A rapidly shrinking workforce, antiquated processes and material shortages are just some of the biggest challenges facing specialty contractors today. Procore recently partnered with Dodge Data & Analytics and surveyed 537 specialty trade contractors—mechanical, electrical, plumbing, steel, and concrete— to learn more about the key problems hindering the trades today and identify real solutions.
Here are some of the top learnings from the Dodge survey:
Leading Cause of Staff Loss: Retirement
Construction relies heavily on skilled workers, but a rapidly diminishing workforce is now the biggest challenge for specialty contractors, and this problem is ongoing. One major factor in this shrinkage are expected retirements.
Trade contractors are reporting that on average 32% of their current workforce is expected to retire in the next five years. This is another indicator that the labor shortage is not going away and something to take very seriously.
Additionally, about 27% of construction companies face a disastrous exit of nearly half their workforce during the same period due to retirement. The shortage of skilled labor negatively affects all specialty contractors, hampering projects, causing delays, and leading to quality and safety issues across the board.
Supply Chain Issues Cause Greatest Profit Erosion
The average margin loss among specialty contractors ranges from 5% to 7%, with the leading cause of profit erosion being supply chain problems, according to those surveyed. When faced with this issue, companies struggle with costly delays and are increasingly forced to absorb materials costs.
Price increases are not the only way specialty contractors are feeling the pressure of supply chain constraints. Many are having to turn down work entirely. Those impacted the most are steel contractors, with 40% of them reporting that they are having to turn down projects due to supply chain issues.
Antiquated Processes Further Complicate Labor and Material Shortages
According to Dodge Data’s findings, about 39% of specialty contractors still rely on outdated technology and business processes, including whiteboards, spreadsheets, phone calls, and paper filing systems. Smaller companies, earning $10 million or less, represent the biggest group, with 46% still relying heavily on outdated technology.
Smaller companies, earning $10 million or less, represent the biggest group, with 46% still relying heavily on outdated technology.
– Procore + Dodge Data Construction Network Report
Adopting more streamlined options, like construction software and automated processes, could be the key that small companies need to flourish, considering that the lack of materials and skilled labor affects this sector the most.
Technology Investments Aid Workforce Stability and Safety
In a bid to enhance their businesses, specialty contractors show a strong focus on keeping the workers they have. Technology can augment these efforts by improving productivity even with limited staff. About a third of all specialty contractors surveyed said they plan to invest more in technologies to improve team productivity.
Additionally, about 29% of larger contractors already rely on technology to ensure their staff’s safety, including using drones, site cameras and sensors, safety wearables, and artificial intelligence. Nearly half of all large and very large companies are considering expanding on safety technology, 21% of smaller and medium organizations already implement such technology, and 23% are considering it.
Better Technology Can Improve Project Efficiency
Nearly 30% of all specialty contractors report that the quality of communication between the office and the field could be better. Implementing effective standard methods of communication and mobile technology can help to eliminate misunderstandings, delayed critical messages, poor reporting, and even workplace animosity.
Payment systems that are outdated or handled manually can also frustrate a project’s progress or delay how often a company gets paid.
“When we asked people, ‘What do you think you can do to speed up payments’ the number one answer was ‘investing in better software technology’,” says Steve Jones, Director of Data Insight at Dodge Data and Analytics.
When we asked people, ‘What do you think you can do to speed up payments’ the number one answer was ‘investing in better software technology’
– Steve Jones, Director of Data Insight at Dodge Data and Analytics
The majority suggested using software capable of streamlining finances more effectively or adopting a system that automates the payment process altogether.
Procore’s Workforce Management Solutions
Procore’s Workforce Management solutions aim to assist all specialty construction companies in moving away from outdated management tools like whiteboards, spreadsheets, and paper systems. Workforce Management provides detailed and real-time insights that can help to improve your company’s productivity, schedule predictability, and profits.
