Growing your construction business through contingent labor

February 10, 2022

The smartest companies have learned to deftly adjust to changing production levels through the use of contingent labor—turning fixed costs into variable costs.

A general contractor working on a large multi-family job was in a pinch because he had to fire his framing contractor. He needed framers—now. And framers who owned a particular kind of air compressor. Before this, he had equated temporary labor to day labor—unskilled and unreliable. They didn’t realize they could hire highly skilled and experienced carpenters from a temp agency. And they found a temp agency that could screen the framers for their skill as well as whether they had the right kind of compressor, among other specifics capabilities.
A contractor handling all the low-voltage work for a specialty grocery chain found it hard to keep a crew busy full time, as the workload fluctuated week to week and season to season. He found a skilled trades temporary partner who could fill in with workers—five or six, sometimes 10 or more—all over the market. When the winter slowdown arrived, he didn’t have to go through the headache and heartache of a layoff. He just called his staffing partner and told them which workers would be off, for how long, and that he expected to get them back out when work picked back up again. In the meantime, the staffing partner filled in the gap for the workers, and they were available to go back to working the grocer’s jobs when the contractor had the work.
A contractor at a large hospital job was getting hammered by deadlines. Inspections and walk-throughs loomed. What was getting in the way of progress was all the clean-up that needed to get done. He found a temporary staffing agency that provided a small army of skilled laborers to do clean-up—people who had specific skills with specific tools. Their contact at the staffing firm would call regularly to see how the workers were performing and made regular safety inspections to make sure, for example, everyone was wearing their PPE. The contractor ended up hiring several of the workers full-time.

Contingent workers make up around 2 percent of the overall US workforce. The American Staffing Association reports that the staffing industry makes a vital contribution to the U.S. economy while servicing businesses across virtually all industries. Staffing provided jobs and career opportunities for about 16 million employees per year pre-pandemic (13.6 million during the pandemic).

In the cyclical manufacturing and logistics sector, use of contingent works runs as high as 20 percent to 30 percent for some roles. The average for construction companies is 11 percent.

Where does your construction company land?

Have you learned the benefits of hiring contingent workers when you need more skilled tradespeople?

It’s really a no brainer.

Turn fixed costs into variable costs

With contingent labor, you only pay for the workers you need when you need them. You’re not paying people to stand around on a construction site. Temporary labor employment offers you the flexibility you need to serve your clients. You can grow your business as you need, for a certain amount of time, and then shrink personnel and costs back down. You can look for personnel to fill certain roles without committing to individuals as full-time workers.

Reduce overtime pay

Rather than putting additional demands on current permanent staff, an employer can use a staffing agency to handle the extra work during busy times. Better that than burning out your full-time employees.

Goodbye hiring hassles

Think about going through that mountain of resumes and applications. The drug screenings and background checks. A good temporary agency will handle all of that. Most temp agencies have pools of qualified individuals that they sought out and already interviewed. Also, the tradespeople they send you will all be highly skilled—so no worry about training.

Reduced administrative costs

Many temporary labor firms will handle the bulk of the administrative costs related to the workers themselves. A good constructive staffing agency will handle all the employment-related tax filings, obtaining employee benefits. Legislative/regulatory requirements—for example, the Affordable Care Act—can make it difficult to remain compliant. A good staffing agency handles the regulatory and legal requirements for hiring staff.

No more bad hires

Bad hires are bad for business—they cause productivity to tank and waste money on advertising and training for a replacement. If a temporary hire turns out to be a valuable asset to your company, you can offer them a permanent position within your company. When you work with a staffing agency to hire temporary employees, you can use a temporary assignment as sort of a “working interview”—making sure he/she can handle the job and that he/she is a fit for your culture.

Wrapping up

Temporary staffing can be used by big and small businesses alike in almost any industry. On average, construction companies make 11 percent of their workforce temporary, gaining a flexibility that allows them to respond to the unforeseen ups and downs of the construction industry.

Did you like this post? Try this one: How can contractors find skilled tradespeople?

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A group of construction workers wearing hard hats and safety vests are smiling.

Overcoming Common Challenges in Urban Commercial Construction

March 27, 2024

Urban commercial construction brings a whole set of challenges that contractors in the suburbs and rural areas never have to consider. But revitalization is extremely important for urban cores to survive and thrive, so these projects can be quite lucrative. Here are some common difficulties, along with tips to overcome them and remain on good terms with the neighbors. Tight Spaces In urban areas, there simply isn’t as much space to move around. You might have difficulty getting some of your heavy machinery to fit, or your subcontractors could be trying to paint an apartment the size of an average broom closet. Rise to the challenge by thinking outside the box. Carefully survey the entire space before you get started, and develop a detailed project plan in advance. Be sure to include entry and egress routes, alternative ways of getting things done, and even subcontractor schedules that minimize the number of people working in the same space at the same time. Local Regulations Many urban areas have byzantine construction regulations that are confusing and hard to follow. Take the time to research these regulations and understand what you need to do. Then, boil it all down into a simple, easy-to-read document that you distribute to everyone involved. Get to know the local authorities and find someone whom you can call whenever you have questions or concerns. Make sure your team members are ready to pivot if you find out that you missed or misinterpreted something significant. Always have a backup plan. Community Engagement Transparency can go a long way toward getting the local community on your side. Let people know what you’re working on and how it will benefit them. Explain why the project is happening, how long it will take, and whether it will impact their costs (such as taxes). If you’re redeveloping a historic building, be especially sensitive to the concerns of preservationists and meet with them separately to explain your plans. Noise Control You won’t endear yourself to the local community if you’re making a lot of noise when residents are trying to sleep. And remember, even if you’re working on an office building, there could be luxury apartments right next door. Use sound baffling measures to reduce noise. Whenever possible, work during daylight hours. Minimizing Disruptions No matter how careful you are, urban commercial construction projects are inherently disruptive to the neighborhood. But you can mitigate this with careful planning. Try not to block streets during morning or evening rush hours. Be considerate of any upcoming local events. Do your best not to interfere with vehicular or pedestrian traffic patterns. When you do need to create a blockage, be sure to put up signage and work as quickly as you can without compromising safety. Need a Skilled Trade Professional? At Great Lakes Skilled Trades, we specialize in connecting contractors with professionals in the skilled trades throughout the Great Lakes region. If you need a skilled tradesperson, learn more about our services, and then contact us today!