It’s not news that there has been a chronic labor shortage in the building industries for many years. According to NAHB Chief Economist Robert Dietz, “The overall trend for open construction jobs has been increasing since the end of the Great Recession.” If you are struggling to find and keep building laborers—you aren’t alone. Luckily, there are several ways to use technological innovations to optimize your building supply businesses’ staff.
Recently, pandemic business disruptions complicated matters. Jason Parchomchuk at Epicor Software explains, “Now, the supply chain is in disarray—lumber prices have gone through the roof.” Plus, labor shortages are expected to intensify going into 2021.
But these issues did not originate with the recent pandemic. The ongoing mass exodus of retiring baby boomers increased even more in 2020. Lack of staff causes delays in the workflow—sometimes for months at a time. The challenges are compounded by many tedious tasks your workers must get done, but slow down revenue potential. “Until we have a better-trained, more-skilled workforce, which is not really out there, you’re going to have a lot of these positions open. It’s a challenge,” says Steve Rosen, CEO of Resilience Capital Partners.
The younger workforce, Generation-Z and Millennials, are less likely to seek opportunities in the LBM industry because their ideas of what these jobs are is outdated. Forbes reports that construction, “conjures up images of a grubby factory and low-paying work.” In reality, it is an increasingly high-tech field. Yet the industry is marred by an awareness gap that causes younger generations to skirt these positions. According to a 2018 Deloitte study, it is estimated that as many as 2.4 million general manufacturing jobs will go unfilled by 2028.
But there is hope. Technology is the language of Generation-Z and Millennials, so they can be enticed with promises of a tech-forward working environment. Additionally, technological advancements help you get the most from the employees you already have. So, even with a labor shortage, you can keep up with demand. Here’s how:
AP Automation takes care of time-consuming tasks like invoice entry and matching. This frees up your office employees to broaden their skillsets. For example, an employee in accounts payable can be cross-trained in accounts receivable—creating more profitability for your business. Missed revenue opportunities will be a thing of the past.
Warehouse management systems provide real-time inventory tracking to optimize staff in the yard. Staff are guided on the most efficient sequence to perform tasks such as picking and putting away materials, and inventory usage history is utilized to suggest purchasing. This will help ensure you have the right quantities of the correct products on hand, and stops the over or under ordering of materials.
Parchomchuk points out how integrated estimation tools are a game changer from the shop floor to the customer: “You have phases you need to ship out—last week the first floor joist materials were shipped, so the first floor framing materials are required this week. This allows you to track your customers projects for them, and you can follow-up with customers to be sure they’re progressing along with the project as well.”
eCommerce has boomed in the last year. Customers access online portals where they can self-manage their accounts. The sales and accounts receivable teams save time because they need to handle fewer questions from customers and can focus on relationship building interactions with key accounts. eCommerce allows customers to create their own orders online at any time of day, without requiring the business to be open. Online orders are funneled into the system for handling by the sales team. As a bonus, Parchomchuk notes, customers report more freedom and satisfaction when eCommerce is available.
Remote work opportunities became the norm in 2020, a shift that is anticipated to continue. “Our best estimate is that 25-30% of the workforce will be working-from-home multiple days a week by the end of 2021,” says Kate Lister, President of Global Workplace Analytics. Not every task needs to be handled on the warehouse floor, and cloud-hosted platforms are accessible from anywhere. Accounts payable, accounts receivable, office management, and sales have potential as remote opportunities. This widens the potential pool of candidates as remote employees do not need to live near the facility.
Before you had to know what a 2x4 is; now you don’t, so training is minimal.
Boomers are retiring at light speed, so even with technological advancements, need for laborers will remain high. Unemployment is expected to remain at unprecedented levels for several years, so this is an opportunity entice a younger workforce. Generation-Z and Millennials seek out innovation, so the more tech-forward your business is, the more appealing these positions will be. Plus, the use of cutting-edge management systems means green laborers can start immediately. “They don’t need to have knowledge about the industry or the materials,” says Parchomchuk. “The warehouse management system tells them ‘pick this one, pick this many.’ They don’t need to know any of the details—before you had to know what a 2x4 is; now you don’t, so training is minimal.” The potential hiring pool is increased, and workers can get up and running immediately which saves time and resources.
Technological solutions help ease the growing labor shortage for your business. Warehouse management systems automate and streamline project management from start to finish. Time is freed up so your employees can expand their skillsets, helping to boost profitability. Seeking remote staff opens the pool of potential hires beyond the geographical location of the shop floor. Finally, a tech-forward environment will entice the young and tech-savvy—and these green workers can start the job with minimal training.
In fact, technology can help you with every area of your business so that it grows with builder confidence and demand. Learn more with our free eBook: A Booming Time for Builders and Their Suppliers.
