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Innovation, Inclusion May Help Ease Construction Labor Shortage

The industry continues to struggle to keep up with demand

The current boom economy in the U.S. benefits many industries and regions of the country, but poses challenges for others. Construction shares one such challenge with other blue-collar industries, such as health care support, transportation, and food service – chronic labor shortages. As incomes rise, so does the market for new or remodeled homes, businesses, and other facilities. And there is simply not enough labor to keep up with demand.

This problem is not new to the industry – nor to our readers – and companies are attempting to compensate with increased wages, on-the-job training, sweetened benefits, and outreach to previously untapped sources of workers.

Labor lull during the building boom

With unemployment at an enviable 3.7 percent (the lowest it’s been since 1969), and an estimated $1.3 trillion in construction spending expected this year, the industry sits in the middle of a perfect storm of bad timing. Mike Bellaman, president and CEO of the trade group Associated Builders and Contractors, projects that there will be 400,000 to 500,000 new construction jobs to be filled within the next year. If Washington passes a significant infrastructure package, that number could climb to include an additional 700,000 jobs.

These severe labor shortages affect every region of the country and both union and open-shop firms. Reasons for the shortfalls include:

  • As the baby boomers retire, companies find it difficult to find applicants willing to perform physically demanding work.
  • A growing number of potential employees have claimed disability and are no longer in the labor force.
  • The opioid epidemic predominantly affects workers without a bachelor’s degree.
  • Stricter controls on immigration have limited the number of workers who would have normally filled construction jobs.

Statistics compiled by the Associated General Contractors (AGC) of America are sobering:

  • Eighty percent of construction companies struggle to fill craft positions and 56 percent have problems filling salaried positions.
  • The industry has particular trouble finding carpenters, pipe layers, concrete workers, sheet metal workers, and pipefitters/welders, as well as engineers, project managers/supervisors, quality control, estimating, and BIM personnel.
  • A majority of firms surveyed fear that it will only get harder to fill these positions in the coming year.

Faced with a potentially daunting staff shortfall, construction firms are finding solutions in several key areas.

Compensation

According to the AGC survey, 62 percent of firms say they have raised hourly and salaried wages for workers, 24 percent have stepped up their benefits, and one-in-four provide bonuses and other perks. These can include health insurance, annual raises, paid time off, and student loan repayment. Workers frequently have competitive offers from multiple firms, and some specialties like welding may pay six figures in some areas.

Recruitment

The labor shortage has forced construction companies to look outside of their traditional employment sources. Forty-eight percent have created or become affiliated with career-building programs at nearby high schools and colleges, where some students may be looking for career paths that don’t require a four-year degree. Thirty-two percent use staffing firms, and 28 percent find themselves using more sub- and specialty contractors.

The industry has also come to rely on a pool of applicants from a more diverse range of backgrounds, including veterans, young students, trade school graduates, foster children nearing age 18, previously incarcerated workers, and women, who have begun to fill positions in growing numbers.

Training

Even if these recruitment efforts bear fruit, new construction workers often lack the proper training and skills to adequately perform their jobs. As a result, 46 percent of firms say they now need to spend significant amounts of time training staff in-house on everything from equipment to protocols to technology.

One solution comes from the Project Jumpstart apprenticeship program in Baltimore, which provides a 90-hour course on the ins and outs of construction work and then helps place its graduates in area jobs. A majority of its students (75 percent) have had some form of interaction with the criminal justice system.

Innovation Can Help

One solution that 25 percent of firms have used to counteract the labor shortage is innovation that improves efficiency and reduces time needed on-site. This includes equipment such as robots, 3D printers, drones, and battery-powered alternative vehicles. Triple E Equipment can help solve your firm’s labor issues with compact, environmentally friendly tools that handle physically demanding work. To find out more, visit our cost savings calendar, conveniently located at the bottom of every product page on our site.

You can also read our other blog on this topic: A Labor Shortage Curbs Excitement Over the Construction Boom.