A building company's agreement to give jobs to the unemployed people is being touted as part of the solution to the construction labour shortage.

Timber manufacturer XLam has partnered with the Ministry of Social Development to help unemployed people move into the workforce.

Xlam chief executive Gary Caulfield told Tim Dower the partnership also means there are more skilled workers out on construction sites where they're needed rather than in a factory.

"We don't need skilled carpenters to do our work we can take unskilled people and train them to use our machinery," Caulfield told Dower.

LISTEN ABOVE AS GARY CAULFIELD SPEAKS WITH TOM DOWER