Contingent Skilled Labor: A Strategy to Decrease Hiring Costs and Challenges
If you’re like most IEC contractor members, your business did experience some level of growth in 2014. To further accentuate that good news, McGraw-Hill’s 2015 Dodge Construction Outlook forecasted a 9-percent increase in construction spending for the coming year, with building in both the commercial and single- family housing sectors expected to grow by 15 percent.
Equally as telling, the U.S. Department of Labor’s Bureau of Labor Statistics (BLS), in a recent 10-year employment and labor force projections report, documented that construction’s employment growth rate over the next decade will be tied for first with healthcare in a study that included 19 market sectors. Specific to our sector, the BLS projects that by 2022, the employment growth for electrician jobs will increase from 583,500 to 698,200. This 20-percent growth is faster than the average employment growth for all occupations, which is projected at 11 percent comparatively.
While this industry growth is clearly welcome, it does raise major concerns as to how contractors will find a qualified workforce to get the job done as we are already experiencing a shortage of electricians. Essentially, when you combine a growing economy and workload with the fact that more tenured craftsmen are retiring or exiting the trades compared to individuals entering the trades, the result will be an even more severe shortage of all types of skilled workers for the foreseeable future.
One solution utilized by many contractors is incorporating contingent labor into their on-going staffing strategy. “As the industry continues to grow, we believe there will be even more reliance on contingent skilled craftsmen by commercial, residential, and industrial contractors,” said Mike Christiansen, Tradesmen International’s Senior Vice President of Sales and Marketing. “In previous years, contractors simply added short-term employees onto their permanent payroll to meet workload spikes. Now, as the demand and shortage of qualified labor escalates concurrently, construction management is increasingly opting to supplement their core employees with high-caliber contingent trades to better meet fluctuating workload requirements.”
Staffing firms with a focus on the construction trades invest heavily in workforce recruitment initiatives and stand prepared to meet a contractor’s supplementary workforce requirements with large pools of pre-screened craftsmen ready for immediate dispatch. As a result, by using staffing firms, contractors reduce recruitment-oriented costs related to job board advertising, referral programs, interviews, and other on-boarding efforts. In addition, because most staffing firms cover the workers compensation, unemployment, benefits, and other payroll costs related to their contingent workforce, contractors also avoid these expenditures related to their permanent payroll.
“The construction industry workload fluctuates up and down quite often,” said John Mullen, President, J.M. Mullen Electrical Services. “It only makes sense to supplement my core electrician employees with extra manpower from staffing companies, which ultimately insulates me from these additional expenditures I would normally incur with incremental full-time employees that I only need for short-term periods.”
“More and more, contractors are including staffing field representatives in their monthly and project-specific labor planning sessions,” continued Christiansen. “This allows us to gain first-hand knowledge of the type of work calendared and to get solid projections related to the volume of electricians at various specific skill levels that will be needed for the short- and long-haul.”
Ultimately, by engaging in true partnerships with staffing personnel, contractors afford staffing firms ample time to effectively source through their substantial trade databases or to tailor a recruitment initiative specific to their client needs. The end result is the ability for staffing firms to schedule or reserve trade employees with specific skill-sets – from a few workers to hundreds – well in advance of their contractor client’s actual need date.
Valued Employment Opportunities
Commercial, residential, and industrial craft professionals are now recognizing the heightened role staffing companies play in the industry and value employment opportunities with these organizations. “The stigma of contingent or contract craft employees as being inferior has been stamped out,” said Matt McClone, Tradesmen’s Vice President of Workforce Development. “Craftsmen recognize that credible staffing services have stringent hiring procedures that have effectively sharpened the overall quality and reputation of the nation’s contract employee.”
Controlling the quality of its workforce has led to sizable employee retention increases as well as an upsurge of craft candidates proactively seeking employment with staffing firms. “While the workforce shortage impacts us all,” said McClone, “America’s craftsmen recognize the relationships reputable staffing firms have forged with thousands of leading construction companies in all markets. Employees understand this equates to job stability or security for them and their families. When one project is about to end, they know we’re already scheduling them in for the next project whether it be an office tower, power plant, ocean liner, national monument, or distribution center.”
In addition, many of the larger staffing firms are now able to attract some of the industry’s top skilled talent because they can offer their employees competitive pay, full benefits, paid time off, skill training opportunities, even OSHA-approved safety training, and on-going safety communication.
Ed Rojeck is Director of Marketing for Tradesmen International. For more information on Tradesmen’s staffing service and other labor-related services including Labor Productivity Consulting and OSHA Safety Training, e-mail email@example.com. Or, visit www.tradesmeninternational.com.