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Mar 31, 2022 IST Team

What is Driving the Costs of Nationwide Skilled Trades

Job satisfaction in the skilled trades is remarkably high, with 83% of tradespeople satisfied with their choice of work. And yet, finding and hiring skilled tradespeople is becoming increasingly difficult.

77% of tradespeople believe the labor shortage is a problem, and with an ever-expanding construction industry, how can your company keep up with increased demands? You might feel like you’re fighting against a tide of missed deadlines leading to overtime costs, rising material costs, and superior skilled tradespeople feeling the pull towards home services.

If you’re feeling overwhelmed, we’ll break down the issues driving the costs of nationwide skilled trades and offer solutions to steady the ship.

Nationwide Skilled Trades: What is Driving Costs?

The shortage of skilled tradespeople is the biggest threat to construction projects. In the post-pandemic climate, things might get worse before they get better.

With COVID cases still rife and a shift in how people live and work, it’s worrying to think about staffing your project and essential to keep unnecessary costs to a minimum.

Let’s look at the five significant cost drivers in nationwide skilled trades.

#1. The Labor Shortage

It’s frightening to think U.S. construction contractors are turning down work because they don’t have enough workers.

62% of contractors report high levels of difficulty finding skilled workers. The implications are tangible, including slow growth, less time for a family due to long days attempting to cover unfilled roles, and decreasing revenue.

With many problems to overcome, the construction sector must address the labor shortage first.

Higher Wages

To ensure the success of a project, you need the best skilled tradespeople. The labor shortage drives up the cost of skilled workers who can get a better salary and are in demand. They have the leverage to bargain for better pay, benefits, and flexibility.

You might ask highly skilled workers to do more than required of them. But if you can’t afford higher wages? They might feel undervalued and overworked, leading to discontent.

Hiring Standards

You’re in trouble when your hiring process is reactive rather than proactive.

Currently, open construction jobs average between 300,000 and 400,000 each month. With fewer applicants to choose from and desperation to find workers at an all-time high, less qualified candidates and wrong hires could cost your company a lot of wasted money and resources.

Untrained workers also impact workplace safety. Getting them up to speed leads to higher onboarding and training costs.


66% of general contractors carry added costs from overtime and second shifts on at least three-quarters of their projects due to schedule slippage, with 50% needing to extend the project end date.

Every extension incurs costs and means lost work.

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Cost of Living

To hire the best people for the job, you might ask candidates to relocate.

Relocation can be stressful, and employees might have concerns such as the impact on their family, lifestyle, and career progression. You’ll have to factor in relocation costs and financial support.

The cost of living increased post-COVID-19 due to rising oil and gas prices, affecting workers driving to worksites and paying their water and heating bills. Can you increase wages to compensate?

An Aging Workforce

The median age in the skilled trades is 43, and with fewer young people entering the trades, solutions are needed. Older workers move into higher positions. They want to work less, either from personal choice or years of physical work taking its toll.

#2. Lack of Materials

There are worldwide shortages in materials needed to complete projects. NAHB says more than 90% of builders reported delays and materials shortages in 2021. Steel and lumber are the most-reported product shortages, and fluctuating costs have a moderate to high impact on their businesses.

The supply crisis incurs rising costs and unavoidable delays, and inflated construction costs drive up the price of new-build housing and all building projects. The shortage also makes it challenging to pick projects because expenses might continue to increase and make estimates difficult to honor.

#3: The Pandemic Aftermath

60% of contractors say COVID has made hiring harder.

Workers are changing careers in record numbers. Millions of people were furloughed during the pandemic, and some rapidly adjusted to working remotely. Others realized they wanted to slow down, leading to high disengagement, resignations, and a push for worker empowerment.

For younger workers already wary of the perceived dangers of construction work, remote work is attractive.

The construction industry should see this as an opportunity. Emphasis should be placed on high job satisfaction, good wages, and career advancement. The industry is helping drive the economy to recover, but with a shortage of skilled workers, the same problems arise (higher wages, overtime, and lower hiring standards).

#4. The Digital Revolution

The construction industry is catching up to other sectors by implementing technologies like cloud-based software to improve hiring, onboarding, different processes, and drones for more efficient site visits.

It’s easier to share project data throughout the planning, designing, building, and operating process. Technology goes a long way to attracting younger workers to the industry with online applications, interactive training, and employee portals.

Can companies afford to adopt or invest significantly in technology in the current climate? If they don’t, they might be left behind.

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#5. Rework

$31.3 billion in rework was caused by insufficient project data and miscommunication in the U.S. alone in 2018.

Rework is a consequence of work that wasn’t done correctly the first time, or part of the construction doesn’t meet customer requirements or comply with the contract. It might not be discovered until quality control is checked when it’s often too late.

Much rework is put down to errors, changes, and omissions but is traced back to the lack of coordination between design teams.

The shortage of labor rears its ugly head here, too. Tradespeople are expected to do jobs they’re not paid or trained to do, and some workers lack professionalism. Poor site management and unclear instruction might also lead to shoddy work.

What are the Solutions?

Many of the construction industry's problems stem from the labor shortage and its ripple effect. Better recruitment practices and extensive pre-project planning could provide contractors with skilled workers across their projects.

Word-of-mouth recommendations have an outsized presence as the preferred method of recruiting into the trades. Considering the gaps and demographic shortages, the industry must develop a broader pipeline.

Trades have an opportunity to utilize modern and engaging recruitment tools. Incentives like flexible work schedules, job satisfaction, and benefits might entice a younger and more diverse workforce.

If construction companies embrace technology, they could improve onboarding, training, and worker engagement. Also, robust data sharing and communication across the project lifecycle might save costly mistakes and project delays.

Partner With Staffing Agencies to Work Around the Labor Shortage

The biggest cost driver for nationwide skilled trades is the labor shortage. Many of the consequences of the labor shortage can be alleviated by partnering with a staffing agency that:

  • Knows what you need because they validate your plan from the outset.
  • Have a deep bench of qualified and job-ready candidates on their books.
  • Help you avoid last-minute scrambles, and
  • Are niche recruiters.

Reach out today and start your next project confident you’ll have the skilled tradespeople you need when you need them.

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Published by IST Team March 31, 2022
IST Team