It’s been more than a decade since the 2008 financial crisis, but the construction industry continues to suffer from a labor shortage.
According to the Federal Reserve Bank of St. Louis, more than 1.5 million construction jobs were lost during the recession and, as the nation’s workforce ages and younger workers pursue alternative careers, the industry is playing catch up as it struggles to lure the next generation of workers into the field.
Just consider these statistics:
- The share of workers younger than age 25 dropped 30% from 2005 to 2016, according to a BuildZoom study.
- Overall, the representation among construction workers of those up to age 34 has declined, according to another BuildZoom study.
- And just 3% of young people, age 18 to 25, said they were interested in a career in construction, according to a survey from the National Association of Home Builders. Jobs in the medical, business and technology industries held more appeal.
The aging and inadequate workforce is making it tough for many construction firms to get jobs done. In a new industry survey released by Autodesk and the Associated General Contractors of America, 80% of construction firms report that they have difficulty filling hourly craft positions. Nearly 75% of firms predict that it will continue to be hard — or get even harder — to find enough qualified workers going forward. In fact, the ongoing labor shortage is forcing 29% of firms to forecast longer completion times into their bids for new work, according to the AGC survey.
But the lack of workers doesn’t just tie up projects; anybody in construction knows it’s also costly for builders and contractors. To keep the workers they have, two-thirds of firms are increasing pay and compensation, according to the AGC study. Nearly 30% are providing other incentives and bonuses. And 46% have launched in-house training programs to ensure the workforce they have is well-trained and ready for the jobsite, according to the AGC survey.
And, in plenty of cases, firms are just asking workers to do more and work longer hours. According to the third quarter 2019 USG Corporation and the U.S. Chamber of Commerce’s Commercial Construction Index, 81% of firms are asking skilled workers to complete more tasks, up from 73% during the previous quarter. While workers on overtime may be able to finish jobs, they also could be setting themselves up for more injuries.
4 ways to augment your construction labor force
Construction is left with a labor shortage for a variety of reasons — many outside of the industry’s control, including a recession and construction slowdown, an aging workforce and new career opportunities in other fields that young people find more interesting.
But it’s not entirely out of the industry’s hands. After all, the construction sector also has been notoriously slow to deploy new solutions to boost jobsite efficiencies and address waste. As contractors and builders struggle to keep up with demand because of the ongoing labor shortage, now is the time to consider new strategies to bridge the gaps and attract and retain a new workforce.
Here are four ways for construction companies to survive the labor shortage.
“Career-directed” recruiting tactics
When construction firms highlight the need for technical skills and highly-trained specialists, they begin to appeal to a broader array of potential job candidates. As we’ve written before, some higher education institutions are launching construction management programs to attract the next generation of workers with a career trajectory that requires more than a hammer and nails.
Outreach to underrepresented populations
Initiatives to reach out to typically underrepresented populations such as veterans, women and African Americans, are another way to shore up the workforce. The Policy Group on Tradeswomen’s Issues, for example, helps builders recruit and retain women, who make up just 9% of the construction workers. HBI offers programs for at-risk youth, veterans, displaced workers and ex-offenders.
Programs to train existing employees and identify high-potential workers are another way to bolster the workforce. While these efforts can take time and resources, they also pay off. According to an FMI Corporation study, firms that took the time to build up their workforce also typically have the highest employee retention.
New technologies also have a role to play in the construction industry as leaders look for ways to improve inefficiencies and cut back on waste even when the labor market is tight. According to the AGC survey, 29% of firms are implementing technology solutions to augment the workforce. Nearly one in four are strengthening jobsite performance with lean construction techniques and strategies such as our Spot-r solution.
Our customers report big benefits as they deploy Spot-r, a networked wearable device that monitors the movements of workers and equipment on a jobsite. With it, site managers can pull up reports to ensure that trades and subcontractors are on schedule and working in the most efficient manner possible. They can identify jobsite barriers, from inefficient lifts to busy shared workstations, that are keeping workers from finishing tasks on time. And, with custom reports and a big picture view, construction firms can streamline current projects — and better design the next ones.
Wondering if Spot-r can help you navigate the construction labor shortage? Let’s talk.