Construction workers have become increasingly harder to find. According to the Associated General Contractors of America (AGC), 81% of construction firms face challenges filling positions, and it is not getting any easier. Over the next 12 months, over 65% of surveyed firms estimate that it will become even more challenging to find skilled labor. Also, according to a survey for the NAHB/ Wells Fargo Housing Index, cost and availability of labor topped the list of problems plaguing the industry in 2019.
Despite the declining supply of laborers, the demand for construction is still very high. For construction companies, that means looking for creative solutions for mitigating the current shortage. Construction companies have tried to overcome the deficit and lure laborers away from other companies by increasing the hourly pay, with the average in 2019 rising to a whopping $31.49 an hour. However, growing hourly wages isn't enough.
As a result, construction companies are boosting efficiency by using technology on the job site; according to AGC, 32% of construction companies have invested or will invest in equipment to reduce their need for laborers. Construction companies will need to use labor-saving equipment in the future if they want to remain competitive and survive.
Buying the Right Equipment
If you look at any significant construction equipment website, you can see an overwhelming catalog of machines and equipment you can purchase. Rather than make a quick decision, it is essential to take a step back and find which product you need to maintain a competitive edge.
An excellent place to start is speaking to local rental houses; they often have the latest equipment on hand and know what might work best. Of course, you should always conduct your research online; there is plenty of resources and testimonials to help guide your decision.
Our recommendation: try the equipment before you buy, whether at a rental house, through a manufacturer representative, or on an onsite demo from the manufacturer.
Operating costs
Consider conducting a thorough cost savings analysis. It will help to understand the upfront costs, operations cost, and long-term maintenance and repair costs. When you've figured out this number, compare it to the cost of hiring an equivalent amount of labor.
While sticker shock is a normal response, it is necessary to look at the long-term costs; many construction owners find that they stand to save a great deal over a year despite the initial cost. For example, when it comes to electric construction equipment, the upfront cost generally exceeds its diesel counterpart. However, diesel equipment has much higher operating costs when compared to battery-powered equipment. Fuel is much more expensive and requires more frequent repair and maintenance due to many wearable parts. Even though it is more costly initially, the equipment saves money in the long run.
Next Steps
The construction industry is quickly changing, and to better compete in the marketplace, many companies will have to update the way they run their business. Labor costs are increasing and will continue to grow in the foreseeable future. Meanwhile, there has never been a better time to invest in technologically advanced construction machinery. Get a leg up on the competition and start investing in technology today.
