Things are never simple in the construction industry.
So far, 2023 has been a record-breaking year for the nonresidential construction industry which grew by nearly 20 percent, according to the (AIA) Consensus Construction Forecast Panel. While that鈥檚 encouraging for the sector overall, the rapid expansion has created some challenges for trade contractors, one of which is a critical labor shortage.
鈥淭he industry is currently battling the highest level of unfilled job openings ever recorded,鈥� write CNBC News鈥� .
The latest Associated Builders and Contractors (ABC) data analysis of the Bureau of Labor Statistics鈥� Job Openings and Labor Turnover Survey shows there were 374,000 construction industry job openings in June 2023. That鈥檚 high. 鈥淭he number of unfilled jobs remains so elevated by historical standards,鈥� notes ABC Chief Economist .
There are a number of different factors contributing to this shortage of workers in an industry that has such a high demand for skilled laborers.
One of the leading causes of the labor shortage is that a large number of workers are retiring and not being replaced by the younger generations. According to 2022 (BLS) data, the median age of construction workers was 41, and about 45 percent of construction workers were 45 and older. Data from also shows that 25 percent of the construction workforce is over 55 years old.
It鈥檚 not inherently bad that there are so many older workers; the problem is that there isn鈥檛 anyone to replace them.
鈥淎s many members of the senior workforce retire from construction, there aren鈥檛 enough qualified, experienced folks to take their place,鈥� says , chief people and administration officer for Shawmut Design and Construction.
An empty pipeline is the next big factor contributing to the industry鈥檚 labor shortage. And it鈥檚 a problem that has gotten worse for a few different reasons.
One, there simply aren鈥檛 enough young people interested in joining the construction industry. Younger generations have different ideas about what defines a 鈥済ood job鈥� and jobs in the trades don鈥檛 often meet those expectations. It鈥檚 a career with a reputation for being labor intensive, inflexible, and unstable 鈥� none of which appeals to today鈥檚 workers.
That perception comes from a lack of understanding of jobs in the industry, which points to the next reason the pipeline is empty. There鈥檚 a lack of awareness about careers and training opportunities in construction. Even if they wanted to go into construction, most young people don鈥檛 know how to start down that path. In many high schools, shop classes have been replaced by technology classes.
Another reason for the pipeline problem is the lack of qualified instructors to train people. 鈥淲ho鈥檚 gonna go teach a high school class for $50,000 a year when they can make $85,000 to $100,000 a year in the trades?鈥� asks , vice president of craft workforce development at Sundt Construction, a general contractor in Phoenix.
The competition for labor is tight across all industries. People have options about what kinds of careers they want which means companies who want to fill positions have to woo workers. Unfortunately, the construction industry isn鈥檛 known for offering great benefits packages when compared to some other industries.
鈥淵ou鈥檝e got to make it attractive enough that they want to come and work and they want to show up every day, and they feel like they are valued and that there鈥檚 something more than just a paycheck,鈥� says vice president of human resources operations at McCarthy Building Companies.
The labor shortage is having a major impact on the construction industry. According to a survey of construction industry managers by the , 61 percent of companies are experiencing project delays due to the labor shortage.
As every trade contractor knows, project delays cost money. So how do you overcome these barriers to hire skilled workers to fill open positions?
Perhaps the most important thing is to hold on to your current employees. That means making sure they feel valued for the work they do.
That starts with offering them competitive, comprehensive benefits packages. It鈥檚 not enough to just compensate them fairly. Employees today want a broader set of benefits that includes perks such as family leave, retirement, mental health support, and wellness benefits.
You should also offer them training opportunities to sharpen their skills or develop new ones to further their careers. 鈥淓mployee training can focus on specialized skills, new technology or safety-related topics,鈥� notes insurance brokerage firm . They recommend identifying skills gaps and then planning training opportunities around them.
The majority of workers in the construction industry are older white men. In addition to the previous statistics about the aging workforce, 2022 data shows women make up only about 11 percent of the construction workforce and that 87 percent of the workforce is white.
There is a huge opportunity for trade contractors to diversify their workforces to fill their skills gaps.
鈥淭o get ahead in this industry, we have to go to the people that we haven鈥檛 been going to, which are people of color and women, in order to fill the labor shortage,鈥� says , founder and president of LMS General Contractors.
Doing that requires you to reach out to underrepresented groups including women, ethnic minorities, and young people. To find those people, look for talent within a range of nontraditional sources, suggest McKinsey & Company鈥檚 . Consider veteran-transition programs, formerly incarcerated individuals, and others to find more diverse talent, they write.
You may not need to hire as many people as you think. It鈥檚 possible that you can do more with the team you already have by using construction project management software to create efficiencies in your business that would allow your employees to be more productive. The technology enables you to:
An increase in worker productivity is one of the key benefits Eckstine Electrical has experienced since adopting the eSUB platform. Lead Project Coordinator Renee McEntee says the employee productivity has increased by ten to 25 percent each week since they started using eSUB. The technology has enabled them to do more with the same team which mitigates the impact of the labor shortage and skills gaps.
To see how 678体育下载链接 can help you overcome a labor shortage,
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