Construction Labor During COVID-19: Everything Contractors Need to Know
In March 2020, all but the most essential construction ground to a halt, as nationwide shutdown orders forced businesses — which had operated from a notably strong pre-pandemic position — to cancel jobs, pause operations, or stop doing business altogether. Construction workers felt an immediate pinch amid massive layoffs and unemployment reminiscent of the Great Recession. As the construction industry and its workforce move into a new year, no light shines to mark the end of the coronavirus tunnel, as the Omicron variant surges and winter contagion rates soar.
How COVID-19 Impacted the Construction Industry
The many impacts of COVID-19 have the construction industry into one of the most challenging times in its history. Most significant has been the delay of projects (initially caused by shut down orders) which caused an array of impediments, such as halted permits and inspections. Labor shortages added pressure, forcing wage increases to attract talent. Shut down orders and quarantine protocols also closed factories and mills creating a backlog of incomplete work that is now exacerbated by increased demand. Often vendors have products but no employees to deliver materials to job sites. These combined impacts have also caused materials costs to skyrocket. The industry is also facing still-developing safety protocols imposed by local and state governments, OSHA, and the CDC, involving masks, vaccinations, sanitization, and other limitations. Other impacts include risk of cyber breaches and ransomware attacks arising from increased use of video conferencing, digital payments, and online project management tools during the pandemic, and the tightening of insurance markets as carriers impose tougher underwriting guidelines and refuse to renew coverages. With the pandemic entering another winter, companies will be contending with decreased demand across the board due to rising government deficits, and a dampening of residential and commercial projects by unemployment and lackluster GDP growth. Some construction companies are managing to work through the job backlog that accumulated and new work is out there, but a weak project pipeline is expected for the foreseeable future.
Employment in the Construction Industry During COVID-19
Although the construction industry was quickly deemed essential after shutting down for the first few months of the pandemic, the sector lost more than 1 million workers during that time. The industry has recouped nearly 80% of its workforce, but DOL reports it is still down 238,000 workers from pre-pandemic levels and that 1 million more workers are needed over the next two years to keep pace with demand for new home construction and caused by lack of inventory in an expanding housing market. Apparently pay is not the issue; construction workers’ average hourly wage is $32.86. But lack of shop classes — an important feeder into construction work — and an aging population (a construction worker’s average age is 43) have created a hole in employment. Industry analysts point to two main reasons so many firms report having trouble finding workers to hire. The first is lack of capable talent. The Associated General Contractors of America reported in September 2021 that 89% of contractors are having trouble finding craft workers, while 72% of firms say available candidates are not qualified to work in the industry due to lack of skills, failure to pass a drug test, etc. In addition, 58% of firms say that unemployment insurance supplements are keeping workers away.
What Can Contractors Do About Labor Shortage?
The pandemic has exacerbated the construction industry’s war for qualified employees that started more than a decade ago. Contractors have accordingly been forced into ever-more creative ways for attracting and keeping workers, including forming collectives to study and address the problem. Some tips to help contractors with the recruitment process during the ongoing labor shortage include))
- Taking all steps to bring in new skilled workers
Outreach can bring in workers if organizations and construction companies are creative and willing to share training resources. For example, The Building Talent Foundation, a coalition of the nation’s largest residential building companies, advances education, training, and career progression for young and underrepresented workers to align with the industry’s needs. BTF collaborates with schools, churches, foster care agencies, and community groups ranging from veterans to Girl Scouts to reach new populations of future workers. Community colleges and vocational schools, youth centers, and adult education programs can help new workers find pathways unto the construction industry, and companies that get connected early in the process make a mark with new recruits.
- Creating new educational degrees of interest is another potential solution to the worker shortage
Careers in building information modeling (BIM) and virtual design and construction (VDC) are among the up-and-coming career opti8ons that are attracting both large and small educational institutions. Expanding apprenticeships, which have always been a pathway to construction careers, is another option, including integrating these programs into the overall education system with both classroom learning and on-the-job training, and support from unions and institutional stakeholders.
This take on the traditional internship, is an approach that can help bring back workers who may have left the industry. Returnships are paid programs that ease re-entry to the workforce for people with highly sought-after skills who have taken a career break for an extended period. Returnships acclimate the returning worker to the potential new workplace, provide a refresher on the latest skills needed for the job, provide a support system, and transition the participant into a full-time position at the end of the program.
- Internal Changes
Companies can also make internal changes to overcome labor market obstacles, such as bolstering existing workforces with ongoing training and offering incentives to address the work-life balance that became more important during the pandemic as families worked from home.
OSHA, Workplace Safety and Health Compliance
To protect workers, including construction workers, OSHA has issued Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace. This guidance is updated periodically to reflect developments in science, best practices, and standards. The guidance is designed to help employers protect workers who are unvaccinated and also implement new guidance involving workers who are fully vaccinated but located in areas of substantial or high community transmission.
The guidance recommends that fully vaccinated people wear masks in public indoor settings in areas of high transmission and get tested 3–5 days following a known exposure to COVID-19. OSHA also recommends that employers implement multiple layers of controls and provides steps that employees should follow to protect themselves.
For employers, OSHA recommends:
- Facilitating employee vaccinations — including paid time off to receive the injection and recover from side effects
- Instructing infected and unvaccinated workers with virus exposure to stay home from work
- Implementing physical distancing in all communal work areas
- Providing workers with face coverings, surgical masks, or other PPE as appropriate
- Suggesting or requiring unvaccinated customers wear face coverings in public-facing workplaces
- Maintaining ventilation systems
- Educating and training workers on the company’s COVID-19 policies and procedures
- Performing routine cleaning and disinfection
- Recording and reporting COVID-19 infections and deaths
- Implementing protections from retaliation and setting up anonymous processes for workers to voice concerns about COVID-related hazards
The OSHA guidelines provide a list of steps that employees should follow to protect themselves, which includes vaccination, wearing proper face covering, social distancing, participation in any available training on safety, ventilation, and personal hygiene, and regular testing.
How Can Contractors Keep Their Employees Safe During COVID-19?
- This section should include a general list of safety guidelines for construction workers.
In addition to OSHA guidelines, contractors can help to keep construction workers safe by adhering to various safety protocols.
According to the Center for Disease Control, these efforts should begin with a comprehensive hazard assessment to determine potential sources of virus exposure.
Another critical safety component is control and prevention. This involves implementing the appropriate hierarchy of controls, including:
- Engineering controls (physical barriers, enhanced ventilation)
- administrative controls (staggered work shifts, limited breakroom capacity, social distancing, masks); and
- PPE selected as a result of the employer’s hazard assessment
Cleaning, disinfection, and hand hygiene are additional areas that require close attention. Employers are encouraged to provide soap, water, and towels for hand washing, make available and encourage frequent use of hand sanitizer, and identify and target for regular cleaning high-traffic areas and frequently touched surfaces with a high chance of becoming contaminated.
Employers must also have a policy for identifying and isolating sick workers, informing employees of possible workplace exposure while maintaining confidentiality, and clearly delineated procedures for returning to work after exposure to COVID-19.
Mental health and wellbeing considerations are also paramount. Employers should foster an environment that encourages talking openly about the pandemic, anticipate behavior changes in employees, and have a system in place to identify mental health issues and provide support services.
Employers must also provide education, training and communication about workplace issues, including flexibility options, remote work, and sick leave.
Workers should also take additional steps to ensure their health and safety when on the job during the pandemic. These include:
- Monitoring themselves and others for coronavirus symptoms
- Isolating and quarantining upon sickness and/or exposure
- Cleaning, disinfecting, and sanitizing by practicing hand washing, respiratory hygiene, and coughing etiquette and regularly cleaning high touch objects and surfaces like shared tools, machines, vehicles, ladders, and portable toilets
- Wearing of face masks whenever possible
- Social distancing during breaks and meals
- Recognizing and addressing factors that can add to work or home-related stress
- Maintaining a regular sleep schedule, eating healthy meals, and getting sufficient exercise and relaxation
- Keeping informed about COVID-19 and how to protect yourself and others
Why Choose HUB’s Construction Insurance?
Contractors can trust HUB to help them confront the key issues and concerns that must be resolved when putting together the various coverages that are required to provide protection from the risks that may arise from doing business during the COVID-19 pandemic Companies that operate in the construction industry require a panoply of protection, including a CGL policy, property and business interruption insurance, and workers’ compensation coverage. The arrival of COVID-19 in 2020, and its continued prevalence nearly two years later, continues to add multiple layers of liability to the industry’s traditional risks. HUB can assist construction industry policyholders with their insurance needs by helping them to navigate the complex array of federal, state, and local, and administrative provisions that impact to the industry generally and that apply because of the coronavirus. HUB will also guide contractors to the carriers who can offer the most affordable premiums. Whether you’re a construction business searching for your first policy, or an established company seeking more comprehensive coverage at a more affordable price, HUB will help you secure the most optimal insurance for your construction company’s specific insurance needs.