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Workforce Shortages in Construction Industry
Questions regarding which direction the industry is moving toward, or how things are changing seem to be constant. Now, NARI has some definitive answers resulting from the latest study to come from McGraw Hill Construction, in May of this year.
The study looked to examine three primary groups that make up the residential and commercial construction industries. This was comprised of architectural and engineering (A/E) firms (80% architects), general contractors (defined as general contractors, construction managers, design/builders and remodeling firms) and specialty trade contractors (majority from electrical, HVAC/sheet metal and drywall trades).
The study identified two impact points that are adversely affecting the construction industry today and possibly hindering future growth. The first is a decrease in construction jobs because of recent economic conditions, and the second is an aging demographic in the workforce. As the industry evolves into green and other specialty areas, the available workforce continues to fall behind in the skill level needed to fulfill jobs that are in demand, at the moment.
Employment Snapshot from the Last Three Years
According to the data, the construction industry has experienced massive volatility in employment activity from 2008 to 2011. The US Bureau of Labor Statistics reported a 19 percent decrease in employment in the construction industry as a whole. General contractor and trade contractors, however, experienced an even deeper decline as employment was down by 21%.
The study asked respondents about their own experience in employment activity over the last three years. Seventy-nine percent reported hiring employees, 76% reported lay-offs and 65% reported that employees elected to leave their firms. These statistics also reflect the nature of construction, in which labor is often contracted out.
Slight variances in regional data shows how powerful economic influences can be. The Western and Southern regions reported higher layoff incidences, when compared to the Northeast and Midwest regions.
The most common reason cited for hiring was to assist in the management of an increasing workload. This indicates that there is an increase in industry activity, hopefully leading to an increase in available jobs. Even so, general contractors had a larger concern about hiring to replace retirees, and specialty trade contractors were more concerned with hiring experienced workers than the other groups polled.
Workforce Shortages Identified
Two-thirds of respondents had a concern about workforce shortages.
Nearly half of general contractors identified finding skilled craftsmen as their biggest difficulty in hiring by 2014.
Also by 2014, general contractors and A/E firms combined identified the top five skilled labor shortages as:
· Carpentry and millwork (30 percent reported shortage)
· Electrical (24 percent reported shortage)
· HVAC/boilermaker (23 percent reported shortage)
· Concrete finisher/cement mason (20 percent reported shortage)
· Ironwork – steel erection/fabrication/
When asked about reasons for impacting future workforce, all respondents believed loss of knowledge as leaders retire was the top hindrance. Other reasons for this were loss of experience and skills from recent layoffs, low wages driving talent away, a loss of appeal in the construction industry from younger generations and inadequate education for the next generation.