Top 5 HR Challenges for the Construction Industry

February 7, 2020 Written by Oralie Chapman

Like any labor-intensive industry, construction companies rely on great workers and managers to get the job done for their clients. The construction industry faces unique HR challenges that can make it difficult to fulfill their need for great employees, including high turnover, a lack of qualified applicants, safety issues, and the weight of complying with employment and immigration laws.


Partnering with a Professional Employer Organization (PEO) eases the burden of compliance, provides access to worker’s compensation insurance and employee benefits at competitive rates that can reduce employee turnover.


Top 5 HR challenges for the construction industry


1. Finding qualified workers

With Hawaii’s extremely low unemployment rate, it is hard to find qualified workers in any industry but it’s even harder in the construction industry. Specific issues include workers who assume that construction jobs pay low wages and that these jobs are dangerous and hard on the body. From a hiring manager’s perspective, each construction job requires different skills and levels of expertise; certifications may also be needed for certain projects.


Construction HR managers can overcome these obstacles by:

  • Offering competitive pay and benefits.
  • Having worker’s compensation insurance.
  • Using social media and/or website to post clear job descriptions.
  • Working on employer branding and making sure that the brand shows the business cares about its employees.
  • Providing comprehensive training.


2. Retaining quality workers

The construction industry has a traditionally high turnover rate that can make it difficult for employers to maintain stability.


Construction industry HR can overcome these obstacles by:

  • Providing opportunities for advancement and development, including paying for certifications.
  • Providing wage increases and increasing vacation days for loyal employees.
  • Creating an open-door policy or anonymous way for employees to raise concerns over the work environment.
  • Having a manager or employees on hand who speak the native language of your workers.


3. Creating a safe work environment

Any physical job is going to come with safety risks so it’s important for business owners to set strict safety measures that will help to reduce worker accidents. Worker accidents can cost the business a ton of money in lost productivity, recruiting and training costs for new employees, increased workers’ compensation premiums and medical expenses. Employers can even be sued for negligence if they knowingly create an unsafe work environment.


Construction companies can handle this challenge by:

  • Working with safety and risk management professionals to create a comprehensive safety plan that includes regular training and instructions for what to do if an accident happens. Workers who don’t speak English as their first language should be given information translated for them.
  • Partnering with a PEO that can offer cost effective rates for workers’ compensation insurance plus claims management and safety incentives.


3. Immigration issues

Hawaii has a sizable community of immigrants, much of whom emigrated from the Philippines. One in five Hawaii workers is an immigrant, which is an important share of the state’s labor force across all industries. The U.S. Census Bureau’s 2015 American Community Survey found that Hawaii had 11,169 undocumented immigrants working in the construction industry.


HR managers can handle immigration issues by:

  • Ensuring that there is an employee or manager who speaks the language of all employees.
  • Ensuring that they file the I-9 Employment Eligibility Verification form for each new employee and holding on to employee files in case of audit.
  • Looking for professional help to ensure that they are complying with all hiring processes relevant to immigrants.


4. Complying with labor laws

Every business must deal with changing labor laws from year to year, and the construction industry is no different. In the construction industry, OSHA safety regulations are especially important and all companies with 50 or more employees must provide affordable, minimum essential health insurance coverage to all employees who work an average of 30 hours per week. This can be tricky when employee turnover is high and a company’s workforce fluctuates below and above 50 workers. Construction businesses must also pay attention to any expansions to overtime pay protections under the Fair Labor Standards Act (FLSA) as overtime is common in the construction industry.


HR managers can overcome labor law challenges in the construction industry by:

  • Partnering with a PEO for help with compliance.
  • Fully embracing all labor laws because failure to comply can result in huge penalties, sanctions and lawsuits that would cost way more than complying in the first place.


Partnering with Makai HR


Not sure how to afford workers’ compensation insurance and employee benefits? Worried about complying with immigration and labor laws? We’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are in compliance with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long). When choosing a PEO to partner with, there are many things to consider including cost, services and technology solutions.


With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. We can truly improve your employees work benefits while freeing you up to run your business.


What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!