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Blog/February 12, 2013

A Growing Trend: The Talent Shortage in Construction

“For the last two years, there has been a sharp drop in the unemployment rate for former construction workers but not a corresponding increase in construction industry growth. That means those workers who have been unemployed will likely find other types of employment, become fulltime students or have given up looking in the construction industry.” Ken Simonson, Chief Economist at Associated General Contractors of America, 2012

If Mr. Simonson is correct, the construction industry must consider the following:

  • How will we attract new skilled labor?
  • What kinds of training and development opportunities can we provide to strengthen the skillset of our current workforce?
  • How will we fill ‘talent gaps’ due to workers leaving the industry or retiring?
  • Do we have enough people? The right people? Skilled people?
  • How will we replace the knowledge that our retiring employees take with them?

These are the kinds of questions today’s leaders are asking as they face a growing shortage of skilled labor. At a global level, employers across all industries are experiencing a scarcity of skilled talent. Specifically in construction, estimates suggest that the workforce has shrunk by more than 25%. What has happened to all of these construction workers?

In 2007 when the recession was at its peak, many workers left their construction jobs in pursuit of other opportunities, decided on an early retirement, or moved to different geographic areas where their skillset was of value. Unfortunately, this has led to a lapse in construction skills and knowledge and a shortage of available and skilled talent in the industry. This growing trend is expected to become even more problematic as a larger workforce will be needed in construction as the economy continues to rebound post-recession. It is further compounded by baby boomers (born between 1945 and 1963) who are retiring without adequate succession plans in place.

Construction companies are struggling to identify and retain the right talent for their organizations. Here are some common reasons why:

  • Reduced interest in construction careers: Currently, there is a high demand and desire for four-year university degrees, which diminishes interest in vocational and technical training. As a result, student enrollment in construction-related courses (when they are available) at the high school and community college level is decreasing. Lack of opportunity to engage and influence the younger generations at these key times has made it increasingly difficult to attract individuals to the construction industry.
  • Fewer training and development opportunities: There also has been a lack of adequate training and development opportunities in construction. Financial concerns have led to a widespread reduction in technical and skill-based training, such as apprenticeship programs. The same situation is occurring with outreach programs aimed at garnering interest from outsiders who might be interested in joining the construction industry. For example, with tighter budgets, companies are offering fewer construction career events for students. The overall shortage of development opportunities makes it more challenging to provide individuals with the skills and knowledge they need to be successful in a long-term construction career.

Although there are a variety of factors influencing the talent shortage in construction, there is hope for a turnaround. In order to grow your talent pool, we recommend an investment in identifying and developing top talent. Here is where you should start:

  • Recruitment: Target students in middle school and high school by getting them excited early on by a career in skilled trades or engineering. Expand applicant searches beyond your local geographic region. Hire workers for skill “potential.”
  • Training and Development: Form strategic alliances with local universities to help teach technical knowledge and skills to incoming workers who may not have the desired skillset. Invest in training, mentoring and apprenticeship programs to ensure your next generation of leadership is fully prepared for the future. Create individual development plans to focus on skill gaps where individuals can improve. Invest in high-potential development to prepare properly for the transition of knowledge and skills in key leadership positions. Expanding available skill development opportunities for job incumbents provides the company with a pipeline of talent to ensure long-term sustainability.

The talent problem in construction is a current reality that doesn’t appear to be vanishing anytime soon. What can you do right now to develop your talent pool before it disappears?

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