Business Case for Increased Diversity in Construction

Business Case for Increased Diversity in Construction

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The labor crisis in the construction sector has been a well-publicized problem and business leaders have turned their attention to attracting and retaining top talent. One of the ways in which businesses are attempting to attract talent is to make the construction industry more appealing to a diverse group of workers.
However, this has not been easy. For instance, even though women make up almost half of the workforce, they account for only 6.2% of the construction workforce. Here are why construction businesses should focus on diversity in future hiring and why diversity in construction teams can have a direct impact on the bottom line.

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Why the lack of diversity in construction is a problem

The talent pool is constantly shrinking

Hiring and retaining top talent has been a significant challenge for almost every industry but the shrinking of the talent pool has impacted the construction industry to a far greater extent. This talent shortage also comes at a time where construction demand is reaching new highs. To ensure high levels of operational efficiency, construction firms must hire more staff. 
However, this hiring tends to focus on a single demographic. This makes it extremely challenging for hiring teams to find workers at a reasonable price. These hiring challenges have a direct impact on how quickly construction teams can scale up operations to meet demand. Construction teams that focus on hiring a more diverse workforce have a greater pool of talent to search from and a higher likelihood of finding workers that fit their needs. 

Top talent prefers to work with diverse teams

As more young Americans enter the workforce, businesses must be sensitive to the changing needs of these workers. Millennials and Generation Z workers have different needs than workers of the previous generation. A recent survey by Glassdoor found that approximately 76% of young workers consider team diversity to be an important factor when evaluating job offers from potential employers.
If the construction sector remains as homogenous as it has been for the past few decades, it will become extremely difficult for them to attract workers of more diverse backgrounds. 

Business performance is heavily impacted by diversity or a lack thereof

Apart from the obvious impact that diversity can have on the workforce and the attractiveness of the sector, a more diverse team can also have a direct impact on a company’s bottom line. A diverse workforce can provide businesses with a more varied set of opinions, capabilities, and working styles. This can help construction teams find more efficient ways of meeting their goals. 
In ideal working conditions, this diversity is extended to executive teams, where varied opinions can have a direct and widespread positive impact on a construction team’s overall performance. A study by McKinsey & Company revealed that teams that are gender diverse tend to outperform financial expectations by 25% while ethnically diverse teams outperform expectations by 36%.

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How to attract talent from diverse backgrounds

Develop and maintain progressive diversity and inclusion policies

While hiring teams are constantly looking for new ways to hire the best workers from a rapidly shrinking talent pool, it is important that high-level decision makers set the tone for diversity and inclusion through effective policy making. The hiring mindset in the construction sector has not changed in decades and there needs to be significant effort from company executives to make up for the inertia that exists within the industry. 
These policies can come in many forms. Executive teams must review existing hiring policies and find the issues that have prevented them from hiring workers from more diverse backgrounds in the past. Once these issues have been identified and resolved, companies can take a more proactive approach to diversity through policies such as referral programs and affirmative action programs. 

Provide an avenue for workers to highlight and address important workplace issues

Human resources teams can establish effective hiring policies to get a diverse workforce through the door but the work for construction businesses does not end there—employee retention is a critical consideration. Every worker must feel comfortable and accepted in their team. Recent research revealed that a third of construction workers leave their company within a single year of employment.

Average number of years construction workers stay in a job (Image Source)
Construction businesses must be more proactive in finding out why these workers leave and resolve any issues to help prevent further turnover in the future. An effective way to do that is to create a communication channel between on-the-ground employees and team leaders, where they can voice their concerns and issues in a supportive and non-judgmental environment. This approach also allows construction teams to regularly evaluate the effectiveness of their diversity policies with voices from every part of the team. 

Work with educational institutions to encourage a wider demographic of students to choose a career in construction

All the diversity tips that have been mentioned so far have focused on hiring workers that are ready to enter the workforce at this very moment. However, the hiring challenges that the construction sector faces have come after decades of skewed hiring and will take time to resolve.
Construction companies can fight this long-standing problem by taking a progressive approach to attracting talent by conducting outreach in educational institutions to ensure that construction remains a viable and attractive career choice for future workers of all types. 
Ultimately, construction companies must realize that having a more diverse workforce is more than a matter of social responsibility or public relations. Diversity has a direct and undeniable impact on the ability of the sector to meet demand, maintain operational efficiency, and increase long-term profitability. Construction teams must be more proactive in addressing the challenges faced by workers from different backgrounds, genders, ages, and races. This can help make a career in construction more attractive than it has been for decades.

Author Bio

Tom Stemm is the CEO/Founder of Tom leads a team of integration developers, application enthusiasts, customer heroes, and sales superstars on a mission to eliminate duplicate data entry and rampant data errors from the construction technology world.

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