Rancho Mesa's Alyssa Burley and Account Executive Kevin Howard discuss the labor shortage in the construction industry and strategies to mitigate the effects.

Show Notes: ⁠⁠⁠Subscribe to Rancho Mesa's Newsletter⁠⁠

Director/Host: ⁠⁠⁠Alyssa Burley⁠⁠⁠

Guest: ⁠⁠⁠Kevin Howard⁠⁠⁠

Producer/Editor: ⁠⁠⁠Megan Lockhart⁠⁠⁠

Music: "Home" by JHS Pedals, “News Room News” by Spence

© Copyright 2024. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Alyssa Burley: Hi, this is Alyssa Burley with Rancho Mesa's Media Communications and Client Services Department. Thank you for listening to today's top Rancho Mesa News. Brought to you by our Safety and Risk Management Network, StudioOne.

 AB: Welcome back, everyone. My guest is Kevin Howard, partner with Rancho Mesa. He specializes in providing insurance to construction contractors. Today, we're going to discuss the labor shortage in the construction industry and hopefully get some strategies to mitigate the effects. Kevin, welcome to the show.

 Kevin Howard: Good morning. Thanks for having me.

 AB: Of course. So construction companies nationwide are grappling with a shared challenge, a labor shortage propelled by a number of factors. So I want to explore why this is an issue and maybe highlight some of the key areas that can contribute to managing the issue that ultimately can affect our clients bottom lines. So what are you seeing as the main factors that are causing the labor shortage in the construction industry?

 KH: Great question. There's a multitude of different factors, all happening at once over the last five years, that I believe are creating this labor shortage. You know, you have a retiring workforce. If you look at the baby boomers, Baby boomers are turning 60, 65 years old. And there's a lot of really important skilled workers in that group. We have superintendents, we have people that are managing these construction sites that have been doing it for years. They know how to do it and, you know, good for them. They get to go and enjoy their retirement.

 AB: Yeah.

 KH: That's creating a system where we're, you know, where's the next wave of skilled workers coming from? Are they already in place? And who's coming into the field? And so the next factor was the focus on college over skilled labor. You know, hey, I'm I'm 18 years old. Should I go get my college degree? Should I go into a trade? And I think with COVID-19, the fear was, hey, people aren't even allowed to go outside. That was in 2020. But that wave of potential tradesmen and women, you know, might have chose that route. So that's another factor. And then we have, you know, we just talked about this recently in the office. We have, for example, restaurants are offering $20 per hour. So, you know, if I'm if I'm looking for my, you know, a way to go out there and earn some money, should I go out into the construction field or should I go make $20 an hour at a restaurant? That's also a factor creating this this labor shortage.

 AB: Yeah. And I don't think that a lot of these 18 year olds realize that if they go into the construction industry, the potential to make a lot of money is there where, you know, if you're going to go work at a fast food restaurant, then you're not necessarily going to have those same opportunities.

 KH: Right. It's it's funny because the more we get into the numbers, working with clients and seeing what jobs are being bid, there's prevailing wage. There is an amazing opportunity to make a really high wage, have a great career, support a family in the trades. And one idea would be a just a better way to advertise that.

 AB: Yeah. And you know, there's organizations like NAWIC and Future Construction Leaders here in San Diego that try to expose children, high school students, college students to the construction industry and all of the different careers that are in the industry, whether it's the person who's driving the nails or maybe somebody that's designing the building. There's a lot of different careers that you can find in the industry.

 KH: That's a great point. And if anybody wants information on that, let us know.

 AB: Absolutely. I can give all that information.

 KH: Absolutely.

 AB: All right. So as the construction industry struggles with the ongoing labor shortage, business voters must strategize to protect their bottom lines. While these challenges persist, what are some of the key areas that can help mitigate that impact?

 KH: Yeah. To go further down the line of the challenges with the shortage of labor. There's going to be younger, less skilled workers that have just a higher probability of getting injured.

 AB: Yeah, we see that all the time. The the new guy is the one that's more likely to be injured than the seasoned professional.

 KH: Yeah. The new worker comes into the field. They're not familiar with the movements and the material and the PPE. And then actually there's, you know, as we know, about 16 trades that have split class codes where the insurance is more expensive on the work comp side than the higher wage. So what can we do as a company? You know, just awareness that this is when safety and that investment in safety materials, your PPE, your training can reap a lot of benefits in this area. I think in the future. Insurance cost management, which is meeting with your broker, looking at claims on a quarterly basis, making sure that the experience modification is in control and you have a plan. And then the safety orientation and training. I got to throw a shout out to Rancho Mesa SafetyOne App. It's pretty amazing, right?

AB: Absolutely. So the SafetyOne mobile app allows you to do your toolbox talks, document everything. We have a website where you can do your new hire safety orientation training in addition to regular trainings that you just want to give to your employees on an annual basis or however often. It's a really great tool to not only provide training and all of the content that you need for training, but also document that you're actually doing it. And it's not just about training, it's also doing your observations, going out to the job site, documenting that you're looking to make sure that all of your employees are wearing their PPE. Maybe you do have a new person that, you know, they're not sure. Do I wear my glasses right now? Do I have to have gloves on? You know, so if you have someone that's out there documenting, looking for those things, all of that can be done in the safety app and you've got it documented. And you know, we know that if you have a list that you're looking for these certain things in your documenting it on a regular basis, that creates a culture of safety within the organization. And it's just a great way for you to show not only your employees that you care about their safety, but then also show the carrier that it's important to the company. And that's got to be a really great tool for you, Kevin, when you're talking to the carriers to get pricing, you can show, Hey, this client really does take it seriously.

KH: It's true. The more visibility and our ability to make a client as three dimensional as possible to the insurance carriers, it just creates a better feel, more comfort, better pricing, our ability to ask for not only the best coverage, but the most aggressive price. It really helps. And yeah, I mean, any listeners out there that are current clients or potential clients from Rancho Mesa and you want more information about SafetyOne, our app, just let me know. Let Alyssa know. We'll get information to you right away.

AB: So, Kevin, if listeners have questions about the labor shortage or their risk management, anything to do with their insurance or safety, what's the best way to get in touch with you?

KH: Thanks, Alyssa. You can reach me by email at khoward@ranchomesa.com, or my direct line, which is 619-438-6874.

AB: All right, Kevin, well, thank you so much for joining me in StudioOne.

KH: Thank you.

AB: This is Alyssa Burley with Rancho Mesa. Thanks for tuning into our latest episode produced by StudioOne. For more information, visit us at ranchomesa.com and subscribe to our weekly newsletter.