The economy has rebounded and continues to grow since the recession. The demand for new hotels, condominiums, and office buildings is high. Yet the labor shortage in commercial construction has caused an increase in prices and a major slowdown of new projects. Many contractors saw this problem coming – and now it’s here. Today I’ll discuss some of the causes and consequences of this labor shortage.
Moving Out of the Market
One reason that there is a labor shortage in commercial construction is that many in the industry changed careers out of necessity during the recession. When the economy faltered, many construction workers went back to school or went into other industries. Others took the opportunity to retire all together. Many immigrant workers in construction jobs went back to their home countries in search of other opportunities. While the demand for new construction has returned, many of the workers have not.
Impact of the Labor Shortage
Even though overall employment levels are on the rise, employment levels within construction are still far behind their peak in 2008. Most General Contractors have reported a serious shortage. This lack of workers is hindering builders from establishing and maintaining their own workforce as well as from subcontracting other skilled workers such as electricians and brick masons. Many GCs are only getting a single bid on projects instead of several, which drives up costs. Subcontractors are unable to even bid on some construction jobs due to a lack of workers.
On the Horizon
Making matters worse is the fact that many in commercial construction are in their 50s & 60s and are looking to retire soon. And attracting younger workers hasn’t been easy. It seems that we have shifted the focus away from careers in construction into careers that seem more exciting, for young people coming out of high school. Many don’t consider construction and we aren’t encouraging it enough as a viable career. When in fact, most people in construction enjoy what they do, the salaries are higher than many other industries, and companies are starting to offer more benefits and perks than they have in the past.
Innovative Solutions in Commercial Construction
Although the shortage is taking its toll on construction companies and subcontractors, many of them are finding creative ways to help compensate. Some subcontractors are joining forces with other teams to beef up their team size and get the job done. Companies are also realizing they need to do more to attract and retain workers. They are upping their recruitment efforts and looking to collaborate with recruiters as well as team up with trade schools to solve this problem. Partnerships between trade groups, employers and the community are helping to fund programs at community colleges where people can get certified in a skilled trade and move into commercial construction apprenticeships.
The labor shortage continues amid increasing demand for new construction. How do we continue to grow the construction workforce that’s needed? We will continue to explore these issues and address solutions to that question in future blog posts. Stay tuned!
Are you ready to build your dream team?
The Birmingham Group is a tenured construction recruiting firm dedicated to helping you build your dream team. If you are ready to take a proactive approach to recruiting and retention, reach out today to discuss a custom recruitment strategy.