labor shortage
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By Kelli Simpson   |  
November 16th, 2016

Is The Construction Industry Reaching The End Of Its Labor Shortage?

Reading Time: 3 minutes

The last few years have been tough on the construction labor market. We see articles in our news sources about how to fill the gap with technology, how to recruit more laborers, and the best ways to retain the ones you have. Factors like the 2008 recession in the US compounded with a cultural shift to more desk jobs in the US are contributing to the shortage. But what if the data on construction employment tells us a different story?

The light at the end of the tunnel?

According to the Associated General Contractors of America, employment in the private sector of construction is at an all time high since October of 2008. It’s investments in the public sector of construction that are declining. “There is a two-part story in construction right now as private-sector demand continues to boost employment while declining public-sector demand is contributing to year-over-year declines in heavy and civil engineering construction,” said Ken Simonson, the association’s chief economist. “Overall construction employment would certainly be higher if local, state and federal officials were investing more to build new and repair aging infrastructure.”

Laborers working in residential construction increased 5.6% compared to last year, and non-residential construction workers increased 1.6% compared to last year. In fact, in October there were 512,000 unemployed job seekers who had previously worked in construction, a 10-year low.

Still a long way to go

It’s not all good news for those in construction seeking more laborers, though. Even the increases in employment and investment in the private sector aren’t quite enough to address a lot of the factors that led to the exodus in the construction labor market.

In many metro areas where the private sector is booming, contractors are finding that they must lock in skilled laborers like electricians and carpenters months before they would normally. They use promises of overtime and increased wages, but still have to be careful about how much work they take on. Many are postponing start dates for projects or adding time to project delivery dates to cope with the decreased manpower.

What contributed to the labor shortage?

In the U.S., the construction industry all but came to a halt after the recession in 2008. Many laborers retired early or switched careers. Young apprentices who would now be maturing to manager positions instead chose different career paths outside of construction. The median age for construction workers was 37.9 in 2000 and is now 40.4 according to the Center for Construction Research and Training. While workplace injuries occur at a lower rate with older construction workers, they are generally more severe and also more expensive in workers’ compensation.

How to address the ongoing labor shortage

Although reports are looking up for the construction industry, the labor shortage likely won’t be solved overnight. What can you do to keep your firm accepting new projects and growing your business?

  • Look to industry trends to be more efficient

New trends like integrated project delivery (IPD), offsite construction and mobile auditing all help to streamline operations and allow the employees you do have to be better at their jobs and get more done. Embrace the technology emerging within construction and your profit margins will likely thank you.

  • Retain your current workforce

Create a company that people will want to work for. This is true in any industry, but especially so in construction because everyday safety is such an integral part of a successful project.

  • Offer clear advancement opportunities

Young workers are looking for a path to success. Make it clear right off the bat how to achieve that and inspire more motivation. 

  • Train each laborer, no matter their age

Everyone has a fundamental desire to improve their craft. Don’t focus your training efforts only on the young workers. Figure out what skills your laborers want to learn and invest in them. Encourage classes, apprenticeships, training sessions, any career advancement opportunity your employees want to consider.

  • Be proactive in recruiting

Many industries start their recruiting in high school or college, but few construction firms invest the time and energy there. The best way to set your firm up for success in the future is to start recruiting young talent now. Tony Rader, the vice president of Schwob based out of Dallas has taken to going to sporting events and handing out flyers. Get creative in recruiting efforts.

So back to our original question: are we reaching the end of our labor shortage? It’ll likely be around for a while, and in the private sector especially, firms will still be competing to fill skilled posts. With a culture that has placed a premium on a college education, vocational posts like construction jobs are looking less and less enticing to younger generations. Without some serious investment in training and recruiting, the U.S. will likely continue to struggle with a shrinking construction labor market and technology will have to continue to fill the gaps.

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