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Work Shortage May Be Slowing

February 25, 2016
 / Operations / 

Recent data suggests the much-discussed worker shortage may be in the process of easing pressure on the quickly booming construction industry. The question, however, is if this is a sign of good things to come or just a temporary, yet unsustainable boost.

"A labor shortage is forcing builders to turn down many contracts."

In 2014, construction industry experts were facing what seemed to be a stifling shortage of skilled laborers. A survey by the Associated General Contractors of America suggested as many as 25 percent of construction companies were being forced to turn down contractsbecause they did not have the manpower to complete them. Many blamed this on the unstable economy, which for several years beginning in late 2007 caused the loss of a huge number of workers. The U.S. Census Bureau estimated around 60 percent of the construction industry's entire workforce left during the worst of the Great Recession. Many of them went to more lucrative jobs in the energy or manufacturing sector, which remained strong for much of the downturn..

Employment tides changing
In recent years, the construction industry has come back in a big way, but the workers haven't. New studies suggest the trend may be changing. The U.S. Bureau of Labor Statistics reported that 31,000 new jobs in construction were added in October. That's equivalent to over four times more than the gains of the previous four months combined. Then in November, another 46,000 construction positions were filled. According to Construction Dive, that leads some to believe the industry has finally turned a corner when it comes to finding labor. Brian Turmail, the senior executive director of public affairs for the AGC, told Construction Dive that he and others were choosing to remain cautiously optimistic about the latest numbers.

"Clearly, during the last two months, the data tells us that firms have all of a sudden had a much easier time finding workers to hire, which prompts the question of where are they finding them," Turmail said.

He and others within the AGC have heard reports of an exodus from the manufacturing and energy sectors, which have now slackened and are posting lower profits than previously. The favorable trajectory of the construction industry, and subsequent rise in average pay, is the main factor in choosing to leave, according to Turmail. Still, finding enough skilled workers for specific tasks is tough, and even the big gains seen recently aren't enough to keep pace with demand.

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Workers getting older
Another major trend the industry faces now is an aging workforce. According to a report by the National Association of Home Builders, as well as data from the latest U.S. Census, the average age of a construction worker is 42, one year older than the average U.S. employee in any occupation. In some states, the median age for construction workers is well beyond the national average, with Maine, New Hampshire and Connecticut reporting a median worker age of 45. Much of the Midwest has construction workforces that are two or three years above average. While the report noted that many of the oldest workers in the industry were in managerial positions, even these jobs face few viable candidates for replacement in the near future. And young workers with the right skills are becoming harder to find.

This has prompted the AGC to create a comprehensive plan to attract, properly train and retain new talent. In a report titled "Preparing the Next Generation of Skilled Construction Workers," the AGC outlined major steps it will take to achieve these wide-reaching goals. Initially, it hopes to successfully campaign for the reform and reinstatement of the Perkins Act, a piece of federal legislation designed to fund training programs in high schools and colleges. The AGC also hopes to encourage private funding for craft training programs, which could infuse the industry with young workers with ample training in key areas of skilled labor. With the new initiative, the AGC aims to eliminate barriers to the employment of military veterans, as well as enact reforms for immigrant workers. Utilizing effective training programs, new recruits will gain greater familiarity with construction safety systems and other essential tools of the trade. When young talent is able to enter the workforce with this working knowledge of construction safety products, it means good things for the industry as a whole.

According to Turmail, the AGC is working to balance short-term goals with long-term objectives in confronting these initiatives. In the short term, Turmail said, the AGC and others in the construction industry must work to help those who are ready to work now. In the long term, however, the industry needs to adopt and maintain sustainable hiring practices that will keep work sites around the country fully staffed for years to come. Perhaps the greatest obstacle to hiring is the prevailing notion that construction doesn't pay or doesn't make for a good career, according to Turmail. With the AGC's workforce development program, as well as similar initiatives being created around the country, industry experts hope to dispel that belief.

A prevailing shortage of skilled labor has negative consequences for the safety of workers, not to mention productivity and efficiency. With the right labor, tools and construction safety systems in place, builders are working toward a better environment for construction professionals to operate within.