Why is There a Construction Labor Shortage?
By Brian Binke
A skilled labor crisis has burdened organizations of all sizes in the construction industry for much of the past decade. Construction recruiting is as competitive as it has ever been as experts point to a variety of different causes ranging from retirement and increased building demand to the recession and a lack of vocational programs. Even though many CEOs might have their own reasons why there is labor shortage, it’s important to understand how each of these reasons have played a part in creating it in order to find legitimate solutions.
Prior to the Great Recession that officially took place from December 2007 to June 2009, the commercial construction market was booming. The industry prospered from several years of records for construction spending. Unfortunately, the demand quickly plummeted when the recession hit. In 2010 when the economy had 10 percent unemployment and was still reeling from the recession, the construction industry was actually in a depression with 26 percent unemployment. Much of the talent that was working construction careers were laid off and it took years before it started picking back up. So, many people left the industry out of necessity and chose other professions like truck driving, mechanical engineering and IT. Now, there is an increased shortage for talent because the economy has rebounded and the demand for new projects has increased dramatically and the number of people working in construction has decreased.
Not Attracting Young People
The economic crash left a hole with very little momentum or even a plan in place for attracting young people. Federal budgets were minimal because of the recession forcing many high schools and middle schoolsto discontinue their vocational programs. Construction leadership wasn’t prepared to actively attract young people because there was such a significant population of skilled workers in the past. The average age in construction is older than most industries and boomers are now retiring. Young people are less attracted to the trades forcing companies to get lean and mean. This put into motion the perfect storm.
Increase in Demand
Currently, there’s a major skilled labor shortage. Thanks to record unemployment, it’s very difficult to get more people on board. The manufacturing and construction industries have created the most new jobs, with 327,000 and 308,000 respectively. Even with all of the available opportunities, construction only comprises about 5 percent of the workforce versus manufacturing which makes up 9 percent of workforce. Every industry is experiencing growth. 2018 ushered in a boom in construction spending and it’s even slated to be a record year for construction spending. There’s an exceptional demand for notable projects, but the number of people entering the industry remains insufficient.
Brian Binke is the founder and CEO of The Birmingham Group (TBG). TBG is a globally recognized executive search and consulting firm specializing in the construction arena. Over the past 22 years, Brian has established himself as one of the construction industries most respected leaders. He has won numerous awards for his industry innovation and has been recognized as the No. 1 worldwide revenue producing manager for the largest recruitment network of more than 800 independent firms.