Tag Archive for: Construction

Labor shortage, small business lending, economy

Which Industries Are Getting Hit Hardest By The Labor Shortage in 2022

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The labor shortage remains stubbornly high for businesses across several different industries despite the high number of job openings, even as many predict that the current recession will eventually level the playing field between employers and workers. Small business owners continue to feel the brunt of the shortage, as many of them can’t compete for workers in the labor force with larger competitors when it comes to salaries. 

So which industries are getting hit the hardest in terms of unfilled job openings and worker shortages? Based on information gathered from the Bureau of Labor Statistics, the worker shortage continues to affect companies with both hourly and full-time workers for different reasons. Here are some of the most impacted industries.

Accommodation and Food Services

Restaurants had a quit rate of 7.6% in September 2022 – the highest of any industry measured by the BLS – with 193,000 job openings compared to 139,000 new hires, leaving 60,000 job openings. These include table servers, cooks, bartenders, and other staff. The National Restaurant Association (NRA) predicts the shortage will continue for the rest of this year and into 2023. 

Restaurants laid off thousands of workers during the COVID-19 pandemic, and those workers have been slow to return. The reasons include low wages – the federal minimum wage for tipped workers is still $2.13 per hour (the NRA, ironically, has lobbied Congress every year for a decade against raising that wage). Restaurant jobs also often require long hours, low pay, and no benefits. According to a study by Blackbox Intelligence and Snagajob, 15% of restaurant workers left the industry during the pandemic to move into different industries that offer higher wages and benefits, such as education, warehouse jobs, and starting their own businesses. 

Retail Trade

Retail workers had a quit rate of 4.9% in August 2022, with job openings outpacing new hires by more than 25,000. This follows the laying off of over 2 million retail trade workers due to store closings at the height of the COVID-19 pandemic. Amazon predicted in a recent report that it could run out of warehouse workers by 2024. Many retail workers laid off during the pandemic decided to switch careers or retire. 

Despite the median salary of retail workers increasing to $18.50 per hour in August 2022 (from $14 per hour before the pandemic), a study by Cogsy showed three main reasons retail stores are having a hard time finding workers:

  1. Low compensation. The retail industry has never been a high-paying field, and most jobs don’t provide benefits.
  2. Customer-facing retail workers are usually the first people to be laid off during an economic downturn – that job instability was magnified by the pandemic, and
  3. Difficult working conditions. This has been a problem facing retail workers for decades, especially since the “just in time” inventory technique (companies being lean on inventory based on seasonal expectations) was invented to cut costs at large retailers. This inventory technique generally made it possible for retailers to cut the hours of retail workers and put them on often unpredictable, makeshift schedules. 

Transportation

The transportation industry, including truck drivers and rail workers, saw a 4.6% quit rate in August

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A nationwide shortage of truck drivers has contributed to supply chain disruptions and inflation.

2022, as the US faces a shortage of about 2.6 million truck drivers overall, despite a general increase in pay. This shortage not only affects the roughly 3.1 million transportation and warehouse small businesses in the US, but it also is one of the root causes of the recent global supply chain disruptions. 

Like with many industries, the worker shortage in transportation existed before 2020 but was compounded by the global pandemic. According to business consulting firm MossAdams, the primary causes of the shortage isn’t salary, it’s due to the fact that the job requires long hours away from family, the fear of contracting COVID-19 and the fact that the transportation workforce is aging, and few millennials and GexXers are willing to replace them. 

Healthcare

Industries that require skilled workers are also facing a massive labor shortage, and salary may not be the overriding reason. In August 2022 there were 1.7 million job openings in this industry, particularly for nurses, while only 717,000 were hired. According to the American Medical Association, the country will also face a shortage of some 38,000 to 124,000 primary care doctors over the next 12 years, even though salaries in these professions are typically higher than the national median household income. 

According to the AMA, many medical school graduates are becoming discouraged by the fact that independent primary care doctors’ offices are being quickly swallowed up by large health care providers. That, combined with doctor burnout from the pandemic; rising medical school debt; increased medical malpractice insurance premiums, and the red tape that independent doctors often face when it comes to sharing electronic health records, many hopeful doctors have been discouraged from entering into the industry.

One-Third of Nurses Plan to Leave

A study by Fierce Healthcare showed that one-third of nurses across the country plan to leave their job over the next year, exacerbating a problem that the healthcare industry has been suffering from since before the pandemic – a national nurse shortage. Last year, BLS data showed that the country is going to need an additional 275,000 by 2030. Despite a median national income of over $82,000 per year for registered nurses in the US, many are quitting due to burnout, according to the study. 

Most healthcare facilities were already suffering from a high patient-to-nurse ratio, and COVID-19 greatly expanded that number. The study also found that 65% of nurses endure constant beratement, and in some cases, physical assault, from patients. Most don’t feel appreciated by the doctors they are assisting. This is compounded by a current shortage of nursing schools and faculty in the US.

Construction 

The quit rate among construction workers was 4.7% in August 2022, and in the same month, the industry was short by over 33,000 jobs. Cornerstone, one of the leading publications for the construction industry, expects that the current overall shortage of 430,000 construction workers in the US will expand over the next two years, as new construction projects will increase with the passage of the Infrastructure Investment and Jobs Act in 2021.

Several factors are contributing to the shortage, according to a study by Cornerstone: 

  • First, many construction workers were forced out of their jobs during the pandemic and decided to retire. In total, 40% of the construction workforce is expected to retire over the next decade. 
  • Second, there aren’t enough carpentry trade schools in the US to meet the increased demand for skilled construction workers – contractors, designers and workers with the knowledge to build specialized construction projects. 
  • Third, many contractors in the US have yet to embrace digital technologies to make projects more efficient, on time and on budget, thus slowing down the number of projects that they are qualified to complete.

To compound that, wages are still relatively low for construction workers – the median annual salary for a construction worker was only $39,190 as of September 2022. The pandemic made working conditions hazardous.

How Can Companies Combat Labor Shortages Going Into 2023?

Unfortunately, for small business owners struggling to find workers, there are no easy answers. The labor shortage is persisting, and it appears that it isn’t just a passing fad – it can only be solved by making permanent changes. Study after study has shown that employees in some industries are demanding better pay and benefits, while in other industries, workers are demanding a better work-life balance and better working conditions. The best solution to this problem is to examine the workplace you are providing for employees and look for ways to improve it.

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Construction: Make Sure Your Company is Prequalified!

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The arduous task of complying with risk management guidelines has come to the forefront for construction firms, especially subcontractors. In particular, the advent of prequalification software, which more contractors and agencies are using to keep a database of prequalified construction firms. This software makes it easier for contractors and government agencies to launch invitation-only bids for new construction projects, thereby emphasizing the need for small construction firms to make sure they are in those databases. 

This news is especially important for smaller construction companies, as the new housing construction market remains hot and the federal government is poised to issue a bevy of new contracts for specialized construction projects due to the passage of the Infrastructure Investment and Jobs Act.

If you’re a small construction company, here are some tips on how to make sure you are included in construction firm and government databases of contractors as a pre-qualified company and stay in the running for new projects.

Up Your Marketing Game

An upcoming surge in federal contracts and the continued strong demand for new housing will benefit the construction industry for the foreseeable future. Basic marketing techniques still apply: you need an optimized website; great content, a strong social media presence in which you target the exact audience you wish to do business with and monitor your web traffic and responses, among other things. 

You also most likely need to do more outreach to specific contractors, especially in your vicinity, and government agencies seeking to bid out contracts to make sure your company is on their radar. Setting up email pitches and sequences for potential clients, for example, could go a long way in making sure people know about your company. Do some digging to find out who the decision-makers are at various government agencies that may outsource construction projects (it could be your local municipality, a state government branch or a federal agency) and contact them to make sure you are on their radar screens.

IAmBuilders.com has a great web page on how to market your construction firm, and the video below from small business coach and influencer Mike Claudio also gives great tips. You should follow as many of those steps as you can to make sure your company is visible to the public. 

Make Sure You’re Prequalified

The task of prequalifying is complicated, especially now that it’s time for what construction industry experts call the “Great Expiry” – the period between April and June when most pre-qualifications expire and must be done again. The steps that need to be taken to prequalify are involved, but necessary. Clients and contractors want to cut down on the risk of project delays, shoddy work and going over budget. 

As the owner of a construction company, you must show potential customers and contractors that:

  • Your company is licensed for the particular job. Getting licensed for a particular project isn’t difficult in most states. Double-check with the customer or the contractor whether the project requires licensure. 
  • Make sure you have the proper experience. Obviously, different construction projects may require different skills. Constructing a new modern office complex or home for a private customer will require different expertise than, say, building or repairing a road or a bridge for a state or local government. Make sure you have experience to bid on a particular project, and if your company does not, make sure you hire workers who do have that experience. Having experience will give some reassurance to the customer or contractor that there won’t be any unforeseen delays or shoddy workmanship.
  • Make sure you are following proper safety protocols. This sounds simple but can mean the difference between winning and losing a bid. Make sure you are compliant with the federal Office of Safety and Health Administration’s (OSHA) safety guidelines for construction projects. This means taking steps to prevent fires and explosions, accidental falls and other injuries. 
  • Demonstrate that your company is financially stable. Has your company ever filed for bankruptcy protection? Do you have the assets to pay your workers adequate compensation to ensure that they won’t walk off the job due to low pay? Ensuring this will indicate to your customers that your company has the resources and inventory to complete the job without going over budget.
  • Demonstrate strong payment history. For any construction project to go smoothly and without delays and extra costs, it’s important to know that subcontractors and suppliers will get paid on time and in full. Legal claims for unpaid construction work, called a mechanics lien, can significantly delay a project. Also, don’t forget that the Little Miller Act requires that prime contractors post a payment bond backed by a surety company that guarantees the finances necessary to complete a construction project. Make sure that this bond is lined up when you apply for a project bid, be it with a private customer or government contractor. 
  • Get your financing lined up. Using financing to ensure that your construction company can complete a project is not necessary for prequalification, but it can ensure that your company is ready to take on a project. Equipment financing is a form of lending that can ensure you have the most modern construction equipment to complete a task. You can also use purchase order financing to make sure that your suppliers get paid on time without restricting your cash flow, and a line of credit can make sure your workers get paid on time. You may also wish to use invoice factoring in case your contractor or customer is slow to pay those invoices. 
  • Respond to Customer Feedback! As we are now living in the “Feedback Economy,” most consumers (including your future clients) will check Google Reviews, Angie’s List, Yelp and other apps in which customers provide feedback on their experiences with businesses. If your construction business has been reviewed, make sure you respond to those reviews. Negative reviews are especially important to respond to – when you respond to them, thank the customer for their feedback and state clearly that you’re making the necessary changes to improve your business based on their feedback.

Get to Know Prequalification Software

Being qualified for a construction job and letting the world know that you’re qualified are two different things. With the increased popularity of prequalification software, you need to get to know what these programs are looking for to be included in bids. Some of the most popular prequalification software packages out there being used by construction firms include:

These software packages emphasize slightly different aspects of the prequalification system. For example, FAST Builder focuses a lot on scheduling and pricing, while ConsensusDocs focuses more on contract details and design. Chances are a contractor or client is using one of them to build a database of qualified construction companies for various projects, so it’s important to learn the best ways to respond to each one so that you can put your best foot forward at bidding time. 

Don’t Miss Out!

The construction industry is set to be in even higher demand over the next few years as more government contracts will be coming out for bid. Make sure your company is visible, qualified and ready to go when projects are put out for bid.

Biden’s New Orders Expedite the Need for Contractors to go Green 

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The importance of going green just became even more important for small construction companies, as President Joe Biden signed three executive orders on June 6, 2022 aimed at boosting clean energy construction projects and the use of domestically manufactured clean energy technology. 

What the Orders Entail

President Biden’s new executive orders expedites the need for construction companies to become eco-friendly.

Specifically, the orders require the US Dept. of Energy to deploy the use of the Defense Production Act of 1950 to expand American manufacturing of solar panel parts, environmentally friendly building insulation, heat pumps, equipment for making clean power-generating fuels, and critical power grid infrastructure. Federal construction contracts will also require local contractors to use eco-friendly materials. 

According to an announcement from the White House, the order will encourage the use of project labor agreements that offer wages “above and beyond the prevailing rate and include local hire provisions.” The order will also encourage clean construction projects in low-income areas burdened by legacy pollution.

The orders also place a two-year moratorium on tariffs being placed on imported solar panels that the US imports from countries such as Cambodia, Thailand, Vietnam and Malaysia, from which the US gets 80% of its solar panels. The new orders aim to help achieve the Administration’s ambitious goal of eliminating carbon from the nation’s power supply by 2035. 

Why it Matters

Aside from, well, protecting the environment, the orders emphasize the urgency of contractors and subcontractors to demonstrate that they can handle green projects. This will be especially important as the federal government begins to search for contractors to handle a bevy of upcoming construction contracts as a result of the passage of the $1.2 Trillion Infrastructure Investment and Jobs Act passed late last year.

Put simply, it would behoove small construction companies to show that they have expertise in government-led clean energy construction projects. Aside from the executive orders, the construction industry – one of the least green industries in the US – needs to start making a push toward becoming green to survive going forward. This has become more than just a trend – currently, the building industry uses nearly half of all electricity used in the US, according to Research Gate, and more than 28% is used by the transportation industry. ComfyLiving.net estimates that green construction projects will reach nearly $100 billion by 2023 in the US.

Actions to Take

There are several ways small construction companies can certify themselves as being proficient in green technologies. 

  • Get Green Certified. Construction companies can receive their “green certification” through either the Green Building Initiative (GBI), which assists the National Association of Home Builders to promote sustainable energy building guidelines for residential structures, or the Leadership in Energy and Environmental Design (LEED), which is a rating system for construction eco-performance.  The two programs use performance-based codes to ensure that construction companies use design, construction, tools, and processes that are up to state and local green codes. The International Green Construction Code (IgCC) often sets these requirements as well and is followed by both LEED and GBI. This certification is a quick way to let government agencies and private clients know that you are environmentally conscious, as well as an excellent construction company.
  • Use Recycled Construction Materials. Using recycled materials to construct a home or

    Using environmentally- conscious materials such as eco-friendly insulation will go a long way towards making your construction company “green.”

    building will go a long way in letting your clients know that your company is serious about being green. These materials can include recycled concrete, wood and steel, and involves the use of eco-friendly materials such as plastic composite lumber, wool bricks and polyurethane rigid foam.

  • Offer Green Solutions. Your company can make a lasting impression on customers by offering various green solutions when building a home or office building. Nearly half of the power used by homes and office buildings is for heating and cooling, so giving them greener and cheaper options for electricity and insulation will show that your construction company is environmentally conscious.  Installing solar panels would probably be the most obvious way of making a home or office building more energy efficient. You can also use eco-friendly insulation so as not to waste hot or cold air through a structure’s HVAC system. Other options include offering to install programmable thermostats, water-conserving plumbing, green HVAC systems and offering to install low emissivity (Low-E) windows.
  • Use Energy-Efficient Construction Vehicles. It may be time to replace and update your equipment with environmentally friendly machinery. Construction equipment manufacturers such as Bobcat, Volvo, John Deere and Caterpillar already produce construction equipment such as backhoes and bulldozers that have economy modes and on-demand throttles installed in them to reduce their carbon footprint. These companies are also in the process of developing electric (instead of gas-powered equipment) to become more eco-friendly. 
  • Show Concern for Your Customers’ Health. Present manufacturers’ reports on the materials you are using to your customers to inform them that you are using materials that will benefit their health and wellness, especially when it comes to the air quality in their homes or buildings. Such reports are produced by the Health Products Declaration Page site run by SCS Global Services, and the Environmental Product Declaration site.
  • Use Energy-Efficient Processes. Using 3D printing to show models of your projects to customers and blockchain technology to centralize data from contractors, subcontractors and customers to prevent wasting hundreds of pages of paper. You can also use construction software produced by such companies as ProCore and Worksuite to make projects more efficient by managing material procurement to cut down on waste and save time, money and resources. 

Market Yourself as Green

Making your construction company green won’t mean much if customers and potential contractors don’t know it. It’s important to make the necessary changes to your marketing strategy to inform future customers and government contractors that you meet eco-friendly standards. 

Make changes to your website and advertisements to let the world know that you’re eco-friendly. Also, make sure that one of your pre-qualifications is that your company adheres to environmentally friendly standards. This could very well mean the difference between landing and losing a client. 

Don’t Get Caught Off-Guard

It’s obvious that more state and federal agencies will require contractors and subcontractors to follow eco-friendly standards, especially with the passage of the Infrastructure and Jobs Act. It’s crucial that your construction company takes the necessary steps to let the world know that, in addition to being an excellent construction company, that you’re also environmentally conscious.

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Does Your Website Make You Susceptible to an ADA Lawsuit?

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Most small business owners know that their physical stores or offices must be compliant with the Americans with Disabilities Act of 1990 (after all, they’ve had more than 30 years to learn and comply with the law), but did you know that despite your efforts, you may still be susceptible to an ADA lawsuit? 

That’s because the ADA itself obviously predates the advent of the internet, and therefore no one is really sure how much legal liability risk you’re carrying as it relates to your website..

Gil vs. Winn Dixie

When the 11th Circuit Appellate court ruled in April that the ADA does not entirely apply to websites in

the Gil v. Winn Dixie case, it gave some short-term clarity on the issue. However, while the court ruled in favor of the business, the case generally put a renewed spotlight on the ambiguous subject of whether business websites should be required to accommodate people with physical and mental impairments. 

In Gil v Winn Dixie, a customer sued the grocery chain because its website did not accommodate visually impaired people, and therefore treated disabled people as “second class shoppers,” according to the plaintiff’s affidavit. In short, the plaintiff, Mr. Gil, claimed that he was given less preferable treatment than non-disabled customers. 

The 11th Circuit court, which covers Alabama, Georgia and Florida, ultimately ruled that Winn Dixie’s website did not fall under “places of public accommodation” under Title III of the law, and therefore its website is not required to be accessible to impaired or disabled people, even though its brick-and-mortar stores do need to be ADA compliant. 

Jury Still Out, Despite Decision

It’s important to note, however, that the judges’ decision in the case was somewhat narrow in its scope. Although they ruled in Winn Dixie’s favor, they did so largely because the company’s website is not a point-of-sale. The judges noted in their decision that there was nothing to prevent Mr. Gil from making transactions at any of Winn Dixie’s physical stores, which are ADA compliant. 

Legal experts have pointed out that if the website were a point-of-sale and disabled people could not conduct transactions on it (i.e., the customer had to renew and pay for a prescription on its site), the decision may have been different. So if your business has a website in which customers can make purchases, you may still face legal liability risk if your site is inaccessible.

Why the Case Matters

In recent years, website accessibility lawsuits have skyrocketed as the legal community continues to wrestle with the issue of whether websites should be ADA compliant. 

According to a study from UsableNet, the number of ADA-related digital lawsuits climbed to 3,550 in the US in 2020, up from 2,314 in 2018. Gil v Winn Dixie, however, was one of the few cases that made it to the Appellate Court, and while the court’s ruling ultimately favored businesses, it also puts a renewed spotlight on how companies – especially small businesses that may not be able to afford costly legal battles – should take steps to avoid sometimes-frivolous ADA lawsuits by making their websites accessible to people with disabilities. 

Last year, the 116th session of Congress ended up voting against the Online Accessibility Act which would have amended the ADA to include requirements to make websites accessible, but with a new Presidential administration and the fact that Senate Democrats now hold a slim majority, the issue could be taken up again shortly.

What are the Current Laws?

ADA requirements for physical stores and offices have been around for nearly three decades and are well-known, but – barring legislation from Congress – the question of how the ADA applies to websites is still murky.

In 2010, the US Dept. of Justice passed the Americans with Disabilities Act Standards for Accessible Design, mandating that electronic and information technology, such as websites, be accessible to those with disabilities such as the visually and hearing-impaired. The act does not, however, cite specific steps companies need to take to make their websites accessible. 

Today, many companies use the Worldwide Web Consortium’s (W3C) Web Content Accessibility Guidelines (WCAG) version 2.1 as a guide to making sure their sites are up to standard. While WCAG is not a legal document, W3C is an international community of web developers that is respected around the globe.

Avoiding an ADA lawsuit

While the issue is still ambiguous, if you’re a small business owner, it’s probably best to err on the side of caution when it comes to your website, lest you find yourself having to pay exorbitant legal fees in order to fend off a lawsuit. 

If you’re concerned about your website and are seeking to make it ADA compliant, you may wish to consult with an attorney. There are also plenty of software packages out there that can assist you in making sure your site is accessible to those with disabilities. 

Screen readers for your website can help you avoid a costly ADA lawsuit.

The first thing you may wish to do is invest in a screen reader for your site. A screen reader is a software program that allows blind or visually impaired individuals to read the text that is displayed on a computer screen via a speech synthesizer or a pad that will translate text on the screen into braille. Many of these software packages are available online and are free.

Following WCAG 

Additionally, your best bet is to carefully read WCAG 2.1 and make sure that your website follows its guidelines. You may wish to do this with an attorney. There are 4 basic principles to WCAG. A website must be:

  • Perceivable – Your website must be perceivable in terms of touch, sound, and sight. This is where a screen reader would most likely come in handy.
  • Operable – A user, regardless of their disability, must have ways to operate and browse your site. For instance, someone with motor difficulties should be able to use a keyboard instead of a mouse.
  • Understandable – Your website must use clear terms, simple instructions, and be able to explain complex issues.
  • Robust – Your website must use recognized standards, such as clean TML or CSS language so that users do not have to rely on additional technology besides their computer to use your website. 

Other Suggestions

Aside from the four principles stated, there are other actions to take to follow WCAG 2.1. On your site, you should make sure to:

  • Create alt tags for all images, video and audio files so that users with disabilities can read or hear alternative descriptions of your content.
  • Create transcripts for video and audio content so that hearing-impaired users can easily access your content.
  • Offer customers alternatives when they run into input errors. If a user is having difficulty navigating your site because of their disability, it is your responsibility to offer recommendations on other ways to navigate to the content they are looking for.

While making sure your website is accessible to all users will take time and energy, it is an exercise worth undertaking. First, it will enable you to avoid a costly lawsuit. Second, showing the world that you’re empathetic to people with disabilities, and making your site accessible will improve your public image. Third, it could even increase your customer base to include more people with disabilities.

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