Brad Bush, Senior Vice President, HUB International Florida
As Florida’s construction industry continues to grapple with recovery from natural disasters, a closer look reveals both promising growth and persistent hurdles. Despite the industry’s boom, worker shortages, escalating labor costs, inflation and jobsite safety could impede growth. The key to a prosperous 2024 lies in robust employee benefits and risk management programs.
Addressing the scarcity of skilled workers remains a top priority. Almost 90 percent of companies are struggling to fill positions as seasoned professionals retire and career interest in construction declines. Even with a projected slowdown in construction spending in 2024, the industry has a shortfall of approximately 342,000 workers. With such a shortage of laborers, prioritizing worker health and safety becomes imperative, especially with the industry reporting a higher rate of workplace injuries than any other sector.
Forward-thinking firms are proactively addressing safety concerns before commencing work and creating training programs to prevent accidents. Additionally, competition for skilled labor is compelling some construction companies to differentiate themselves by offering an array of health benefit programs and financial incentives.
Despite the potential of alternative insurance and personalized benefits for enhancing recruitment and retention, only around one-third of construction respondents in HUBs 2024 Outlook Executive Survey currently provide such offerings. Firms that leverage personalized benefit strategies stand to create a quality employee experience that bolsters engagement and elevates overall employee welfare. Even starting with small steps, such as polling workers to determine their preferences and gradually introducing tailored solutions, can impact the workforce positively.
Two-thirds of construction respondents cite economic challenges and unpredictability as potential roadblocks for profitability in 2024. Overall economic uncertainty has dampened consumer interest in purchasing new homes, prompting a shift towards the “build-to-rent” market.
Meanwhile, the surge in demand for new construction and infrastructure investments has sparked substantial growth, with construction spending soaring to $1.98 trillion from August 2022 to August 2023. Yet high interest rates, inflation and labor shortages are pressuring margins, leading to project delays and cancellations.
Severe weather events continue to disrupt operations, particularly in regions vulnerable to hurricanes as well as places where wildfires, storms and earthquakes are common. In Florida, destruction from Hurricane Ian, for example, is projected to result in up to $110 billion in total rebuild value through 2027.
Companies that proactively identify and tackle potential issues before they manifest, utilizing their insurance programs as a form of contingent capital, can enhance their long-term resilience and performance. To fortify their businesses in 2024, construction firms should consider the following steps:
Construction firms will lay a solid foundation for the coming year and beyond if they develop a comprehensive plan and focus on risk management strategies. Accurate property and equipment valuations, crafting personalized benefits and more are key toward that goal.
Brad Bush is a Senior Vice President in the Jacksonville region for global insurance brokerage HUB International Florida. Brad works throughout the Southeast and specializes in construction, collaborating with contractors on both their surety and insurance needs.
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