Risks Posed by Skilled Labor Shortage: What Owners Can Do

22 February 2022Architecture and Engineering, Construction, Digital Transformation, Uncategorizedlabor shortages, risk mitigation, skilled trades



In November 2021, the Construction Labor Market Report  by the Home Builders Institute estimated that 740,000 new construction workers are needed every year to keep pace with the combination of current construction demand and the loss of workers who leave the industry. Although the entire industry is included in the jobs numbers, chronic construction workforce shortages include project supervisors and the skilled trades.

Hiring new construction workers is complicated because, when it’s necessary to bring them up to speed quickly on projects, they may not have the experience needed to fulfill their role in keeping the jobsite as safe as possible. Owners have an opportunity to positively impact safety risks and the labor shortage by making workforce development a prequalification criterion for contractors bidding on jobs.

If you need to tackle your own skilled labor shortage, contact Applied Software today and talk to an industry expert about workforce training and skills development.

In 2019, the Construction Users Roundtable (CURT) developed a Labor Risk Management (LRM) program to measure skilled labor risk and reverse labor shortages. In November of that year, the Engineering News-Record publication “Top Owners Sourcebook: Owners Begin to Take Action” reported, “for every dollar spent on workforce development, owners and contractors will save three to five dollars through enhancements to productivity.

skilled trade worker wearing blue shirt and ball cap using wrench on fixture behind white wall panel, skilled labor shortage

One of the CURT recommendations to owners was to “only do business with contractors who invest in training and maintain skills of their workforce.” Owners can assess contractors on whether they:

  • are focused on skilled labor development;
  • use workforce training programs;
  • performed safely on previous jobs.

Owners can use tools that have been developed specifically for this purpose – like the LRM by CURT or the Construction Workforce Development Assessment tool by National Center for Construction Education Research. Alternatively, owners can create their own detailed checklist that allows contractors to provide a verifiable self-assessment.

In addition to prequalifying contractors on the basis of workforce development, there are other ways owners can make a positive contribution to a safer, larger workforce:

  • Monitoring safety measures on jobsites.
  • Requiring regular safety meetings.
  • Keeping up with developments in technology and big data.
  • Amassing data to study the most efficient way(s) to deliver a project.
  • Using digital blockchain contracts.
graphic showing how blockchain works, how to help with labor shortage
Image: Autodesk Digital Builder


Regarding digital contracts, the Sourcebook explains each step in a project’s workflow can be recorded. So everyone involved in the project who needs to see transactions can do so in a central digital location. The important safety and labor benefits to owners using blockchain include guarding against counterfeit parts and equipment, watching out for double-billing, and scrutinizing to ensure billed work or equipment was actually supplied. An added benefit to both owners and contractors is the self-executing feature of digital contracts, which means payments are generated automatically so suppliers and contractors can consistently be paid on time.  

If you’re looking for a partner to help you improve processes in your company, contact Applied Software today. Let the experts of Applied help you prepare to take on more work when opportunity comes to call.



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