How to Control Construction Labor Costs, Cost of Hiring New Employee

Mitigate the Costs of Hiring New Employees

The U.S. recession and the resulting housing market crisis of 2008 shifted the dynamic of the construction industry. What had been a robust market filled with an abundance of skilled labor turning to deserted projects. Skilled workers waited for a quick, strong comeback that did not seem to come. Weary of waiting for a turnaround and faced increasing needs for survival income, many of them abandoned the industry for other pursuits. In the years from 2007 to 2011, the construction industry lost nearly 2.2 million workers.

Although the construction industry has started to come back slowly, the workforce is not what it once was. A whole new generation of workers now need to be trained in safety standards and machinery in order to be proficient in the industry. According to the U.S. Bureau of Labor Statistics, more than 1.2 million jobs have been made available because of the housing market exodus. This high demand, low supply of skilled workers situation has made it hard for employers to control construction labor costs.

Construction employers and industrial project managers who want to lure workers back to building sites have had to find creative ways to reach skilled workers. Many have relied on traditional job advertisements in local newspapers and online job banks. But these tactics end up being a time and resource drain on employers with a steady influx of unqualified applicants.

This dwindling of precious time is the reason you need to work with a construction labor staffing agency like Tradesmen International to help you manage construction labor cost. How much is your time worth? Let’s explore the real costs of hiring construction skilled labor.

The two main costs of hiring new employees:

1.  Time and resources in advertising. It isn’t just the cost of placing an ad. It is the time it takes to weed through hundreds of applications to find a handful of truly qualified applicants. Then, the time it takes to arrange interviews and testing, check references, and make an offer. All of this takes time. Time is money.
2. Time and resources in training and retaining. Once new employees are hired, construction managers must turn their attention to retention. A recent practice since the construction industry started to struggle for skilled labor has been poaching. Project managers who are desperate to fill positions in a short time frame travel to competitor sites and offer slightly more money to lure away competitors’ workers. It is not an ethical approach to hiring, but it has eased the burden or advertising for some employers. This means you’ve wasted time hiring and training an employee who may not be with you for long!

With construction staffing agencies like Tradesmen International, many hiring expenses are contained. Companies who rely our specialized services receive the benefit of an integrated hiring process that delivers skilled, experienced workers. Much of the guesswork that appears during hiring is removed.