Workforce Development

Take the pressure off recruiting with a focus on workforce development

I continue to hear it, every time I speak with construction leaders: “We can’t find the people we need to meet the current demand!” Leaders know all the reasons, but the approach they take, leaves room for me to question, is this really a recruitment issue or are there other contributing factors that should be addressed?

According to the Bureau of Labor Statistics, total construction spending is nearing the past high water mark of $1.2 trillion from March of 2006, finishing 2016 at $1.181 trillion. During the downturn, unemployment rose to nearly 13.3 percent in 2011 and has since fallen to 5.2 percent in 2016. Job openings are at a 10-year high.

Over the last year, we’ve seen construction wages increase by 4.3 percent, which was/is desperately needed, even though the American worker has become less productive (down 6 percent). This lack of productivity and increased wages have contributed to shrinking profits for owners (down 2.1 percent). Most organizations continue to respond to these shrinking profits by further controlling costs rather than aggressively investing in the problem.

What Exactly is the Productivity Problem?

In short, we continue to lose our most productive and highly skilled people to retirement while replacing them with inexperienced Generation Xers and Millennials that lack the skills to be successful.

By 2020 there will be a shortage of five million workers, according to a study by Georgetown University’s Center on Education and the Workforce. Because of this, we will continue to be faced with the reality of hiring younger and more inexperienced people.

According to AGC of America Construction Spending and Business Outlook, 73 percent of construction companies are adding jobs in 2017 and they all believe finding skilled talent will be their #1 issue. Increased wages, new recruitment approaches, investments in technology and the image of the industry can and will attract new talent.

Some organizations are seeing great dividends from this strategy as they continue to demonstrate to parents, educators and kids the advantages a career in construction can bring. However, this doesn’t change the fact that newcomers are driving additional costs in other areas, namely safety, productivity and the necessary soft skills needed to work with people. Are we prepared to do what needs to be done to help these newcomers thrive?

In that same study by the AGC of America, 52 percent of respondents stated they are planning to invest in training and development initiatives in 2017. This makes complete sense. If we are going to be bringing in less-skilled workers, we must address the skills gap and safety issues that an inexperienced workforce brings with them.

Combating productivity issues can be accomplished with employee engagement strategies that include building a culture of transparency, feedback, career development, social collaboration, recognition and upward mobility, just to name a few.

Investing in training and development brings about increased employee engagement and ups individual employee performance by 40 percent. It also has a direct correlation decreased turnover, increasing innovation, customer satisfaction and an organization’s overall financial success.

As more organizations look to this approach, they can expect the following results:

  • Reduced pressure on the recruitment function within their organization—higher retention and greater productivity
  • Reduced safety concerns and costs
  • Higher profitability—aggressively investing in engagement and development strategies lead to a 4.5x multiplier in your organization’s financial success (based on linkage case studies using Hay Group’s global normative database)

The next time you are wringing your hands over the pending/current workforce shortages, consider embracing it! We will need to pay more and improve our image if we are to have the sheer numbers necessary to overcome our current and future shortfall. But we can’t stop there. Construction leaders must provide employees with the tools they need to flourish in our industry.

By investing in workforce development strategies, we will be less reliant on net new recruiting because of greater retention rates. These greater retention rates will bring about increased productivity and financial success.

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