Small and Medium Construction Companies Mostly Face "Difficulty Hiring Technical Staff... Adverse Impact on Construction Costs and Quality"

Nine out of ten small and medium-sized construction companies reported difficulties in hiring technical personnel at construction sites. The lack of young people entering the construction industry was identified as the main cause, and many construction companies believed that the labor shortage affected increases in construction costs and concerns about quality deterioration.

Workers are sweating hard at a construction site in Seoul. / Photo by Jinhyung Kang aymsdream@

According to the Construction Trend Briefing (No. 920) recently published by the Korea Construction Industry Research Institute on the 20th, 218 out of 231 general construction companies (94%) responded that it had been difficult to hire technical personnel at construction sites over the past three years. Specifically, 56% said it was "somewhat difficult," and 38% said it was "very difficult." This survey was conducted by the Korea Construction Association from June 20 to July 3, with 89% of the responding companies being small and medium-sized construction firms ranked below 200 in construction capability evaluation.

Construction companies viewed the current shortage of technical personnel as a chronic problem. Responses indicated that 88% believed it would continue in the mid to long term, while only 8% thought it would last a short time, and a mere 1% said the issue was currently being resolved.

The impact on construction projects was ranked first as increased construction costs (61%), followed by concerns about quality deterioration and increased safety accidents (36%), and delays in construction periods (32%). These issues were perceived to stem from operating with insufficient technical personnel or lowering hiring standards to employ workers.

Additionally, 80% of the responding companies attributed the labor shortage to a lack of young people entering the construction industry. Increased workload due to policy and institutional changes (39%) and turnover to other companies or industries (32%) were also identified as major causes. Furthermore, they viewed national issues such as aging and demographic changes as factors worsening the situation.

Moreover, it was pointed out that poor working conditions, wages, and lack of career vision have driven young people away from construction sites. Due to the nature of site work, which involves changing living locations depending on the site, weekend work, and early starts, technical personnel inevitably have low satisfaction with work-life balance (WLB). If the increasing workload is not compensated with wages, it becomes a reason for turnover, referred to as "Talgun" (leaving construction).

In response, construction companies reported overcoming difficulties through measures such as increasing performance bonuses (68%), relaxing hiring standards (34%), expanding welfare benefits within companies (29%), and increasing contract-based hiring (19%).

The Korea Construction Industry Research Institute stated, "Skilled workers at construction sites have already been partially replaced by foreign laborers, and utilizing them is likely to be a future option." However, it added, "Since the shortage of technical personnel originates from fundamental issues in the national economy and industry, construction companies also seem to emphasize mid- to long-term measures to improve the industrial environment."