The construction industry is facing an interesting challenge right now.
The construction industry is facing an interesting challenge right now: There are plentiful jobs for construction workers but not enough skilled workers. While this is a good problem for workers, it creates additional challenges for construction companies.
The United States' new administration promises new infrastructure, so there's likely to be more work, but without skilled labor, projects may lie dormant until jobs can be filled. The reasons for the worker shortage are multilayered, and the solution isn't as simple as getting the word out that your business is hiring.
The unemployment rate has fluctuated dramatically over the past 10 years. In 2007, unemployment rates were at 4.6 percent; in 2010, it rose to 9.9 percent; and in 2017, it was back down to 4.8 percent. However, the unemployed that remain in the United States, which stands at about 7.5 million, may not be skilled in labor for industries such as construction.
Many experts speculate the reason people aren't rushing to these jobs has a lot to do with the recent recession and a lack of confidence in the economy. More than 2 million laborers were let go during the recession (2007-2011), and it's hard to go back to an industry that relies so heavily on a healthy economy to flourish. People have returned to college to grow their skillset, believing that a white-collar job is the key to security.
Where did the laborers go?
As the construction industry felt the pinch of the recent recession, the oil and gas industry was hand-picking skilled laborers, sometimes straight from the field, offering them more money on the spot.
About 25 percent of the workforce will be 55 years and older by 2018, according to the Bureau of Labor. That means many of the baby-boom generation are starting to retire and this number will continue to increase in the coming years. This leaves gaps in the labor workforce that aren't being filled by younger generations.
Education has decreased
Many students were prepped for four-year colleges and told that having a degree was the key to job security. Vocational programs in high schools across the United States are often vacant, and job skills aren't being taught as frequently anymore.
Now many industries are suffering, including the construction industry, which is having trouble filling positions such as millworkers, plumbers, carpenters, bricklayers, painters and electricians.
Compensation has increased
While it's good news for laborers that the average salary for a skilled worker has gone up, it's not great news for the project owner or the contractor. In a recent Associated General Contractors survey, 73 percent of respondents said they plan to hire more in 2017 – a 7 percent increase compared to the previous year's survey. More than half of those who took the survey said they've had to increase base pay. Others are providing more incentives and bonuses for workers, and they've improved benefits to attract the workers they need.
With about 200,000 construction jobs that haven't been filled, according to the National Association of Homebuilders, compensation has to increase. Incentives and good benefits are a great way to keep current employees, too, which is important, because replacing a worker is much more expensive than it is to keep one. And there's more that the industry can do to secure the workers they need.
Attracting new talent
Part of successfully recruiting more skilled labor rests on the construction industry's shoulders. The industry is beginning to lobby for the return of trade programs to high schools and community colleges to populate the work force again. Construction companies are offering training to their employees to help keep their skills sharp and to help them gain new skills.
Construction companies can recruit oil workers who are no longer making the big bucks on the oil rigs but have the skills for a construction site. They can also consider bringing back the apprenticeship – hire a high school student part time and offer them hands-on training. This is a good way to build loyalty and train new workers for the future of your business.
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