July 18, 2022 Construction 4.0: A Necessity for Recruitment

The construction industry is facing an urgent need to modernize outdated practices to attract and retain a younger generation of workers.

By: Brad Barth, Chief Product Officer at InEight

The construction industry is facing a perfect storm of early retirements, a recruitment slowdown and increasingly restless talent pool attracted to higher wages. This is driving soaring construction costs and delays at a time when the Infrastructure Act will demand a major acceleration of development and has opened vacancies for 11 million new jobs in construction. The pandemic triggered a tidal wave of 3.2 million early retirements while the pipeline of new talent is simultaneously drying up partly due to a failure to appeal to a new generation of workers that value family, flexibility, and freedom over financial rewards and fixed work locations. These workers value collaboration and innovation over traditional, siloed practices. This creates an urgent imperative to modernize outdated processes, practices to attract and retain a younger generation of workers.

Digital construction technologies were previously perceived as productivity tools but are increasingly a fundamental aid to workforce recruitment and retention, and a way to preserve and pass on vital skills across generations of workers. Technologies such as machine learning hold the key to quickly upskilling new workers while virtual collaboration innovations from digital twins to connected data could create the flexible and collaborative working environments valued by this new generation.

A depleted pipeline

The US construction industry is facing a well-known materials shortage, but the supply line of skills is also running low. There were almost 11 million unfilled positions by the end of last year, a number set to increase as infrastructure development is ramped up. The industry is being buffeted on both sides by a twin retention and recruitment crisis with an unprecedented 3.2 million workers leaving the industry in 2020 while the pipeline of engineering, design and contracting talent is also drying up. This is having a knock-on effect on project budgets and timelines by driving up labor costs to, in some areas, double pre-pandemic levels.

The causes are many and varied. COVID-19 precipitated a wave of early retirements and resignations while a pandemic-related decline in training and a rapid fall in net migration has chipped away at attempts to recruit new talent. Yet there is also a growing incompatibility between outdated construction processes and the values of a younger workforce. High demand far in excess of supply has made construction an employees’ market, and research indicates workers are increasingly empowered to choose prospective employers based on alignment with personal values as well as pay and benefits.  

This belief-driven, tech-savvy generation seek technologically progressive companies built around innovation, flexibility, digital collaboration, and personal progression. This often conflicts with a construction sector that has long been perceived as technologically set in its ways and based on siloed roles and on-site deployments. The technical challenge of digitally integrating increasingly large-scale, complex, multi-partner projects across geographically dispersed sites and suppliers means the construction sector has traditionally lagged behind other industries in terms of digitalization. And falling behind on digitalization is now becoming a threat to recruitment and retention as well as infrastructure development.

Digital transformation is now a HR necessity

A short-sighted view of technology as delivering immediate, specific business benefits has led to sporadic, siloed digital implementations which often lack the innovation and connectivity today’s employees require. The construction industry needs to adopt a more holistic view of digital transformation as a tool for enhancing end-to-end workplace practices, processes, and personnel.  

For example, digital technologies not only provide greater visibility to jobsites, but also provide shared remote access to all physical asset content, enabling greater workforce collaboration and communication. Similarly, connected data breaks down divisions between teams from design to construction, helping create an environment that facilitates the innovation and continuous improvement valued by new generations. Many companies are introducing mobile-friendly project management technologies to provide the opportunity to be productive while “undocking” from the office (or jobsite), a new mode of working that is increasingly popular with younger workers.

Digital transformation also accelerates career progression, further boosting talent retention rates. Cloud-based platforms that cross-fertilize knowledge between projects could also transfer skills from past to future generations, boosting learning and development. And creating a common data environment that unifies information across all project teams helps democratize multidisciplinary knowledge previously siloed in specific departments, creating more multi-skilled teams and internal transfers.

Many firms now also harness technology to plug skills gaps by enabling scarce human resources to stretch further. Automating workflows from project measurement to document management can dramatically reduce admin burdens, freeing up human resources for more strategic tasks. Meanwhile, digitalizing and standardizing project measurement can facilitate integrated project delivery models where risks are shared to alleviate the burden on any one partner that suffers an unexpected skills shortage.

Crucially, digital transformation must be accompanied by a construction 4.0 workplace culture. This entails reconfiguring workplace practices around the collaboration, transparency and flexibility that is essential for both digital transformation and transforming employer brands to attract a new generation of talent.

Moving toward a construction 4.0 culture

The mass exodus of older workers, coupled with the pandemic, has forced the construction industry to attract a new generation of employee to curb spiralling labour costs and skills shortages. This means moulding itself in the image of a new tech-savvy, belief-driven generation that values innovation, connectivity, flexibility and personal progression. The digital transformation of construction is now no longer an optional extra but fundamental to winning the war for talent. The companies that succeed will be those that not only implement a grassroots digital transformation but create a ‘construction 4.0 culture’ pervading every part of the business.

As InEight’s Chief Product Officer, Brad Barth is a member of the company’s executive leadership team and a key architect of the company’s product vision and strategy. Prior to InEight, Brad spent twenty years in a similar role at Hard Dollar, where he helped define the project cost management (PCM) category of software that later became the foundation of InEight. Brad has driven many industry innovations in project controls software, most notably in the area of cost-schedule integration. Brad has served on the Board of Advisors for Fiatech/CII and is a frequent speaker at construction industry technology conferences.

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