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By: Kendall Jones on August 30th, 2016

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Addressing the Construction Labor Shortage

Industry News | Blog Posts | Operating Insights

The construction industry is in the midst of a growing labor shortage. Just this month I’ve run across a half dozen local news reports of construction worker shortages across the country. Construction firms in Phoenix, AZ; Bradenton and Sarasota, FL; Long Island, NY and the Lowcountry of South Carolina, which includes Charleston, are having difficulties finding enough skilled workers to meet demand. These aren’t isolated events. Every month you’re bound to find new reports of areas feeling the pinch.

It’s not a new story either. Reports of a looming skilled worker shortage go back to when the construction industry was starting its recovery from the Great Recession. Places like Arizona, Florida and Texas were already starting to feel the crunch near the end of 2012. As the economic recovery progressed and construction activity increased, it became apparent that many of those workers were not coming back.

For the past few years, a number of corporations and industry associations involved in the construction industry have been calling for reforms and reauthorization of the Carl D. Perkins Career and Technical Education Improvement Act of 2006 aimed at increasing quality technical education to bolster the economy. Reauthorization of the Perkins Act is key in providing enough students with the skills needed to meet the needs of industries like construction and manufacturing.

In July, the House Education and Workforce Committee passed the Strengthening Career and Technical Education for the 21st Century Act (H.R. 5587) with a unanimous vote of 37-0. One of the key provisions includes partnering with industries to align career and technical education programs with in-demand jobs. Other components of the bill include incentivizing programs for attaining industry-recognized certifications and to incorporate work-based learning with dual enrollment in postsecondary education or training. All of these are of significant importance to a construction industry poised to add close to a million jobs over the next decade.

Another bill, the Critical Thinking, Collaboration, Communication, and Creativity for Careers Act, or the Four C's for Careers Act (H.R. 5663), was also introduced last month. One of the sponsors of the bill, Rep. Ryan Costello (R-PA), had this to say, “This legislation involves the active participation and feedback of the industries that need workers, and we have customized it to help future employees gain the skills necessary to be career-ready. We are very excited about it.” The Senate Health, Education, Labor and Pensions Committee is also working on a Perkins reauthorization bill which hopefully will be introduced when they return from their summer recess next month.

The construction industry lost around 2.3 million jobs during the downturn. Between 2011 and the end of 2015, the construction industry has added back only 1.13 million of those jobs. Despite growing reports of skilled labor shortages, the construction industry as a whole was adding jobs at a healthy pace. In 2013, 211,000 jobs were added and the industry added 362,000 jobs in 2014 according to the Bureau of Labor Statistics (BLS). In 2015 another 296,000 jobs were added.

So far this year, the construction industry has only added 55,000 jobs, having shed jobs in April, May and June. Even in July when construction employment increased by 14,000 jobs nationwide, the Associated General Contractors (AGC) reported that it declined in 27 states and remained flat in Alaska for the month.

In a previous post, we discussed How Construction Companies Can Beat a Growing Labor Shortage. That article focused on how employers can set themselves apart for the increasing competition to attract the best workers as well as some programs geared toward attracting the younger generation to consider careers in construction. There's no "magic bullet" to solving the labor shortage. It's going to take a multitude of solutions and approaches working in concert with each other to create a pipeline of workers to meet the growing demands of construction for the next 10, 20 or 30 years.