b"How Construction Businesses Can Navigate Laborshortage and avoid these costly claims? Focusing on risk mitigation Shortage and Social Inflation Challengesis a good way to start. BUILDING A CULTURE OF SAFETY Construction businesses have faced a rising tide of challengesConstruction businesses looking to improve their risk profiles have since the pandemic. The labor shortage, worker safety threatsseveral options to improve their safety measures and create a culture and more have created a difficult environment for business own- of workplace safety. Consider the following best practices: ers to find opportunities for growth while keeping their opera-tions running smoothly and safely. Add to that an increasinglyExpand your hiring network: The traditional job advertise-litigious work environment, and it's evident that a dedication toment is not enough in the current job market. Business owners safety and risk mitigation may be just what construction busi- should consider other avenues to find workers. This could in-ness owners need to work through todays risks and set them- clude networking with local high school and college students, selves apart from the competition.working with local trade associations and creating an employee A proactive business owner who dedicates time and resources toreferral program to incentivize your best employees to bring in workplace safety can build a pipeline to greater success andother good people. Consider reaching out to colleges, high growth while avoiding major claims that could derail their oper- schools and trade schools in other towns, cities and states to ations. Business owners and operators can improve their hiringexpand your hiring network. and risk mitigation efforts by focusing on the following key are-as.Enforce training policies: While it can be tempting to pull back on hiring and training standards to manage rising work-ECONOMIC FACTORS AND SAFETY CHALLENGESloads, untrained staff members can eventually run into work-The labor shortage has strained the construction industry andplace safety issues. The resulting damage and insurance claims placed significant pressure on business owners. Heading intocan prove incredibly costly for businesses. Comprehensive safe-2025, Associated Builders and Contractors estimated that thety training following OSHA guidelines should be conducted at industry would need to attract around 454,000 additional work- least quarterly. If a claim does occur, construction businesses ers to meet labor demands. This worker shortage has coincidedshould offer retraining to team members to ensure everyone is with a rise in demand for construction. The industry is seeingaware of best practices. more project requests on both the residential and commercialIncentivize safety: Consider adding a formal incentive program fronts, leading to an increase in construction spending, and at arecognizing employees who have made safety a priority in the faster pace than anticipated.workplace. These incentives can serve as a morale booster and demonstrate that ownership has a genuine interest in the health These two factors have had downstream effects on constructionand safety of team members. businesses. According to data from the Associated General Con- Invest in the right technology: There has been considerable tractors Association of Americas 2024 Workforce Analysisinnovation in construction safety, and smart businesses will take Survey, 54% of firms have reported production delays caused bythe time to review their options and invest in the right solutions. worker shortages. A number of companies have been forced toWearables are one avenue to consider. For example, smart hard delay building and operations because they did not have suffi- hats have sensors that can detect worker fatigue, smart watches cient talent on staff to run these projects.can identify health trends such as overexertion and smart glasses can identify safety threats in real time. For businesses that have moved forward with their projects amidDocument everything: Even with the best safety practices in the talent shortage, there has been an observable rise in safetyplace, incidents can still occur, leading to an insurance claim. concerns. Some construction companies have been forced to hireConsider having cameras on site as this evidence can prove crit-inexperienced workers to complete their growing list of projects.ical in the claims litigation process and can also be valuable to Other teams simply have not had the bandwidth to conduct thehelp identify safety hazards for staff members. Comprehensive thorough safety training sessions they usually would, leading todocumentation will make the claims-resolution process faster gaps in safety knowledge and best practices.and easier to navigate. In some cases, this has also corresponded with a decrease inIn addition to these steps, finding the right insurance partner is quality of work. Many team members have felt rushed in recentcritical. An insurance agency with years of experience serving years to move projects along to meet deadlines while trying tothe construction industry will know your risks best and can rec-uphold their companys quality standards, leading to qualityommend comprehensive risk mitigation practices tailored to control issues.your business to ensure your operations are protected from the range of safety threats construction companies face on a daily These factors have also caused a rise in construction defectbasis. claims, which have come at a difficult time as nuclear verdictsverdicts topping $10 millionare at an all-time high across allWhile recent economic factors have created new challenges for con-business sectors. In 2023, nuclear verdicts hit a record $14.5struction businesses to navigate, there are steps business owners can billion, and this trend is expected to continue.take to safety-proof their operations and mitigate the impacts of the labor shortage. With the right training and hiring policies, in addition Jurors in this litigious environment have tended to side withto strong safety practices and an investment in technology, construc-plaintiffs and are awarding larger dollar amounts to the injuredtion businesses can reduce their risk exposure and ensure future busi-parties. These multimillion-dollar claims can not only harm aness stability. construction companys reputation but potentially put them out of business entirely.by Sy NilakoutWhat can construction businesses do to work around the labor 29"