Today's Labor Market: The Search for Skilled Workers

11/30/2015 - By Zachary Farrington

-This excerpt is from our Winter 2016 Dimensions Newsletter-

A recurring topic of conversation at many construction trade association meetings these days is the shortage of skilled labor. Attracting and retaining experienced project managers and supervisors is always a challenge, but these days a shortage of skilled trades is also a concern.

The recent headlines on one national trade organization’s website summed up the situation succinctly: “Construction Unemployment Falls to 14-Year Low” and “Data Point to Looming Worker Shortage.”

Of course, a shortage of skilled workers is a predictable consequence of a recovering economy. Most contractors would agree this problem is certainly preferable to the opposite situation just a few years ago, when workers were plentiful but projects were scarce.

Nevertheless, today’s relatively tight labor market can present challenges that can limit your ability to take advantage of growth opportunities. While there are no simple answers, many contractors are finding certain practices that are useful for coping with the shortage.

An Uneven Shortage
Any search for solutions should begin with the recognition that today’s labor market is not uniformly tight. There are significant regional variations in construction employment.
What’s more, various industry sectors and subsectors are also experiencing significantly different growth rates.

Only a month before it reported on record high levels of construction industry employment, the same trade organization website featured this headline: “Construction Employment Declines in Half of the States as Congress Seeks New Way to Pay for Transportation Upgrades.”

Researching and understanding these regional and sector variations can provide some insights into where skilled workers might be found. For example, just a few years ago the booming oil and natural gas industries were absorbing many workers from the construction trades. Today, as the oil and gas industries’ growth rates are slowing, some contractors in other sectors and other regions are reaching out to lure workers back.

Searching for Short-Term Solutions
Most contractors are familiar with local sources of interim workers to get them through a short-term labor shortage. While trade association bulletin boards generally focus on project managers and supervisory level personnel, some do list crafts and trades workers as well.

Temporary agencies that specialize in construction trades are another option. There can be significant costs associated with this approach, but the costs of missing a deadline due to a labor shortage could make this a practical alternative.

Perhaps the least desirable approach to a labor shortage is to simply outbid your competitors in an attempt to lure trained workers away from other jobs. But beyond the obvious cost disadvantage, this practice can cause a number of problems with your peers.

It also could be argued that this approach is most likely to attract workers who are less productive — and certainly less stable — than their more loyal coworkers. While desperate times sometimes call for desperate measures, other approaches will generally yield better results.

Taking a Long-Term View
Many trade associations have longstanding programs designed to encourage promising young workers to consider the possibility of a career in the construction trades. But individual companies can also take proactive steps to recruit future employees.

Larger companies may find it makes sense to develop their own internal training program once their workforce reaches sufficient size to make it cost-effective. It might also be practical to hire a full-time recruiter who’s responsible for anticipating future labor shortages and taking steps to prepare for them.

In addition to establishing formal apprenticeship programs, some contractors have had success partnering with local technical schools, community colleges and even high schools. Offering to pay for training is one way for even small to mid-sized contractors to demonstrate their commitment to offering promising careers.

Do you have other questions about managing a construction business in today’s economy? Please give us a call to discuss them.