Lean Solutions to Labor Shortages

by Balfour Beatty
Supply and demand—the yin and yang of modern economics—govern everything from gas and grocery prices to the amount you’ll fork over to see your favorite NFL team. Like the guiding tenets of traditional Chinese medicine, supply and demand should reach a healthy equilibrium.

But sometimes, those forces don’t remain in balance. Take, for instance, one of the most pressing issues facing the construction industry: a shortage of skilled labor. According to the Associated General Contractors of America, over two-thirds of construction firms experience difficulty filling craft positions. Demand, by contrast, is strong, with crane counts surging in many urban centers.

Labor conditions are far more serious than any survey could signify. Highly competitive fee structures have lingered in the wake of the Great Recession. A vast majority of the skilled labor base is aging, and a new generation isn't standing at the ready. Experienced craft workers have been challenged to execute work with less personnel, requiring crews to strategically allocate labor—all while the complexity of our projects has increased. Numerous studies reveal that construction productivity is remaining flat, at best, while other industries have improved. Overrun budgets, increased safety incidents, delayed project completions—they’re all repercussions of a deep disconnect between supply and demand that creates risks for our people and projects.

We know that rectifying the cultural and educational factors that created these conditions is going to take time. But what about the short term? How can contractors successfully deliver projects they can’t adequately staff—much less in today’s ultra-condensed timeframes? It’s through Lean thinking, if you ask Balfour Beatty’s planning experts. By addressing labor challenges with Lean practices, we are equipping our project teams and trade partners with the tools they need to increase productivity.

A Lean approach begins with creating a project plan that is clear, easily communicated and universally understood. A critical path method or CPM schedule is the industry standard and an invaluable tracking mechanism. But many workers find them difficult to interpret, and team communication and accountability often suffer as a result.

That’s where collaborative, visual planning can work hand-in-hand with a CPM. During pull planning sessions, teams plan a more reliable workflow by identifying the necessary handoffs between each other’s tasks and exposing barriers to success—together. Across the country, we’re observing Balfour Beatty teams maximize their productivity on complex projects using just these concepts.

Lean philosophies also strengthen team dynamics. Pull planning is an inclusive process, giving trade partners a voice in their own success. While scheduling was once viewed as a top-down mandate, at Balfour Beatty, we understand that project plans cannot originate in a vacuum. They must be co-created—a practice that fosters trust.

To assist in leveling and reducing peak manpower demands, Balfour Beatty teams are leveraging prefabrication, often referenced as modular construction. Planning is essential to the success of prefabrication, ideally beginning in design or preconstruction, when teams can begin assembling entire structural components off-site. When executed successfully, prefabrication can significantly reduce on-site safety risks and benefit a project’s budget, schedule and manpower demands.

If there’s one principle that guides Balfour Beatty in our approach to navigating a shifting and volatile labor base, it is predictability. When our project plans accurately reflect our weekly targets and milestone completions, we can give our clients better projections on cash flow and forecast our long lead materials. When we create a culture of continuous improvement, our quality and efficiency will increase. Lean approaches can’t encourage more people to pursue masonry, nor can they make buildings frame themselves. But they can help make construction a more desirable career path—one that is safer and more satisfying thanks to better work-life balance. And that’s a benefit our industry will reap for decades to come.