Labor shortages prompt calls for big changes in construction industry

The eXchange | June 22, 2021

In the face of widespread and deepening worker shortages, some leaders in the construction industry are advocating for major changes in the way companies go about attracting, developing and retaining talent.

American construction companies will need to expand their combined workforce by 430,000 people in 2021 to meet projected construction levels, according to an analysis of U.S. Bureau of Labor Statistics data by Associated Builders and Contractors (ABC).

Most companies, however, are already having difficulty hiring new staff. In the latest Construction Outlook Survey by the Associated General Contractors of America, 81 percent of construction companies reported having trouble filling both salaried and hourly craft positions, and 72 percent predicted that labor shortages would be the biggest challenge facing their businesses in 2021. And the shortage of construction workers is expected to worsen.

“I read a statistic recently about skilled trades that said about 41 percent of the current workforce is expected to retire by 2031,” said Jennifer Sproul, President of the Maryland Center for Construction Education & Innovation (MCCEI).

The construction industry is already lagging in efforts to replace those retiring workers, Sproul added. One analysis concluded that “for every one new worker who enters the construction workforce, about four retire.”

Growing need for an expanded construction workforce combined with a looming wave of retirements has convinced some thought leaders that the construction industry has to make bold, even radical, workforce development efforts. Those include new internship and apprenticeship programs, technology adoption, diversity initiatives and improving corporate culture.

Industry associations and individual companies are funneling resources (more than $1.5 billion annually according to ABC) into developing new workforce. The BC&E Foundation, for example, has awarded grants to MCCEI. It provides construction-career education to youths and has recently expanded its “Build Your Path” educational series and developed a podcast and video series about career pathways.

“But I honestly don’t think that current workforce development efforts are enough,” Sproul said. “So MCCEI is also focusing our efforts on trying to get industry to realize that business as usual will not solve our workforce problem… If you are on the verge of losing 41 percent of your workforce, the only way to survive is through radical change.”

This spring, MCCEI launched a new webinar series entitled “Shifting the Mindset.” The series reasons that construction companies need to make five fundamental changes to effectively address the challenges of attracting, developing and retaining workers. They are:

Reimagine corporate culture,
Embrace technology and innovation,
Prioritize diversity, equity and inclusion,
Focus on employee training and development, and
Invest in the future workforce.

Small companies, in particular, can’t realistically expect to enact multiple, major changes rapidly. Strategic planning, however, could help companies map out a multi-year plan to improve recruitment and retention. Contractors, Sproul suggested, could realize substantial improvements by focusing on a single initiative each year, such as adopting a particular technology or establishing an internship program. MCCEI is currently looking for small and mid-sized construction companies to participate in an internship program in summer 2022.

At IronShore Contracting, President Gregory Malcolm and Service Manager Steve Lemel have been working to establish a job training program for Baltimore City high school students. IronShore’s vision is to bring in students from the city’s Career and Technical Education programs for an eight-week (or longer) program where the students become part-time employees and learn construction skills on the job.

“I have an opportunity to present a career opportunity to individuals. Hopefully, they will seize it,” said Malcolm, who has hired several high school students for on-the-job training in the past.

IronShore’s workforce development initiative has attracted attention. Siemens recently awarded a $20,000 grant to IronShore to support the program. This spring, City Council President Nick Mosby staged an event at IronShore to advocate for passage of the Dante Barksdale Career and Technology Apprenticeship Fund — a city trust that would offset the cost of providing high school students with training in skilled trades at city businesses.

But setting up an on-the-job training program, such as IronShore’s, faces additional hurdles, Lemel said. For example, OSHA prohibits putting a trainee on a roofing jobsite before they turn 18.

Also, “roofers don’t necessarily make the best teachers or communicators,” Lemel said. “We need to team up with teachers and get guidance from the Department of Labor and create a proper, certified apprenticeship program where apprentices would go to work every day, go to class every day and get paid. That would create a pathway for more people into this industry.”