3 Ways Home Builders Can Address Labor Shortages by Investing in Trade Partners

Hiring and retaining talent has been a widespread challenge across industries. What some are calling “The Great Resignation” is having an especially strong effect on industries experiencing high levels of demand due to the pandemic, including residential construction.

According to a report by Home Builders Institute (HBI), the educational arm of the National Association of Home Builders (NAHB), 61% of residential home builders reported a worker shortage in early 2021. The percentage is especially alarming relative to the acceleration of housing demand during the pandemic; when you consider the impact of labor scarcity on construction delays, which further increases costs, you can see how both housing supply and affordability are negatively affected.

While the solution to the trade shortage won’t come overnight, there are things builders can do to mitigate its effects in the meantime, namely ensuring strong partnerships with trades. Builders and their trades and suppliers need one another to survive and grow their businesses, which has become even more challenging in today’s market.

Although there is a trade shortage nationally, builders can take the necessary steps to prevent that shortage from affecting their company by becoming a builder trades want to work for.

How to Develop a Committed Trade Contractor Base

Builders that make the commitment to invest in building mutually beneficial partnerships, establish trust, and focus on communication will reap the benefits of having a committed trade contractor base willing to work for them when given a choice of which projects to take on. Here’s how.

1. Improve Communication and Collaboration

Once under contract, trades are no longer independent; they are responsible for building quality homes for you and your customers, so treating them as team members and stressing the interdependence of the trades is both obvious and critical to success. Team-building helps everyone function as a unit, boosting morale and building trust and mutual respect for each member of the team.

As a builder, put yourself in a trade’s or supplier’s shoes to ensure you foster a motivational environment that promotes positive work. Strive to create a culture of no blame, encourage initiative, and set high performance standards. It will be important to connect directly with trades from time to time to discuss what demotivates them and then make adjustments to correct the working environment.

Whether it’s during the creation of defined roles and responsibilities or through online portals dedicated to communication, transparency and teamwork can really transform relationships into partnerships between you and your trades. Construction meetings can be helpful for fostering a team aspect, but it’s important that these meetings are concise and issue-oriented so they optimize everyone’s valuable time.

2. Automate Repeatable Functions to Streamline Operations

When businesses use technology to automate mundane, day-to-day tasks, they are then able to focus elsewhere on the business, reducing administrative time and getting more jobs done in the field.

According to the 2021 State of SMB Digital Transformation Report by ECI Software Solutions, 65% of residential home builders identified contractor management/communication as an invaluable feature included in their enterprise resource planning (ERP) system.

Contractor management tools can help streamline work orders to the trades, consolidate scheduling, and oversee job payments and documentation. By offering these and other value-add solutions, you provide your trade partners with an opportunity for success and growth right off the bat.

3. Prioritize Training for Trades

Trades are often experts in their own line of work but may not have a broader understanding of the business or the technology that supports it. Providing trade partners with the resources to grow their knowledge of the business and technology shows you are invested in their well-being and growth and, in turn, sets the partnership up for success.

By taking the time to ensure trades are trained properly and understand their job requirements and the systems being used within the company, you enable them to streamline their own processes and become more efficient as well.

Unfortunately, the labor shortage is a hill builders will continue to climb as the shortage of skilled trades continues through the foreseeable future. However, as builders manage their day-to-day operations and strive to meet new-home demand, these adjustments can improve relations with their trades and, in turn, mitigate the strain associated with labor shortages.

Bob Cain is  the business unit leader for BuildTools and Bolt at ECI Software Solutions, where he is responsible for customer experience and support, business expansion, team growth, software development, and daily operations.