The construction industry is embracing technology at an unprecedented rate, with Applicant Tracking Systems (ATS) becoming a critical tool for many firms.
According to a 2022 survey by the Associated General Contractors of America, the adoption of ATS among construction firms surged to 52%, up from 38% in 2019. This shift reflects a broader recognition of the efficiency, cost savings, and quality improvements that ATS can deliver in the hiring process.
Jared Matthews, a construction business owner, provides a compelling case study of how technology can transform recruitment and operational efficiency in the industry. Matthews’ company, which has grown from a small family business to a multi-location enterprise, has significantly benefited from adopting ATS. "We’ve been able to leverage that with just one HR person to do the work of what would probably have taken us three or four HR people or outsourced recruiting firms," Matthews shared. This practical example aligns with broader industry trends showing that ATS can reduce time-to-hire and cost-per-hire, crucial in a construction industry where project timelines are tight and labor costs are high.
However, the journey to tech adoption is not without its challenges. Matthews emphasizes the importance of involving employees in the decision-making process and demonstrating the tangible benefits of new tools. "The key to it for me was involving everybody in the decision and helping not just dumping it on them but letting them have a voice in the process," he explained. This approach can help overcome the resistance to change and technical skill gaps, which are significant barriers to ATS adoption.
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Adoption of Applicant Tracking Systems in Construction
The construction industry has seen a big increase in the use of Applicant Tracking Systems (ATS) in recent years. According to a 2022 survey by the Associated General Contractors of America, 52% of construction firms were using ATS, up from 38% in 2019. This rise shows the growing recognition of the benefits ATS can bring to the hiring process in construction.
Factors Driving the Adoption of ATS
Efficiency and Cost Reduction: ATS can significantly cut down the time-to-hire and cost-per-hire. A 2021 study by ConstructionExecutive found that using an ATS reduced time-to-hire by 27% and cost-per-hire by 21% for skilled construction industry trades. This efficiency is crucial in an industry where project timelines are tight and labor costs are a big part of the budget.
Improved Hiring Quality
ATS with AI-powered features like resume parsing and candidate ranking can improve hiring quality. A 2023 report by PwC showed that construction firms using these advanced features saw a 43% increase in hiring quality scores. This helps companies ensure they are hiring the best candidates, which is essential for maintaining high standards of work and safety.
Reduction in Candidate Drop-off Rates
Mobile-friendly ATS platforms are effective in reducing candidate drop-off rates. A 2020 case study by Procore highlighted how a large general contractor reduced candidate drop-off rates by 38% after implementing a mobile-friendly ATS. This feature is especially important in construction, where many candidates may be accessing job applications from mobile devices on job sites.
High Employee Turnover Rates
The construction industry has one of the highest employee turnover rates, at 44.3% annually, according to the Bureau of Labor Statistics. This high turnover drives the need for efficient hiring tools that can quickly fill open positions. When leveraging an ATS with built-in candidate assessment tools to help hiring managers make better hiring decisions turnover can be reduced by as much as 90%.
Insights from the Trenches
Jared Matthews, a construction business owner, shared his experiences with us in adopting technology in his company. Jared's firm has grown from a small family business to a multi-location enterprise and has used technology to streamline operations and improve efficiency. He emphasized the importance of incremental improvements and the role of technology in these gains.
Adopting an ATS has allowed Jared's company to manage recruitment more effectively, even with a lean HR team. "We’ve been able to leverage that with just one HR person to do the work of what would probably have taken us three or four HR people or outsourced recruiting firms," he noted. This aligns with the broader industry trend of using ATS to reduce time-to-hire and cost-per-hire.
However, Jared also discussed the challenges of implementing new technologies, particularly the resistance to change among employees. He stressed the importance of involving employees in the decision-making process and showing the tangible benefits of new tools. "The key to it for me was involving everybody in the decision and helping not just dumping it on them but letting them have a little bit of a voice," he explained. This approach can help overcome some of the barriers to ATS adoption identified in the FMI construction industry report.
Jared's insights underscore the potential of ATS to transform recruitment in the construction industry. By addressing the challenges of change management and technical skill gaps, construction firms can fully leverage the benefits of ATS to improve hiring efficiency, reduce costs, and enhance the quality of their workforce.
Barriers to Adoption
Despite the clear benefits, there are challenges to ATS adoption in construction. A 2022 FMI construction industry report cited a lack of technical skills (52%) and change management challenges (46%) as top barriers. Additionally, only 27% of construction firms were using AI/machine learning capabilities in their ATS as of 2022, indicating room for further technology use.
Takeaways
The adoption of ATS in the construction industry is driven by the need to improve hiring efficiency, reduce costs, and enhance the quality of hires. While there are challenges to adoption, such as technical skill gaps and change management issues, the benefits of ATS are clear. The market is expected to continue growing as more firms recognize the value of these systems. By addressing these challenges, construction firms can fully leverage the benefits of ATS to improve hiring efficiency, reduce costs, and enhance the quality of their workforce.
References:
- Associated General Contractors of America (2022). Construction Hiring and Business Outlook
- Fortune Business Insights (2023). Applicant Tracking System Market Size, Share, Trends [2030]
- ConstructionExecutive (2021). Leveraging Technology to Attract Top Construction Talent
- PwC (2023). Construction Technology Trends and Innovations Report
- Procore (2020). Improving Hiring with a Mobile ATS: Case Study
- Bureau of Labor Statistics (2022). Job Openings and Labor Turnover Survey
- FMI (2022). Construction Technology Adoption Survey
