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.

Staffing Solution

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 recruit