It is no secret that across the nation exists an often-concerning labor shortage. This problem has plagued the construction industry for an entire decade, continuing to grow ever more significantly with each passing year. In 2011, only 13% of contractors reported cost and labor availability as a notable concern, while in 2020, that number skyrocketed to 85%. During any given month, there is a shortage of 200,000 to 300,000 construction workers, inevitably causing project delays, increased costs, and an overworked skilled workforce.
According to the Associated Builders and Contractors (ABC) analysis, in 2021, construction companies will need to hire 430,000 more workers than they employed in 2020. Even despite the global pandemic, skilled construction workers are still in demand. COVID’s lasting contribution has been to increase pressure on an already understaffed workforce. As is well documented, most laid-off construction workers leave the industry altogether, and with an already struggling labor force, the stress is on.
According to the 2020 Construction Outlook Survey (www.agc.org) by the Associated General Contractors of America (AGC), 81% of construction firms have trouble filling both salaried and hourly craft positions, and 72% anticipate labor shortages to be the biggest hurdle they will face in 2021.
The survey also highlights the results of the skilled labor shortage in construction:
- 57% of companies believe that skilled labor shortage is the biggest challenge to worker health and safety
- 44% of companies have experienced higher project costs
- 40% of companies cite longer completion times
Ultimately, an inexperienced labor force can result in higher injury and fatality rates, increased cost delays, and decreased work quality. These effects can be devastating for smaller construction companies who can’t afford cost delays, mistakes, or worse, a bad reputation.
What has contributed to the labor shortage?
As incredulous as it might seem, there was a surplus of workers at the height of the housing bubble. However, during the 2006-2011 recession, construction companies shed about 2.3 million jobs. Fast-forward ten years, and with the housing market recovered, there are jobs but not enough employees to fill them. According to the Bureau of Labor Statistics, there are currently over 404,000 unfilled construction positions.
What has led to the shortage:
During the recession, skilled workers who were unable to find work joined new industries, many dropping out of the workforce entirely.
Baby Boomers are aging and therefore retiring in record numbers.
The millennials entering the market have unrelated degrees, lack experience, training, and lack the incentive to join the construction industry.
There is a waning interest in the construction industry as it continues to be a late adopter of technology that is attractive to the younger generations. Construction firms compete with other rising industries like healthcare, technology, and engineering.
The construction industry’s landscape is rapidly changing, and the COVID-19 pandemic is not helping. Even with builder and consumer rising confidence and a recovering job market, it isn’t easy to find qualified workers for skilled construction positions. The demand for building activity will continue to grow, but without skilled workers, contractors must adapt and, in many cases, depend on technology.