One of the top issues confronting construction today—particularly on the residential homebuilding side—continues to be access to skilled labor. The concern has even surpassed material cost challenges.
We’ve probably all heard: all real estate is local!
Yet, residential homebuilding is facing economic issues that are both macro and micro. While the construction sector was one of the first to be confronted with the issue of attracting and retaining skilled labor, there is a broad-based concern throughout our entire economy with more open positions than unemployed participants. The residential homebuilding labor pool has been shrinking due to the aging out of current participants and a reduction in entrants for a variety of reasons including a continuing hangover from the 2008-9 recession. That’s one aspect of the macro picture.
Declining productivity is another impact for the residential construction industry. National statistics indicate productivity growth since the recession has been limited to 1.3% (vs. a 2.2% rate in the 1990’s). Additionally, without productivity gains, wage growth is limited as it needs to grow faster than productivity growth. Thus, there are limited wage incentives available for new workers to enter this specific labor force.
Residential homebuilders face these national macroeconomic factors and there are many suggestions and programs to mitigate through immigration reform, training/certificate programs, increased off-site production, etc. These are high level, long-range, multifaceted solutions at a macro environment level and they certainly warrant engagement.
At the same time, homebuilders are facing the impact of the macro environment at their micro level—the jobsite. They’re confronting a labor shortage and unskilled workers every day—and experiencing the negative effect on delivery and quality. That’s where targeted and effective technology implementation will help individual homebuilders see significant productivity (and profitability) impacts. It’s an industry that has been slower than others to adopt technology; yet, these positive outcomes can be seen relatively quickly.
Two technology initiatives deserve particular attention for their ability to generate returns: automated construction scheduling and realtime quality assurance management. Implementing construction scheduling helps put a laser focus on process and utilizing a well-constructed, organization wide schedule is a first step to best practices. There are relatively inexpensive, easy-to-use construction management software products that can be implemented quickly and start paying off immediately.
It’s often been said “the best builders are the best schedulers” as a good implementation will improve communication at the builder level and with their vendors resulting in decreased cycle times and fewer dry runs. Everyone is able to take advantage of 24/7, anywhere/anytime schedules, notifications, and drawings through cloud-based platforms and SST (self-service technology) portals.
Realtime quality assurance goes hand-in-hand with an automated construction scheduling implementation. The impact of a smaller labor pool that has fewer skilled participants means a builder’s field managers spend more time on oversight and callbacks. Field personnel are not only managing the schedule ensuring delivery but spending more time managing rework. On-site QA provides the ability to identify problems at the time and point of failure, capture documenting evidence, and associate the items to the construction task. Optimally, with a full-featured schedule and QA technology solution, the task couldn’t be authorized for payment until the “punch” item was satisfied.
Putting together automated scheduling and realtime quality assurance practices also provides the ability to take advantage of KPIs (key performance indicators). Those are the measurable values that allow an organization to know how effectively they’re meeting business objectives. Now, builders can use data to determine why schedules are behind, what is causing rework, and how specific vendors are performing. They’re able to clearly detect construction and vendor issues not only on a single jobsite but across projects to rectify problems and identify trends.
While it is certain that residential homebuilding is confronting both the macro and micro impacts of the labor shortage, it also has the opportunity to address many of the micro jobsite challenges by taking advantage of technology that drives productivity and profitability.
Zoe Miller is a principal at Computer Presentation Systems, Inc., an innovative provider of software solutions to the residential homebuilding industry for more than 30 years.