While already fighting to keep up with its typical hiring pace, the construction industry will need to draw more than 500,000 additional workers this year to meet rising demands, according to recent data released by Associated Builders and Contractors (ABC).
It’s not an easy task, as contractors are looking to accommodate an 18% projected increase in spending on construction projects while dealing with an unrelenting labor shortage that threatens their ability to complete projects on time and take on new ones. The rapidly dwindling labor pool that continues to vex firms is largely tied to its aging workforce. According to the U.S. Bureau of Labor Statistics (BLS), the percentage of construction industry workers who are 55 and over has nearly doubled, and as workers retire or leave for other industries, construction firms are scrambling to find replacements while also shoring up their workforce to capture new opportunities.
Construction laborers and skilled workers top their hiring lists, as do professionals on the management, business and financial operations side — a segment that BLS estimates to account for 20% of the construction industry’s total workforce.
As firms fight to secure the talent they need amidst the pressures of supply chain shortages, volatile pricing and a potentially looming recession, they need to rethink how they operate in the back office. In doing so, they have a powerful opportunity to increase their efficiencies and mitigate risks while giving employees what they want, and technology plays a part in this equation.
Rethinking the Construction Industry’s Back Office
The back office is the hub of operations for firms, as staff in this department are responsible for handling the complex finances of construction. Back-office employees must confirm that contractors and suppliers are accurately paid and properly manage cash flow to ensure business continuity and growth. Yet despite its critical importance, the back office is often overlooked when budgeting for technology.
As a result, processes like navigating invoices or paying bills remain paper-based and inefficient. Employees are tasked with mundane work, such as chasing approvals on invoices, cutting paper checks and following up on outstanding lien waivers. As firms take on more work, so do back-office staff — making manual and burgeoning workloads more taxing and hindering to talent efforts, including retaining staff or attracting new hires.
Automation can help modernize the back office by reducing paper processes while streamlining invoicing and payment routines. For example, automated accounts payable (AP) software might free staff for more rewarding work and provide greater visibility into payment statuses with contractors and suppliers, empowering employees to add more strategic value to their firms by spotting opportunities and insights that can be used to guide important decision-making.
Offering Flexibility to Aid Retention & Hiring
Among the greatest waves of people leaving their jobs since the pandemic are those in construction and finance, according to data from BLS. Many got a taste of remote work during pandemic lockdowns and resigned to take jobs with more flexibility, including remote or hybrid work setups.
However, back-office staff in construction firms have largely been tethered with inflexible employment options. Many of their daily routines have been tied to a physical office location, making employees dependent on file cabinets, printers and the mailroom to get their work done.
Through innovative technologies like cloud-based AP solutions, firms can enable staff to do their work from anywhere, at any time, including on jobsites or at home. Staff can remotely process and oversee invoices and payments from a centralized platform. They can take advantage of electronic payment options — rather than cutting and mailing paper checks — while incorporating an even more robust payment approval process.
Providing a Competitive Advantage to Future-Proof Hiring
Modernizing the back office provides construction firms with an immediate return on their investment, helping staff do more with less while making their work more flexible and enjoyable. It also reduces expensive overhead costs including paper, postage and supplies, and eliminates the need for additional head count.
Investments in technology also position firms to better compete for their future hiring needs. It’s expected that as younger generations replace the older workforce, they’ll expect technology in the workplace.
In fact, a study from the Workforce Institute found that one-third of Generation Z professionals expect their employer to provide modern technology, and one in five wouldn’t accept outdated technology at work.
To meet this shift, construction firms need to invest in technology to hold onto their staff, drive career satisfaction and continue to attract new talent. If not, they risk losing them to competitors who have already invested in modernization.