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January 21, 2025

Construction Toolbox Talk: Workforce Challenges in the Field

The saying goes, “There is payroll, and then there is construction payroll,” due to construction payroll’s complex processes, various rules and regulations, and specialized knowledge requirements. When you add the additional layer of industry-specific pain points–finding a skilled workforce, keeping accurate time, and remaining compliant–construction payroll can become challenging to manage. How are construction companies managing? Workforce Go CEO Chris Goheen and COO John Goheen use real-life stories and experiences to discuss how companies solve industry problems.

According to Builder Trend, 91% of construction companies report struggling to find and maintain skilled workers. The industry currently holds a 65% turnover rate. A severe labor shortage is projected to continue over the next 8-10 years, with construction companies needing to attract just under a half a million workers to meet need in this year alone. The statistics are staggering, but how might they show up in everyday business?

Stories from the Field

A general contractor in Oklahoma shares how their construction company runs into workforce issues. The company does a lot of local business and wishes to expand to projects outside of the base, however, expansion forces them to use subcontractors who can work on projects in other areas, as local workers are less likely to travel. Sourcing talent in outside areas becomes necessary but challenging due to the company’s lack of presence and their loss of control over the projects, costs, and quality of work.

What Companies Should Consider: First Impressions, Effective Recruiting Solutions,                                                          and Learning Management

A company’s ability to find and keep skilled workers relies heavily on a positive first impression and interaction.

“Typically you can overcome most things with…that good experience from the onset, moving them through with the least amount of hiccups.”

John Goheen

The ease of the onboarding process often sets the tone for workers, so companies should focus on convenience and efficiency, avoiding the “new hire novel” and other cumbersome paperwork to get employees working faster. But the onboarding process isn’t just about workers; how administrative staff interacts with recruitment tools can also greatly influence the recruitment process. Considering the needs of the administrative staff can help ensure they interact positively with their recruitment tools and solutions, often leading to a better, more engaged recruitment process as a whole.

Once the recruitment process is over, construction companies face the challenge of retaining their skilled workforce—statistics show a 65% turnover rate within the industry. The key to retention is creating opportunities for workers to enhance their current skills, learn new skills, become more competitive in the market, and advance in their careers.

“They want to know that the technology that’s being used is helping them as well. Typically what they say is ‘I want to know that I’ve got a career path. I want to know that I’m getting certified. I want to know that I’m advancing my learning and my knowledge.’…Most folks want to go work for an organization that’s making them more marketable.”

John Goheen

Finding ways to administrate both learning and performance management will prove critical to keeping talented workers, as they can monitor their growth over time while remaining competitive in the market.

Day-to-day time interactions are burdened with labor laws and other regulations. To collect accurate time information, “you need the right people in the right place doing the right thing,” or you can be fined and lose significant money. Construction companies simply cannot afford to get it wrong.

Stories from the Field

As a result of poor and inconsistent timekeeping, a subcontractor in DC incurred around $633,000 in fines for back wages. Looking back at their records, they noticed a discrepancy between actual hours worked and time recorded in the payroll system. Separately, a worker at a conference revealed a shocking timekeeping strategy. She collected the manually recorded information of the entire company and then keyed that information into the payroll solution. In each instance, the degree of human intervention in timekeeping left room for human error, compliance issues, and incorrect pay for workers.

What Companies Should Consider: Key Components of an Efficient Time Management Solution

Many construction companies still rely on paper time logs and manual entry in their payroll systems for onboarding and timekeeping. The reality is that construction companies need a minimal amount of resources to do a large volume of work while staying compliant and paying workers correctly. Companies also have the unique challenge of needing to track workers who are contributing to multiple projects at once or who need to log hours outside the typical 9-5 window. To help with accurate timekeeping, companies should look out for these key components in a time management solution:

  • Ease of Use for Workers:  If entering accurate time is challenging, workers will be less inspired to do it, let alone correctly. Ensuring that the timekeeping process is intuitive and efficient will increase consistent and accurate use of the system, leading to better and more accurate data.
  • Automation:  Too much manual entry can lead to more data errors. Automating parts of the data entry process can save companies time and labor and ensure more accurate tracking and calculations.
  • Controls:  Because payroll is so heavily regulated, it is crucial to protect the company from compliance and financial risks such as buddy punching, time theft, etc. Control elements such as scheduling tools, geolocation, and geofencing can help keep workers organized and on top of their time and location information while protecting the company from bottom-line impacts.
  • Date Review:  Reviewing and validating time data is just as important as collecting it. A good time management solution will allow companies to view real-time information and easily keep track of their workers and active projects.

A time management solution with these components is likely to increase worker productivity by enabling them to focus on the work on the ground instead of tedious data entry on paper or outdated systems.

Construction payroll alone is challenging due to regulations such as the Davis Bacon Act, union rules, collective bargaining agreements, fringe wage offsets, etc. To stay within federal and state guidelines and remain compliant, construction companies need to bring a payroll system that can handle these legal complexities and that integrates with people and time management. But remember, construction payroll is a two-sided coin, with one side addressing the worker experience and the other side concerned with administrative needs:

“There’s that second side of those solutions as well. Not only is paying employees correctly so important with payroll but for construction specifically, there’s all the reporting they have to do as well…These are the boxes that we need to check when we’re looking at payroll…the front side of all these calculations, making sure time is connected with payroll so that we’re paying individuals accurately, but then the back side, the administrative side: how we do that reporting, Certified Payroll, LCP Tracker, all of that information that’s required in order to keep our contracts.”

Chris Goheen

How can companies connect their people information with their business and operations?

What Companies Should Consider: A Seamless Integration

When it comes to integrations, many companies are unsure of where to start and how to determine what solution might be right for them. To find a solution that addresses the specific needs of the business, companies should search for:

  • Flexibility:  Companies should reach for the tailored solution that will make them more attractive alongside their competitors. Thinking about the competition and what solutions might provide an advantage and attract and retain a skilled workforce.
  • Client Experience:  Consider what kind of experience the company will have during the integration process and if there is adequate client support. Integrations can be heavy lifts, and with limited time and workers already, construction companies should seek out an integration process that won’t further strain their resources.
  • Scalability:  A solution that can grow and expand with the company is a sustainable one. Construction companies looking to expand or scale their business up or down due to seasonal needs will need a solution that stretches alongside them.

Having HR, time management, and payroll communicate smoothly is possible with the right integration, and we believe that our construction integration is what you need to address your business needs. You can check out our Construction Integration page to learn more.

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