The two biggest challenges facing the construction industry in the United States today are:
- The shrinking population as the Baby Boomer generation continues to exit the workforce
- Attracting job-seekers to take the place of those that are leaving the industry
While many of us—including me—would like to see the population in the construction industry grow, I’m sure a level rate of growth over the next five years would be acceptable to hiring managers across the country.
Future Implications of the Current Labor Shortage
As our industry is on the cusp of this shift in the workforce, it's up to those of us who are already in construction to be proactive. We must not only be realistic about the implications of the current state of the workforce, but also take initiative in nurturing and supporting the next generation of construction job-seekers.
“The two main issues [the construction industry is] facing are the shortage of skilled labor and the aging workforce,” said Randy Eskelson, President of Schuff Steel Management Company, during a discussion with Arizona Builders Alliance. "We need to recruit the next generation of construction workers and allow them to learn from our current tradesmen.”
The topic is not a hidden secret in the industry. In fact, it’s easy to find articles, roundtables, discussions, interviews, blogs, and more covering the labor shortage across the United States.
He explains that many millennials don’t seem to want to put in the physical labor and hard work the industry demands. Finding young workers who aren’t “fixated on their phones, have a vehicle, and know how to work and are motivated to work” is very difficult today, he said.
“Maybe young kids don’t see the glamour in construction, but it’s great,” Brinkerhoff added. “It’s one of the American Dream businesses.”
As someone who has spent years in construction, I choose to volunteer for the ACE Mentor Program, a program designed to educate high school students about the fields of Architecture, Construction, and Engineering.
I ponder the challenges that construction professionals keep talking about over and over again, and I keep returning to three possible outcomes of the labor shortage.
Three Possible Outcomes for the Future of Construction
1. The Best Outcome
Due to the shrinking population in the construction industry, the way buildings and infrastructure projects are built in America will be revolutionized by different systems (i.e. Technological innovations in pre-fabricated wall systems), products (i.e. modular buildings, prefabricated bathrooms, 3D printing), and delivery methods (i.e. Public-Private Partnerships, or ‘P3’).
The total output of buildings and projects, which I will refer to as the “Gross Construction Product”, or GCP, will either increase due to technological advances in products and systems, or the GCP will remain constant, but with a smaller workforce behind it. Growth in the GCP will undoubtedly create more jobs, but in different areas—such as technology and virtual design—which should eventually lead to an increase in the labor participation rate in the industry.
2. An Acceptable Outcome
Due to the shrinking population in the industry, all stakeholders involved in construction projects will be forced to adjust their schedules to accommodate a smaller workforce. The net effect will be an increase in labor rates in order to maintain the quality standards we have become accustomed to.
Building owners and developers will wind up paying more for a decrease or “net zero effect” in GCP throughout the country, but quality will remain constant and—more importantly—so will safety records.
The main incentive to enter the workforce in the construction industry will be a consistent increase in salaries and hourly wages. In other words, we would simply pay higher wages to workers in order to build the same amount of product that we build today (or less)…with fewer people.
3. The Worst Outcome
Due to the shrinking population in the industry, the only way to continue to increase the GCP in America will be to increase labor rates in order to hire more workers.
Due to constraints on scheduling—or the lack thereof to adjust schedules—the newly hired workers will not receive the proper amount of training before being assigned to job sites/projects, and the net effect will be a reduction in quality levels…for a higher price. While the GCP may increase, quality standards will suffer, and quite possibly, so will safety records.
Brian Binke of Construction Today, an online magazine, recently wrote an article titled “Solving the Skilled Labor Shortage in Construction.” He listed four approaches to attract more skilled workers to the industry. They are:
1. Allocating Funds
Binke suggests “the government to take a portion of the money they dedicate to four-year colleges and put those funds towards getting more people enrolled in trade schools.”
While not everyone may be the “college-type,” doing so would give these students a chance to excel outside of the educational arena. If the government took this step, there would be more collaboration between government, businesses, and the education system, which is a positive step in the right direction.
“With more collaboration, we will see more success with students completing skilled trade programs in community colleges and trade schools,” he adds.
2. The Case for Trade Schools
For many people, it takes less than half the time to complete a training program than to finish a four-year degree program. Additionally, trade school is often a more economical choice with a lower cost.
“Many of the old manufacturing jobs are not coming back,” Binke states. “The days of a human being putting doors on cars all day in an assembly line are over. Robotic technology is completing that work and eliminating those jobs. However, skilled manufacturing jobs will continue to be in demand and skilled workers are needed to fill those positions.”
3. Expanding Awareness
Just as Building Solutions has done through our involvement with the ACE Mentor Program and our Industry Insights blog, creating awareness about the demand for skilled labor is a need. However, there is more room for improvement.
“Businesses need to get more involved on high school and middle school campuses to be a part of the conversation. They need to raise awareness for the demand for skilled construction workers to fill high-paying construction jobs with upward mobility,” Binke says.
“The market will improve as they step up their involvement at high school career days, job fairs, and on-campus events.”
4. Thinking Outside the Box
Binke also suggests “that companies get creative and think outside of the box.” Examples of this include sponsoring scholarships that will help students get through community college training programs or trade school. Often, businesses will guarantee a job with their company when the student completes their training.
“Businesses are optimistic about a change in tides with the labor shortage. The impact of what they can do will improve the market,” Binke says. “Yet, they can’t let up the effort. The effort made now is what’s changing the future in construction.”
The easiest solution to both challenges we face as an industry is to employ the age-old adage “Everyone has their price…” and simply continue to throw money at the problem in the form of higher wages and salaries.
Unfortunately, attempts at this approach have proved futile so far as the labor participation rate continues to decline. I think there’s a better way, and that is for all of us who currently work in the industry to simply grow our professional networks, remain vigilant about finding top talent, and become constant promoters of why the construction industry is a rewarding career path with opportunities abound throughout the country.
If you are reading this, chances are you are either employed by the construction industry or an industry related to construction (i.e. Commercial Real Estate, Education, Healthcare, Aviation, etc.), so I will leave you with one thought:
Are you doing your part to make the next generation aware that we need their help to continue building, maintaining, and—maybe most importantly—repairing America?
The architects, engineers, and tradesmen (and women) who came before us built a beautiful country. We should honor their legacy by ushering in the next wave of brilliant minds, hard workers, and innovative thinkers to carry on what they started…and add to it. They cannot do it without our help — they need us for training, education, and guidance.
But make no mistake — we need their help too.