Labor Shortage Rebound

How smart companies regain & retain skilled talent in the construction industry

The skilled labor shortage spans several major industries in the United States (and overseas)—a trend that has hit construction particularly hard in recent years. During the Great Recession, the construction industry hit some low lows, but along with the problems of a declining economy comes the hope of an eventual recovery. The construction industry achieved a notable resurgence this year, with growth across commercial and residential projects, including roads, bridges, and other infrastructure.

Unfortunately, during the recession, economic decline forced a number of workers—many of whom worked years to master their trade talents—to move out of construction and pursue work and active income in other industries. Thankfully, there has been an increase in construction activity over the past few years, which is welcome news for the remaining contractors who have been waiting patiently for the other shoe to drop. Because a large number of skilled workers have not returned to the industry, employers are left to identify suitable replacements as industry growth continues.

It looks like we’re on track to continue that growth, too. Last month alone, national construction employment added 16,000 new jobs on a seasonally adjusted basis in June, according to an analysis of data from the U.S. Bureau of Labor Statistics by Associated Builders and Contractors (ABC). Overall, construction employment expanded 3.1 percent on a year-over-year basis, easily outpacing the year-over-year growth rate of 1.6 percent for all nonfarm industries.

Construction associations following and reporting on the growth seem cautiously optimistic. According to ABC, the nonresidential construction sector added 10,300 net new jobs in June after adding 4,900 in May, while the residential sector added 6,000 net jobs for the month. A recent survey conducted by Associated General Contractors of America (AGC) reports that 73 percent of firms say they will increase their headcount this year. Sixty-six percent of firms report their planned hiring will increase total headcount between 1 and 25 percent, while 6 percent report they will expand their headcount by more than 25 percent this year.

According to the Bureau of Labor Statistics, there are 150,000 unfilled construction jobs in the United States. In a January 2017 AGC survey, results showed that 73 percent of firms had a hard time finding qualified workers.

So, here we stand: projects on the backlog. Successful companies eager to jump in. But, how many workers are left that can actually get the job done? And how do we find them?

According to ABC Chief Economist Anirban Basu, “Job gains in June were likely aided by high school and post-secondary graduations, resulting in a surge in new job seekers and more opportunities to fill available job openings. America continues to face structural shortfalls in skilled human capital, something that construction industry leaders know all too well.”

Construction employers are left to wonder what next steps could help them solve their problems. Currently in the United States, only one tradesman is entering the industry for every four that leave. With the effects of the Great Recession and the exit of a great number of industry veterans, the unfortunate result leaves the industry with a lack of experienced workers.

Across the country, high schools and technical colleges are creating training programs to generate interest from the next generation of workers in construction and/or specialty trades, offering training opportunities at colleges or through on-the-job apprenticeships. You may have seen Mike Rowe parading the nation and waxing poetic on the importance of grabbing the attention of this new crop of workers through his work with the GO BUILD program. In Alabama, Georgia, Tennessee and California, GO BUILD works as a comprehensive workforce development initiative that seeks to enhance the image of the construction industry and inform young people, parents and educators about opportunities in the skilled trades, because a “four-year degree isn’t the only way to make a living.” Following initiatives like this, the industry is hoping to create a new batch of engaged workers with the right experience required of a construction jobsite.

For employers courting this younger generation of skilled tradesmen and women, maintaining efforts to hire and retain them has become a challenge. The new generation is alleged to be self-absorbed, demanding and focused on their own needs. But, these complaints are nothing new—it’s a song that’s been sung by everyone—the boomers, Generation X, and let’s not forget those damn Millennials (they’re everywhere). “Old, young, we’re too different and we’ll never understand each other.” Unfortunately, generational gaps in management and communication will always exist, but the more savvy management teams have turned to technology to help them solve that problem.

There’s no denying that technology is transforming construction, from telematics to timecards, from robotics to wearable tech. But how does tech translate to the needs of an employer in a human resources (HR) setting? Lately, construction employers are looking to HR talent management solutions that provide everything a company needs to manage its entire employee lifecycle, from recruitment to retention.

Today’s leading HR management software platforms are typically cloud-based, and include far-reaching recruiting solutions, automated onboarding programs, powerful resources to enhance learning and performance, forward-thinking communication and feedback tools, streamlined collaboration features, and succession planning solutions.

Reaching, connecting and engaging with the modern job seeker can be challenging, let alone the added pressure of a skilled labor shortage. A modern recruiting strategy should be powered by processes that are easy for the applicant to navigate and simple for the recruiter to manage, all while ensuring legal compliance. The goal is to simplify the functions of employment branding, job distribution, candidate management, and reporting for efficiency and compliance.

With construction job growth on the rise, companies should be thinking forward and preparing a strategy that keeps them ahead of the competition. Finding a solution that accelerates job distribution and retention could be the answer to keeping your company in the lead once the industry completely rebounds from skilled labor shortage.

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