Is the HR team overlooked in your construction company?
In construction, HR is often viewed as a back-office function rather than a strategic driver of success. However, HR is essential for managing the workforce challenges that directly impact project outcomes and profitability.
Construction companies rely on their people. That means success hinges on having the right talent, engaged teams, and effective labor management.
Let's explore why HR is critical for construction success and how it drives long-term business growth.
Every industry has its own workforce challenges and HR considerations, but perhaps none are as complex as construction. Here are four unique workforce challenges:
At around 57% annually, according to the Bureau of Labor Statistics, construction companies face much higher turnover rates than other industries. Replacing more than half of the workforce every year increases recruitment costs, disrupts workflows, and reduces productivity.
Finding and keeping construction employees is difficult, especially for skilled workers like electricians, welders, and project managers. There’s a widening gap between demand and availability, and HR plays a key role in recruiting and retaining skilled professionals.
Construction employees fall into a variety of categories, including full-time employees, subcontractors, and temporary or seasonal labor. Managing this mix requires specialized HR expertise.
In construction, HR is also tasked with ensuring safety on job sites and complying with labor laws, such as OSHA and prevailing wage laws.
HR covers a wide range of strategic responsibilities, including these five key areas in construction:
The success of construction projects relies on having the right people in the right roles. Poor hiring decisions or talent shortages can delay timelines and increase costs. HR contributes by developing strategies to attract skilled candidates. It also helps keep skilled employees by implementing retention programs like career development, competitive benefits, and mentorship opportunities.
Construction projects must strike a delicate workforce balance to avoid overstaffing or understaffing. HR uses workforce analytics to forecast labor needs for upcoming projects and collaborates with project managers to assign the right talent at the right time.
Engaged employees are happier and feel more productive, safer, and less likely to leave. HR oversees many aspects of employee engagement, including creating programs to improve employee morale, such as recognition programs, clear career paths, and wellness initiatives. HR is also tasked with conducting regular surveys to identify and address pain points and opportunities for improvement within the company.
Construction companies have to follow detailed regulations. Non-compliance with labor laws or safety regulations can result in lawsuits, fines, or project shutdowns. HR manages certified payroll reporting for public projects, ensures compliance with OSHA and other safety regulations, and leads safety training programs.
Construction is a dangerous industry and has high rates of workplace injuries and fatalities. HR develops safety programs to prevent risks, ensures consistent implementation across job sites, and tracks safety performance metrics.
The impact of HR goes beyond just the people to strong returns and financial improvements. Investing in a strong HR function creates an all-around stronger company. Consider these meaningful impacts:
Strengthening the HR function helps construction companies now and sets them up for future success, especially in a changing industry. In many ways, HR leads the charge to future-proof a construction company and turn it into an industry leader.
The labor shortage isn’t something that can be fixed overnight. HR teams can invest in training programs to upskill current employees and attract new talent. Partnering with trade schools and apprenticeship programs can help companies create a pipeline of skilled labor and a steady stream of talented employees.
The future of construction is digital. HR teams can use software to automate payroll, compliance, and workforce management. The team streamlines operations and creates a more efficient company by implementing mobile apps for time tracking, safety training, and communication between job sites and HR.
HR leads the charge to create a culture of inclusivity, which comes through in a diverse workforce to widen the talent pool and drive innovation. HR can develop policies and systems to support underrepresented groups in construction and give them the resources to thrive.
The construction workforce is constantly changing, and HR can implement succession planning and knowledge transfer programs to avoid losing information as employees advance in their careers and retire.
If you’re ready to make a change in your HR department, here are four ways to strengthen the team:
HR isn’t just an administrative function — it’s a strategic partner that impacts every aspect of a construction company, from safety and compliance to productivity and profitability.
Learn how hh2 Remote Payroll and workforce management tools can empower your HR team to drive better outcomes — schedule a demo today.