Construction and engineering mergers and acquisition reached record highs last year and the sector continues to see incredible activity this year. These trends demonstrate the strength of the construction market, but also means firms need to rethink their hiring strategies.
Merger and Acquisition Trends
Between 2010 and 2017, the annual number of mergers and acquisitions was between 390 and 440. Last year, an astounding 534 deals were made, which is almost a 27% increase over the previous year. This is also the highest number of mergers and acquisitions ever recorded for a single year. Part of the reason for this growth is that more and more baby boomers are retiring. Succession plans often include mergers and acquisitions. Buyer interest is also high right now because companies are looking to diversify and scale. The construction and engineering areas that are seeing the most activity are civil infrastructure, energy, oil and power companies, and building.
Competitive Market
One thing that the increase of mergers and acquisitions indicates is that the market is highly competitive right now. Companies are trying to make themselves more competitive so they’re shedding their less profitable ventures and acquiring new ventures that allow them to improve their overall offerings. Acquisitions of civil infrastructure firms have been especially high, in part, because the pressure to find labor has been particularly challenging. Companies have struggled to find enough skilled professionals to perform the projects they have on their plate. This, in turn, makes it hard to stay competitive and leaves them vulnerable to acquisition.
What This Means for Hiring
With the demand for construction services so high and the shortage of talent, hiring and recruiting strategies are more important than ever. As baby boomers continue to retire, you need to improve your appeal to professionals under 30. Educating younger professionals about the high salaries and great benefits construction and engineering jobs offer helps. It also helps to illustrate a clear path for career advancement. Meanwhile, you want to interview candidates continuously and work closely with a highly successful construction recruiter to better understand the intricacies of the current employment market. These top industry recruiters will give you access to hard-to-attain passive candidates. More importantly, the strongest recruiters will give the best chance that your competitor’s star employee will say yes to your offer, resign with their current company, turn down their counteroffer, and start with you on the day they’re supposed to show up.
While 2019 will likely see less construction and engineering mergers and acquisitions than 2018 since many firms have recently partaken in such activity, it is still expected to be another strong year for mergers and acquisitions. Firms are still trying to diversify their holdings and make themselves more competitive. Eventually, things will level off, but for now the industry will experience a lot of change and uncertainty.
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