compass

Combatting the Construction Labor Shortage

Gibson
By Gibson - Jan 7, 2015 6:30:00 AM

Construction_Labor_ShortageThe demand for construction is increasing across the nation. This is great news for an industry that was hit hard by the recession. But is there enough labor to meet the needs?

No. At least not in terms of skilled labor.

The Associated General Contractors of America (AGC of America) reports that 83% of contractors are having difficulty finding qualified skilled labor to meet the demand. 

The topic is popping up in publications nationwide. You can find an article about the concerns related to nearly every region of the US.

  • “Construction labor shortage raises safety concerns” Business Insurance 
  • “Construction companies face worker shortage” USA Today 
  • “Skilled worker shortage looms for U.S. construction firms” Reuters 
  • “Construction industry missing key tool: skilled workers” NPR 

Understanding The Shortage

The recession caused a tremendous decline in the need for labor in the construction industry, with layoffs of approximately 2 million workers. But today, as the economy improves and the demand for construction increases, the industry is facing a significant shortage of skilled workers.

The key point of this issue is the lack of skilled workers. Unemployment rates are still high in many regions, and there are still quite a few job seekers out there. The problem is that those who are responding to job openings in the construction industry are inexperienced.

The experienced construction workers who lost their jobs in the recession couldn’t wait around for the economy to bounce back; they looked to other industries for new careers or retired from the workforce altogether. This leaves the construction industry with inexperienced workers and an aging workforce, both present challenges.

The Impact

Numerous studies have shown that inexperienced workers are more likely to be injured. And older workers, while generally having fewer incidents, their injuries are often more severe – resulting in more days lost at work and higher medical expenses.

As firms struggle to fill job openings, projects experience delays which slow community economic growth. Additionally, new projects could see less bids coming in as companies lack the manpower to meet the desired deadlines – which could result in higher costs for projects.

Ken Simonson, Chief Economist for AGC of America, addressed the long-term impact of labor shortages on a recent visit to Grand Rapids, Michigan: “Worker shortages have the potential to undermine the broader economic growth by needlessly delaying and inflating the cost of construction and development. The consequences of inaction for both the construction industry and the broader economy are simply too severe not to act.” 

What Can Be Done – On A National Level?

Most argue that new career and technical school programs are critical to solving the shortages. This would come in the form of increased support of career and technical education, and reforms to legislation regarding vocational education program funding, among other actions.

In 2014, legislative action was taken related to workforce development through the Workforce Innovation and Opportunity Act (WIOA). The Associated Builders and Contractors (ABC) took this as important progress in combating the labor shortage. ABC Vice President of Government Affairs Geoff Burr said: “[The] passage of WIOA is an important step forward in ensuring that local stakeholders are involved in shaping job training efforts and that more job seekers have access to job training programs that will prepare them for career opportunities in their local economies.”

Meanwhile, the AGC of America created a plan to address the issue: “Preparing the Next Generation of Skilled Construction Workers: A Workforce Development Plan for the 21st Century.” Simonson says the plan: “identifies steps, like increasing funding for vocational education and making it easier to establish construction-focused schools, designed to reinvigorate the pipeline for new construction workers.” 

What Can Be Done – In Your Organization?

But more immediately, what actions can you take within your company?

  • Develop a safety culture. Creating a safety culture that permeates all levels of the organization is a way to fight the problem of accidents with inexperienced workers. For tips about developing a proactive safety culture, check out the “Safety Culture: Setting Your Sights At Zero” blog where Gibson Principal Art Jacobs shares his insights. 
  • Implement pre-hiring assessments. A safety culture starts at the beginning. Take action to make sure your hiring process supports the search for candidates who hold the same beliefs about accident prevention and are open to the extensive training required to successfully perform the job. The interview process should not only look for the abilities in candidates, but also for their attitude, aptitude, and adaptability. Consider what screening tools and skills assessments could be used in the hiring process.
  • Improved training and promote knowledge transfer. Regular training is a necessity for your workforce to keep their skills up-to-date and for the assimilation of new workers. It is also important to encourage the transfer of skills and knowledge from your veterans to your new employees. Put them in teams to provide mentor opportunities. Both groups can learn a lot from each other. And the sharing of the intricacies of your company is essential for long-term success.
  • Aging workforce strategies. Your veterans are some of your most loyal and experienced employees. Make sure you are being proactive about managing their health and safety in the workplace. 
  • Support the efforts to increase career and technical education. This could mean getting involved with national organizations as they seek reform and increased vocational education, or even reaching out to a local vocational school.

Don’t get bogged down by the challenges presented with the labor shortage. Be proactive with your recruiting, hiring, and workforce management strategies to help combat this issue.

bg-img14.jpg

Join Our Newsletter

Join over 2,000 other marketing pros in subscribing to the award-winning our Blog.

At Gibson, we are advisors and consultants, not just insurance brokers. What’s the difference? Insurance is a component of risk management, not the only solution to risk. We provide counsel and advice on complex business and people issues that go far beyond the scope of an insurance policy. This approach provides value and sophisticated protection.

Leave a comment

Search

Subscribe to the Blog

Popular Blog Posts