The construction industry is facing a crisis: a severe shortage of skilled labor. With an aging workforce, declining numbers of young workers entering the trade, and increasing demand for new projects, contractors are struggling to find and retain qualified employees. Companies need a more comprehensive approach that includes applicant tracking systems (ATS), job board integrations, and employee referral programs to build a strong workforce efficiently.
Employee referrals, job boards, and a strong company culture have proven to be one of the most effective recruitment strategies across industries, and they hold particular promise for construction companies looking to build a strong, reliable workforce. Here’s how a complete recruitment and retention system can help address the skilled labor shortage in construction and why platforms like Refered make it easier than ever to implement.
The Skilled Labor Shortage in Construction
The construction industry has been grappling with a labor crisis for years. According to industry reports, nearly 650,000 additional construction workers were needed in 2022 to meet demand. Several factors contribute to this challenge:
- Retirement of experienced workers – A significant portion of the construction workforce is aging out, leaving gaps in experience and expertise.
- Lack of new entrants – Fewer young workers are pursuing careers in the trades due to societal emphasis on college degrees over vocational training.
- High turnover rates – Many construction businesses struggle to retain employees, which exacerbates the hiring problem. Reducing construction turnover is a crucial step toward solving this problem.
Why Employee Referrals Work in Construction
Employee referral programs offer a targeted and cost-effective solution to these challenges. Here’s why they are particularly effective for the construction industry:
1. Faster and More Reliable Hiring
Referrals significantly reduce the time-to-hire compared to traditional job postings. Employees are more likely to recommend candidates who are qualified and a good fit for the company culture. At the end of the day, referrals streamline the recruitment process.
2. Higher Retention Rates
One of the biggest pain points in construction is employee turnover. Referred employees tend to stay longer because they already have a connection within the company and a better understanding of the work environment.
3. Improved Workforce Quality
Current employees will only refer individuals they trust and believe can perform well, leading to higher-quality hires. This ensures a team of skilled, dedicated workers who can contribute immediately to ongoing projects.
4. Lower Hiring Costs
Traditional recruitment strategies can be expensive. Job postings, recruiters, and lengthy hiring processes drain resources. In contrast, referral programs incentivize employees to bring in new hires at a fraction of the cost. How much does it cost to hire a new employee? breaks down the expenses and shows how referrals offer significant savings.
5. Enhanced Workplace Morale and Engagement
A referral program creates a sense of ownership among employees. Workers feel more engaged when they help shape their team, leading to increased job satisfaction and productivity. Encouraging employees to refer a friend leads to a win-win situation for both the business and the workforce.
How Refered’s ATS and Job Board Integrations Improve Hiring
Beyond employee referrals, Refered offers a robust applicant tracking system (ATS) and job board integrations to streamline hiring in the construction industry.
- Applicant Tracking System (ATS): Refered’s ATS allows construction companies to manage job applications efficiently, track candidate progress, and streamline hiring workflows. This ensures that the best talent is quickly identified and moved through the hiring process.
- Job Board Integrations: Posting job openings across multiple platforms can be time-consuming. Refered’s system automates job postings to major job boards, increasing visibility and attracting a wider pool of candidates.
- Data-Driven Insights: With real-time analytics, hiring managers can make informed decisions about which sourcing channels and hiring strategies are delivering the best results.
By combining employee referrals with ATS and job board integrations, construction companies can optimize their recruitment efforts and reduce the time it takes to fill open positions.
How to Implement an Effective Employee Referral Program
Starting an employee referral program doesn’t have to be complicated. Here are some best practices to ensure its success:
- Offer Meaningful Incentives – Cash bonuses, additional paid time off, or gift cards can motivate employees to participate.
- Make the Process Simple – A streamlined, user-friendly platform like Refered makes it easy for employees to submit referrals and track their rewards.
- Promote the Program Regularly – Remind employees about referral opportunities through meetings, newsletters, and signage at job sites.
- Recognize and Reward Successful Referrals – Public recognition and prompt rewards encourage continued participation.
For a detailed guide on setting up a referral program, check out our post on how to start your employee referral program.
The Role of Technology in Referral Hiring
Modern platforms like Refered simplify the referral process, allowing construction companies to efficiently track and manage employee recommendations. Integrations with payroll systems like Paychex ensure seamless payouts and rewards, further incentivizing participation.
Conclusion
The skilled labor shortage in construction is a complex challenge, but employee referrals, ATS, and job board integrations provide a practical and proven solution. By leveraging these tools, construction companies can build a more reliable, skilled, and engaged workforce. Implementing a well-structured hiring strategy with the help of platforms like Refered can be a game-changer for the industry.
If you’re ready to transform your hiring strategy and secure the best talent, explore how Refered can help your construction business thrive.
