Consumer demand for housing is sky-high right now, but several issues are preventing home builders from being able to truly seize the moment. Chief among those issues is a shortage of talent. For decades, the industry has grappled with declining interest in construction among young people, an aging workforce, and a lack of gender and racial diversity. In the wake of the pandemic, the staffing challenge has become even more acute.
According to the June 2022 Home Builders Institute Construction Labor Market Report, the construction sector needs to add another 740,000 workers per year to keep up with demand. Each month there are 300,000 to 400,000 job openings; over the course of 2022-2024, this total represents a need for an additional 2.2 million net hires in construction.
What Are the Hiring Challenges for Home Builders?
A convergence of factors contribute to home builders’ staffing challenges in both the skilled labor and white-collar segments of their workforce. Builders must confront interconnected problems, new and old, ranging from the aging skilled labor workforce to The Great Resignation, all of which contribute to shrinking talent pools for employee recruitment and higher turnover.
However, the construction industry’s talent pipeline isn’t just lacking young people, it also lacks diversity. Despite the fact that women account for half of the overall workforce, just 11% of construction workers are women. That number is slowly climbing, however, construction still has the lowest participation rate among women of any of the major industries tracked by the U.S. Bureau of Labor Statistics, behind Mining, Transportation and Manufacturing.
Minority participation in construction is also low. Black and Asian workers are underrepresented at 6% and 2%, respectively. And even though Hispanic or Latino workers account for one-third of all construction employees, they’re not equally represented at all levels—90% of construction managers are white.
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Hiring More Diverse Candidates in Construction
These pipeline issues are on a collision course with one another. Addressing bias and discrimination in construction is essential for cultivating the next generation of construction industry talent. Gen Z represents the most ethnically and racially diverse generation in history, meaning the home building industry must confront its diversity and aging worker challenges at the same time. Home builders need a diversity recruiting strategy.
With so many factors beyond their control—from materials costs to supply-chain issues—it drives home the need to focus on factors builder teams can influence. Improving the hiring process is a great place to start. Home builders need to quickly fill their candidate pipeline and increase diversity. And, it’s not enough to simply fill roles with warm bodies. To avoid the high costs and lost productivity of making a bad hire, each new hire needs to count.
It’s a tall order for recruiters in this highly competitive market. But with the right data and tools, talent teams can quickly identify viable candidates, evaluate them more effectively, and set them up for success in their roles.
A Good Starting Point for Hiring Construction Talent: On-Target Job Descriptions
A critical starting point for widening the builder talent pool is a job analysis, a scientific approach to understanding the mindset, competencies, and skills that are most relevant and critical to success, typically done in partnership with an industrial-organizational psychologist.
The job analysis process enables home builder teams to think carefully about their recruiting decisions and why they are making them, including the development of a job description. Using generic job descriptions based on templates or descriptions found on Google can exclude exactly the kind of construction candidate talent teams want to attract. And such generic job descriptions may not accurately and completely convey what’s needed for each particular position at a home building company.
As a result, job applicants are more likely to be mismatched for the role, increasing the likelihood of making a bad hire and all of the pitfalls that come with it: performance issues, employee burnout, staff turnover, and poor collaboration.
How to Find the Candidates You Need: Streamline the Hiring Process
Another crucial step in employee recruitment is to streamline the hiring process, removing steps that add time without generating additional insights. The talent shortage has shifted the power dynamic in favor of the candidate. If candidates are required to regurgitate information they’ve already provided or to perform time-consuming test projects, that can quickly turn off in-demand applicants.
Builder talent teams need to refine their hiring process, with the candidate foremost in mind. By performing a job analysis, talent teams will gain an understanding of the skills, traits, and aptitudes needed to be successful for a particular position and those qualities that are extraneous.
Building the hiring process around the job’s core requirements empowers talent teams to provide a more efficient process while in parallel creating a more transparent experience where candidates are given clarity on why they’re asked to perform certain tasks, along with feedback after each interaction. This also allows candidates to better evaluate if a home building company is the right fit for them and gives recruiters the insights they need to make better hiring selection decisions.
Reduce Bias at Every Stage of Hiring
To expand the talent pool, it’s important to eliminate bias at every stage of the hiring cycle. When unconscious biases influence hiring processes, qualified candidates may be overlooked or may not even apply for roles in construction in the first place. For example, it’s likely that gendered language appears in many construction worker job descriptions, considering that men have historically dominated the construction industry. This language can deter women candidates, even when they’re qualified for the role. As talent teams revisit job descriptions, they should replace biased language with more inclusive terminology.
The next step to addressing bias is to remove subjectivity during the interview and evaluation stages of hiring. Interview questions can invite bias, especially if hiring managers don’t ask all candidates the same questions consistently. By developing a standardized set of questions and a scoring model that speaks directly to the needs outlined in the job analysis, builder talent teams can ensure everyone has a fair opportunity and good candidates don’t slip through the cracks.
Assessments also play an important role in removing bias, since they provide another objective way to evaluate candidates and keep their qualifications in focus. Performing assessments before the in-person interview helps to eliminate bias, enabling hiring managers to get an idea of candidates’ capabilities before their appearance ever becomes a factor.
To Find the Best Workers, Expand the Candidate Pool
Home building companies often limit their candidate pool by expecting applicants to have specific experience, instead of finding people who have the capacity to learn. And even experienced candidates may have habits that need to be unlearned in order to thrive.
Expert-developed assessments measure a candidate’s hard and soft skills, allowing you to make a truly informed decision. Candidates with non-construction experience may have transferable project management skills that suit the construction superintendent position. They may also have the assertiveness, attention to detail, and other traits highly valued for that role. It’s also useful to assess the skills of candidates who are underqualified in some areas but very strong in others, so you can understand what training they need after being hired.
Find the Right Candidates Using Better Talent Acquisition Practices
With so much pressure to fill critical roles, it may seem like now isn’t the right time to refine talent acquisition practices. But the work put in on the front end will accelerate the process of finding the right candidates. Solving construction’s labor challenges requires expanding the candidate pipeline, however, casting a wider net can easily become overwhelming.
By engaging in a thorough job analysis process and refining the cadence of assessments and interviews, builders can cast that net strategically. As they perform outreach to new demographics and seek out candidates with transferable skills, that strategy is critical to attracting ideal prospects and filtering out candidates who aren’t right for the organization.
Plus, optimizing talent acquisition processes offers benefits beyond accelerating hiring and reducing turnover. Providing a streamlined hiring process boosts an employer’s brand, making it easier to attract high-quality candidates. And when there is an understanding of what qualities to look for in potential candidates, it’s easier to hire people whose values align with the company’s brand values. As the housing market continues to take on historic challenges, that’s what’s needed to meet demand and ride the waves of change.
Dr. Craig Ellis is head of industrial-organizational (I/O) psychology at HighMatch (formerly Berke), with more than a decade of experience partnering with executive teams of leading home builders nationwide to solve some of their most critical hiring challenges.