onboarding processes by tracking applicants, facilitating forms and paperwork, setting up payroll, making sure employee handbooks are up-to-date and accessible, and administering benefits
  • Facilitate worker training and development, track training completion, and provide training reports that help businesses meet and stay compliant with industry standards and guidelines
  • Update businesses on changing laws and regulations, help reduce risk and ensure compliance, provide cost-effective workers’ compensation coverage, give guidance on injuries and safety issues, and help resolve worker grievances and disputes

To learn more about how we can help your business, download our guide below. 

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