The much-publicized labor shortage isn’t set to ease anytime soon, according to a newly released survey conducted jointly by the Associated General Contractors of America and Autodesk. A full 80% of the 2,500 respondents indicated they are having a tough time filling hourly craft positions, and around the same percentages hold true region by region. Fifty-six percent of firms reported difficulties filling salary positions.
In addition, 81% of firms responded it will continue to be hard — or even get harder — to find craft workers in the short term, especially given the growing demand for construction workers. From July 2017 to July 2018, construction employment expanded in 281 out of the 358 metro areas AGC tracks.
Ken Simonson, chief economist for AGC, described the labor shortage as “significant and widespread.” Meanwhile, many contractors have withering confidence in their local pipelines’ ability to supply quality craft personnel, he said, and companies are increasingly taking a longer time to fill positions despite a shrinking pool of experienced candidates to choose from.
In an effort to attract more candidates, 62% of companies have increased base pay rates in the last year, the study found, and a quarter of firms have improved employee benefits or are offering various types of bonus structures. Nearly half of respondents said they’ve started or increased in-house training over the past year, while a third hired interns, a third used staffing firms, more than a quarter relied more heavily on sub and specialty contractors, and others paid more overtime to their existing employees.
Simonson reported that 25% are adopting methods to reduce onsite work time, such as lean construction, virtual construction, offsite prefabrication and BIM. An equal percentage are employing labor-saving equipment like drones, GPS, laser-guided equipment and 3D printing.
Almost half (44%) of the responding firms indicated labor shortages caused them to lengthen completion time for projects already underway. The labor shortage caused 47% of firms to list higher prices and 27% to push back completion times in their bids, the survey found. Simonson noted that school districts with budgets set long in advance, for example, could feel the pains of such an environment, due to project delays or the need to scale back project scope to meet pre-set budget requirements.
Also, as the national unemployment rate shrinks (it was recorded at 3.9% in July), it will be harder to attract people from other industries. “Every industry out there is competing for workers to a certain extent,” Simonson said.
The tech solution
“This survey is a call to action for the industry at large,” said Sarah Hodges, senior director of the construction business line at Autodesk. “It outlines there’s clearly a need, clearly there are jobs and clearly the time to act is now. The industry is at a tipping point.”
With the global population expected to increase from its current 7.6 billion people to 9.7 billion people by 2050, Hodges said, the world must look at construction in fundamentally different ways. Up to 13,000 new buildings need to be erected per day to meet the needs of this future population. She believes technology is one avenue to address the labor shortage and help achieve the necessary building growth.
“Tech is changing the way we communicate and engage professionally and personally,” she said. Today’s tech enables connectivity between the jobsite and back office like never before, while changing how information is collected and analyzed. Both of these capabilities have the potential to drive efficiencies.
While craft workers may be in short supply, Hodges sees an influx of student workers. Autodesk is trying to arm both groups with technology that not only automates parts of the job, but enhances problem-solving, Hodges said. “We want to be a change agent in terms of how we look at solving problems and making sure we’re communicating the excitement and opportunities around the industry.”
Brian Turmail, senior executive director of public affairs at AGC, agrees tech is changing the landscape, citing its increasing availability, affordability and most importantly, adaptability. “We’re seeing smarter technology, such as a robot that can handle a slightly crooked screw, whereas before it couldn’t,” he said. “We as an association need to spend more time and energy on teaching firms to take advantage of technology. We think the project site 10 years from now will look very different than it does today,” he said.
Dan Gilbane, senior vice president of Gilbane Building Co.’s southwest division, described the present climate as a “rare time in the construction industry” where most geographies and market sectors are in growth mode. Gilbane sees a tremendous opportunity to leverage technology, including the use of drones, 3D printing and virtual environments, he said. Using such technologies, which appeal to the company’s younger workers, has had a “huge impact on our business not only from attracting and retaining talent, but also by accelerating productivity,” he said.
Workforce development plan
AGC also released its re-tooled workforce development plan, first introduced in 2013, which lists steps federal officials can take to support construction workforce development. Since 2013, Congress and the president reauthorized the Carl D. Perkins Vocational and Technical Education Act, boosting funding for construction-focused programs and career pathways. “More work needs to be done, though,” said Simonson. “Solving the chronic workforce shortages will require active support from all levels of government.”
AGC’s updated recommendations include doubling funding for career and technical education throughout a five-year span, as well as allowing more people with construction skills to legally enter the country. AGC also is launching a targeted digital ad recruiting campaign and establishing a workforce venture fund. “The plan serves as a guide to let each player know what they can and should do to prepare the next generation of construction workers,” Simonson said.
“Construction is not a dangerous, dead-end career,” he continued. “It provides great opportunity to use tools and technologies of many kinds.”