By Holly Welles
The United States has one of the biggest construction markets globally, hitting $1.31 trillion in value in 2019—a $400 billion increase since 2009. This industry boom, coupled with aging infrastructure and an expansion of education, energy, and healthcare facilities, has led to companies struggling to find enough workers.
According to one survey of 1,312 construction firms, 78% claim they have a hard time filling salaried and hourly positions, and 30% say worker shortages are their company’s biggest concern, above increased competition for projects and safety.
Due to this staffing challenge, contractors say their costs are greater, projects take longer to complete, and they must submit higher bids for potential jobs. They also believe the lack of skilled workers could adversely affect the entire team’s health and safety. On a larger scale, slower and more expensive building projects will hinder economic growth and business development, extending the impact to all sectors.
WHERE IS THE SKILLED LABOR SHORTAGE A PROBLEM?
While the skilled labor shortage is an issue throughout the entire U.S., some states are getting hit harder than others.
Experts believe the construction industry will face a 1.6 million worker shortage by 2022, but many say this issue will impact Louisiana sooner.
The state has seen an influx of proposed projects—such as Sasol’s $16 billion ethanol plant in Westlake and Cheniere Energy’s receiving terminal in Cameron Parish. Despite the money generated from these projects, construction firms lack the workforce to make them happen quickly, with the state expecting a shortage of up to 85,000 workers in the next 3 years.
To address the problem, the Louisiana Association of Business and Industry—along with other groups—has lobbied for better vocational and technical reform. However, any educational reform won’t happen fast enough to meet the increasing demand.
The construction industry in Ohio has seen steady growth in the last few years. Still, many firms worry they will only be able to make as much money as the number of people they can hire will allow for. While there’s work available to do, many companies lack the personnel to complete the projects.
Union halls offer workers for big jobs, but industry experts say the challenge is finding staff to cover calls after 5 p.m. or work overtime shifts, as people want to spend time with family. Plus, they estimate that it takes 6 years to get a new hire in the trade up to speed.
Roger Gingerich, partner-in-charge at a Mayfield Village-based firm, says people in the industry feel less optimistic than in past years despite having substantial business. “We’re trying to keep the people we have. It’s hard to hire new people. But there is more work out there we could be doing.” Companies also have a backlog of projects—work that’s been awarded but not yet started.
In one survey of 210 construction firms in Texas, 84% claim they face ongoing issues hiring skilled hourly workers, while 60% are having difficulty hiring for salaried positions, primarily project managers and supervisors.
According to the Associated General Contractors of America (AGC), one solution could be improved workforce development programs, which the Texas firms surveyed agree are often poor quality. Another option could be to promote better maternity and family leave policies, highlighting a work-life balance struggle similar to that in Ohio.
Of 33 construction firms surveyed in Utah, 81% said they were having a hard time filling positions. Due to this shortage, 58% of Utah businesses say labor issues led to projects taking longer.
In this Western state, the construction industry has outpaced the state economy in adding jobs. From 2017 to 2018, the number of positions in Utah grew 3.3%, while construction jobs increased by 8.6%.
Mark Knold, a senior economist with the Utah Department of Workforce Services, says companies must “be more aggressive getting the labor they want by doing it with dollar bills.” As a result, many firms have found managing costs to be more challenging.
HOW TO OVERCOME THE U.S. SKILLED LABOR SHORTAGE
U.S. construction firms have faced many setbacks regarding skilled labor shortages. However, they can take steps to draw in new talent and minimize the impact of smaller teams.
With a lack of candidates applying for open construction positions, companies must offer competitive salaries to attract interest. They should also consider financial incentives that reward employee loyalty, such as bonuses for projects completed on time or under budget.
Comprehensive training offers a win-win situation for contractors. It results in better-qualified employees for businesses and allows workers to develop within their roles. Employees will feel valued and stick around with a firm that focuses on their upward growth.
With up to 30% of employees misclassified as independent contractors, and these workers not guaranteed a minimum wage or overtime pay, there is little incentive for talent to stick around. Construction firms that want to attract and keep skilled workers should classify employees correctly, offer maternity and parental leave options, and provide paid time off.
Many firms are implementing new technology to combat the lack of employees. Project and document management software, drones, augmented and virtual reality, and robotics can help companies scale their operations and meet growing demand. In one survey, 54% of contractors say they’ve dabbled with at least one type of advanced tech tool, and 39% expect to do so with drone technology within the next 3 years.
THE FUTURE OUTLOOK FOR THE U.S. LABOR SHORTAGE
While the U.S. construction industry is flourishing, companies struggle to keep up with the accompanying labor demands. As the nation attempts to attract new talent, certain states have seen more significant difficulties than others. Fortunately, there are steps construction firms can take to reduce and alleviate the labor shortage.
about the author
Holly Welles is a construction writer with experience covering business growth, labor, and technology.