Home building businesses in the residential construction industry have faced significant labor shortages due to economic challenges, increased competition from other industries and various other factors. According to BuilderTrend, the job opening rate in construction was 4.6 in April of 2023, up from 3.0 in 2020, indicating the industry has not fully recovered from pre-pandemic levels.
But don’t lose hope — the trades are out there. If you’re struggling to attract them to your job site, they are probably passing over your projects and prioritizing ones where they can be more efficient. For instance, one-off custom home jobs, often in inconvenient locations, don’t allow for efficiency.
There are several ways to both grow a construction company and tackle the labor challenge by finding and retaining talented tradespeople during any economic conditions.
1 – Grow Your Home Building Business by Providing Clarity and Consistency
Production home building offers several advantages, including the ability to regulate and stabilize labor flow on a job site. Planned construction allows you to manage an accurate schedule and transition trades smoothly from one home to the next.
This is more attractive to trades than the fluctuations often seen in custom building. Builders can address current labor challenges by becoming the preferred client for contractors, providing them with a reliable job site, clear work scope and consistent business in one location.
2 – Customization vs. Prioritize Personalization in Home Building
Offering a wide range of customization options may seem appealing to your sales team and some homeowners, but it’s often at the expense of a happy construction crew. Instead, building a limited selection of home designs with only a few structural variations allows vendors to price the entire portfolio once and maintain consistency across jobs. This approach enables tradespeople to avoid a learning curve on each project, making the process much more efficient over time.
However, this doesn’t mean sacrificing buyers’ ability to put a personal touch on their homes. By reducing excessive customizations and offering well-designed plans with a limited number of popular options, you can strike a balance that satisfies both your trades and your home buyers.
3 – Invest in Ongoing Training
Labor makes up a third of the cost in a residential home, so it’s important to keep skills sharp on your job sites. The best trade partners are a significant investment and can be costly to replace. Retaining these partners for the long haul means they can quickly educate new crews on your processes and provide valuable insights to anyone who steps on the job.
Set partners up for success by taking the time to train them on your scopes of work, preferred field practices and warranty policies. Many of the national builders invest in full-time Vendor Trainers in each market who ensure consistency in construction projects. If you can make sure every one of your trade partners has on-the-job training as part of their toolbox at your job sites, you will begin to see consistency in quality and timeliness.
4 – Search for a New Pool of Talent
There is a pool of workers ready for a new career and a fresh start. Workers in a variety of related fields have the skill set needed to pivot to a career in home building: commercial superintendents, framing contractors, trim carpenters, purchasing estimators, professional engineers and more.
Women represent another growing pool of talent in the industry, now making up approximately 10.8% of construction workers. Encourage the talented women in your organization to participate in a Professional Women in Building Council through your local Builders Association so you don’t miss any opportunities to identify new leaders in your business.
5 – Explore Off-Site Construction Opportunities
Production building helps your tradespeople get to the point where they can do some of the work on autopilot or even off-site. Jeremy Patton, Regional Director of Construction for Epcon Communities, sums it up well.
“The first time out, a mechanical contractor might take two days to rough one of our plans. After a few months, they quickly get to the point where they can complete the house in a day. And, the plans are so predictable that some of them can be productive on days usually lost due to weather. Our plumber, for example, can build an underground rough-in for our most popular plan on a rainy day and then bring it to the field to drop it in the ground when the weather clears.”
Franchising: A Solution to the Construction Labor Shortage
If you’re a custom or semi-custom home builder, consider how much time your tradespeople spend making special trips to scattered job sites, learning new home designs and grappling with inconsistency and uncertainty. Your home building business could benefit by partnering with a home building franchise. Franchises offer a simplified and replicable business model and have systems and processes in place that supplement vendor training and onboarding efforts. If you’re looking to take your home building business to the next level, it might be time to consider scaling and diversifying your real estate portfolio.
Along with our Franchise Home Builders, Epcon Communities builds over 1,000 homes each year in states across the country. Working alongside a top U.S. home builder can help you eliminate inefficiencies and streamline your labor process so you can build and close more homes per year.