The impact of the construction labor shortage is now seeping into the courtroom. Here’s an increasingly familiar scenario that has – or is likely to happen – to many general contractors.

A project is moving along on time and on budget when suddenly there aren’t enough workers available to complete the project on time. Existing crews are spread too thin and quality suffers. The anticipated completion date gets extended, the client gets upset and begins questioning as to whether it will meet the completion date. Depending on the contract, the client may withhold payment or request that the GC accelerate its work to timely complete the project. As both sides argue their points, the GC needs to prove they and their subcontractors have  sufficiently manned the project. This is where it can get tricky.

Old Habits Die Hard

Many GCs and subcontractors still use old school processes for documenting workers and subcontractors on jobsites with the use of paper sign-in sheets or manual recording (usually via Excel spreadsheets). Those forms somehow make their way back to the main office and are sometimes transferred into a project management platform, payroll software and/or filed away in a cabinet. The forms aren’t always legible, complete or accurate.

A similar scenario happens with the daily log. The sign-in sheets can inform part of the daily log while the rest of the information is largely based on memory of what happened, punch list status, weather, deliveries, etc. The reports are often done at the end of a long day. Here, too, relying on paper forms and memory is not the best idea, especially if the project eventually ends up in a  lawsuit.

Is it Legal? 

As a construction litigation attorney, I can tell you that having someone comb through stacks of daily sign-in sheets and daily logs, from months or years later, is time consuming at best and at worst, detrimental to the GC’s case.

These situations shouldn’t come as a surprise and their impact can be minimized. It’s no secret that the construction labor shortage has been an ongoing issue for over a decade. More recent data on the situation from the Associated Builders and Contractors reports that construction currently needs more than a half a million workers above its current pace of hiring in order to meet demand.

Labor in Demand

As the labor shortage continues and the use of digital tools increases on jobsites, GCs can’t ignore the importance of using them to automate outdated processes to create digital records that are easy to access and understand. While the tools can’t create more workers, they can help maximize the productivity of everybody on the jobsite by reducing admin work. In fact, workers are asking for them.

In the March “Digital Technology in Construction: 2022” survey conducted by the National Association of Women in Construction (NAWIC) and Safe Site Check In, 95% of respondents reported being more productive through the use of new technologies built for the construction industry. When asked which of the latest construction technologies are most helpful, the top answer was smartphone apps for managing projects and the workforce.

Change Pushed by Pandemic Policy

Since the pandemic, the number of digital tools on the jobsite has increased. At first they were used to conduct health screenings and now they’ve morphed into a way to manage people and projects in the field while keeping digital records of what happened and who was there. Based on the example above, the information contained in a daily log can be evidence demonstrating that a contractor’s lack of manpower was not the driving force for the delay to the project. 

Yet digital records from the jobsite aren’t just about protecting the company from a legal perspective. It’s also about running a more efficient business. By shifting from paper to digital, you cut down on admin and maximize productivity of everybody onsite. For example, the daily log can be crowdsourced from digital check-in records including documentation of who was there, when they started, and their assignment for the day. All of that data can automatically flow right into a project management platform like Procore, Autodesk Construction Cloud or CMiC. This gives the GC insight into the profitability and productivity of each job, and lets them know in advance of potential delays due to workforce issues.

As digital transformation makes its way to the construction industry, we will see more cases where digital jobsite data is relied upon as evidence. It’s in the GC’s best interest to take advantage of the latest digital tools and platforms.

Brian Junginger is a construction litigation attorney at McInerney & Dillon