Navigating the Ever-Tightening Labor Crunch

August 26, 2019 Conley Smith

It’s been a long, hot, busy summer for most everyone in the construction industry. If you’ve had a moment to catch your breath, you’ve probably noticed backlogs are still running nearly nine months and demand for all types of construction workers—from hourly craft jobs to emerging roles like construction technologists—has held steady.

Officially, the U.S. Bureau of Labor Statistics reported the construction industry added 4,000 new jobs in July, with the market expanding by 202,000 net jobs year-over-year—an increase of 2.8%.

Even as tariff fears and stock market jitters fuel worries of a coming recession, data from the Labor Department showed an increased need for construction workers in 42 states between June 2018 and June 2019. As a result of this robust demand, Associated General Contractors of America (AGC) chief economist Ken Simonson said many contractors are continuing to struggle to find and retain workers.

Historic Unemployment Drives Need for Reforms

With unemployment rates at historic lows in many states, the AGC wants to see more funding for career and technical education programs, along with immigration reforms. They want to make it easier for schools to set up construction-focused programs while immigration reform would allow more people with construction skills to legally enter the country.

“Contractors are eager to add even more high-paying middle-class jobs if they could only find more qualified workers to hire,” said Stephen E. Sandherr, the association’s chief executive officer. “The federal government should make it easier to prepare and attract more people into construction. Such steps will provide significant benefits to the broader economy.”

With or without federal reforms, contractors are struggling to stay competitive and attract the next generation of workers. Many in the construction industry are looking to adopt new strategies that will help them grow and maintain the labor pool.

GCs and subcontractors must consider a wide range of options. This includes empowering the current workforce to simply work smarter by using new construction technology. Others believe lean construction is the answer to growing their business in an ever-tightening labor market.

Training Workers for Retention

No one will dispute that much of the labor shortage is the result of shifting demographics. Baby boomers, who have long held many mid- to upper-level positions, are retiring. Who do contractors turn to when filling these roles? With a growing gap between entry-level and senior-level candidates, contractors must think about training and then promoting from within to fill these roles.

With an overall unemployment rate of just 3.7%, the U.S. Bureau of Labor Statistics reported more than 300,000 monthly construction job openings in May, June, and July. This means training the crew you have now to avoid turnover could be key to making sure your business stays profitable and growing.

With a reputation of being one of the hardest industries to recruit and retain talent, the construction industry needs to find new ways to embrace a new generation of learning workers. While the industry will always need skilled craft workers, they will also need learning workers, whose skills are constantly evolving.

Attracting the Next Generation with Tech

Flipping the script on this widening talent gap will likely mean changing the image of construction from the ground-up. Younger workers are likely to be enticed by construction jobs that are both high-paying and offer the latest and greatest tech tools.

Writing in an AGC publication, Janice Clusserath, director of human resources at construction firm McKinstry, noted three key tech milestones that will accelerate this transition:

  • By 2025, augmented reality (AR) and virtual reality (VR) will emerge as standard on-the-job training tools, providing a platform for workers to gain new knowledge and skills at the jobsite.
  • By 2030, highly skilled veteran workers will move from the field to central, remote operations. These veteran workers will train and lead new, generalist workers virtually through AR/VR and other technology platforms.
  • By 2035, the transition to learning workers will be complete. Instead of having developed skillsets, workers will learn skills as they go, adapting and applying their learning to new situations and issues as they arise.

One builder puts it bluntly: “The benches are empty. It’s impacting the future workload.” Others note that contractors can’t wait for trade associations and government initiatives to resolve the labor crunch.

Getting Creative to Attract New Workers

With modern construction sites now deploying drones, automated bricklayers, 3D printers, and other IoT devices, some in the industry believe the solution is more obvious. They say the construction industry should go ahead and partner with universities, community colleges, and unions to rethink apprenticeship programs.

Other contractors will consider doing their own reverse-mentoring. For example, Boston-based Suffolk Construction tried pairing more senior employees with young grads, who have the know-how to lead 3D scanning efforts. In exchange, the younger workers were able to learn management and strategy tips from an experienced superintendent.

One thing is clear: today’s construction firms are realizing emerging technology can be a great hiring tool in their efforts to combat the current labor shortage. In turn, technology can help their business be more productive and profitable.

Need help finding, hiring, and retaining construction workers? Download our How to Hire a Great Estimator Guide  now. You’ll get step-by-step advice on everything from writing a winning job description to identifying top candidates.

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