The Growing Challenge of Construction Staffing: Addressing the Skilled Labor Shortage
The construction industry is grappling with a significant challenge that is impacting growth and efficiency: a skilled labor shortage exacerbated by an aging workforce and high retirement rates. As baby boomers continue to exit the workforce, the sector struggles to replace these seasoned workers with new, equally skilled personnel. This situation highlights the pressing need for effective construction staffing solutions. In this article, we delve into the causes, implications, and potential solutions to this skilled labor shortage, with a focus on how Skillit can bridge the gap.
What Is Causing the Skilled Labor Shortage in Construction?
Aging Workforce
The construction industry is heavily impacted by an aging workforce. According to the Bureau of Labor Statistics, approximately 20% of construction workers are over the age of 55, with many nearing retirement. This demographic shift is significant as it results in a loss of workers who hold critical skills and decades of invaluable industry knowledge.
Lack of New Entrants
The industry is also facing a decline in the number of young people entering the construction field. This trend is partly due to societal emphasis on obtaining four-year college degrees and the perceived stigma associated with skilled labor jobs. In fact, a survey by the National Association of Home Builders revealed that only 3% of young adults who know their career path are interested in construction.
Technological Advancements
As construction technologies evolve, the need for skilled labor that can work with these new technologies is growing. The existing workforce is required to continually adapt to these changes, which necessitates ongoing training and education that many may not pursue.
How Does This Shortage Affect the Construction Industry?
The labor shortage impacts the construction industry in several critical ways. Overall, the skilled trades shortage can impact top ENR contractors' ability to control costs, grow their business, and keep their workforce engaged and stable, necessitating innovative strategies in workforce development and management to overcome these obstacles.
Project Delays: Insufficient staffing can lead to significant delays in project timelines. A report from Associated General Contractors of America indicates that 81% of construction firms are having difficulty filling both salaried and hourly craft positions, which is directly impacting their project completion times.
Increased Costs: The demand for skilled workers often drives wages higher. The scarcity of skilled tradespeople can drive up labor costs, making it harder for contractors to maintain or improve profit margins. Higher wages and increased competition for skilled workers can erode profitability, forcing companies to either absorb these costs or pass them on to clients, potentially impacting their competitive edge.The construction industry has seen a 3.2% increase in labor costs due to the shortage, according to the Turner Building Cost Index.
Quality Concerns: With fewer qualified workers available, the quality of work can suffer, potentially leading to safety concerns and decreased customer satisfaction.
Missed Expansion Opportunities: Geographic expansion requires a reliable and skilled workforce to meet local demands and maintain quality. The shortage of craft workers can limit a contractor's ability to enter new markets effectively, as they may struggle to find qualified workers in unfamiliar areas. This can delay project timelines and increase operational risks, hindering successful expansion.
Poor Retention Rates: Retaining skilled employees becomes more challenging when there is a general shortage in the labor market. Contractors may face higher turnover rates as workers are lured by better offers or more attractive opportunities elsewhere. This instability can disrupt projects, reduce team cohesion, and increase recruitment and training costs.
The construction industry must address the skilled labor shortage strategically to maintain growth and competitiveness. By understanding the causes of this shortage and implementing effective solutions like those offered by Skillit, companies can ensure they have the skilled workforce necessary to meet the demands of the future.
Invest in Training
Companies should invest in training and apprenticeship programs to equip new workers with the necessary skills and to help current employees adapt to technological changes.
Companies should prioritize investing in training and apprenticeship programs to ensure new workers acquire essential skills and help current employees adapt to evolving technologies. With the U.S. Bureau of Labor Statistics forecasting 1.9 million new construction jobs by 2034, workforce development is more critical than ever. Leading ENR contractors like Bechtel provide thousands of courses covering leadership, professional development, technical skills, sustainability, new languages, safety, ethics, and more, with many available online. Likewise, smaller firms have achieved success by partnering with local trade schools and community colleges to offer paid internships, often leading to full-time employment for the participants.
Improve Workplace Culture
Creating a positive workplace culture and providing competitive compensation can attract younger generations to the construction industry.
As Gen Z enters the workforce, construction companies must adapt to attract and retain young talent. This generation values work-life balance, flexibility, and mental health support, with over a third considering employer-provided mental health coverage essential. To appeal to younger workers, the construction industry needs to focus on creating a positive workplace culture and offering competitive compensation.
Leading companies like Suffolk Construction are already prioritizing mental health. Suffolk's chairman and CEO, John F. Fish, has advocated for including suicide awareness and prevention training in OSHA curricula, highlighting a critical issue: more construction workers die annually from suicide than from all other workplace-related fatalities combined.
By addressing these concerns and adapting to the evolving needs of the workforce, construction companies can position themselves to attract the next generation of talent and build a more resilient industry.
Utilize Staffing Solutions
In today’s fast-paced construction landscape, agile staffing solutions are invaluable. Platforms like Skillit can help companies quickly fill gaps in their workforce without compromising on the quality of their hires.
Platforms like Skillit enable companies to swiftly address workforce gaps while maintaining high hiring standards. Unlike general job sites such as Monster, Indeed, and ZipRecruiter, which often fall short in providing the specialized information needed for skilled trades, Skillit simplifies the recruitment process, making it faster and more efficient to match its vast network of qualified construction workers with projects that need their skills.
FAQ
What is the main cause of the skilled labor shortage in construction?
The main cause is the retirement of the aging workforce coupled with the lack of new entrants into the field.
How does Skillit help address the labor shortage in construction?
Skillit connects construction companies with a wide network of skilled professionals and streamlines the hiring process, making it easier and quicker to find the right workers for specific projects.
What can companies do to attract more young workers to the construction industry?
Companies can invest in training programs, improve workplace culture, and provide competitive compensation to make the construction industry more attractive to young workers.
How does the skilled labor shortage affect construction projects?
The shortage can lead to project delays, increased costs, and concerns over the quality and safety of construction projects.