Across the country, labor shortages exist practically within every industry. And for the construction industry, it’s nothing new.
In the early 2000s, the industry’s hiring problems were temporarily cured during the foreclosure crisis and the Great Recession when the housing market collapsed. Since then, the construction industry hasn’t quite recovered from the droves of workers switching to sectors like retail and warehousing. That result, paired with jobs lost due to aging workers, has left the industry with 2.22 million jobs to fill by 2024.
Despite this, the construction worker shortage has room for massive growth and potential.
The Construction Labor Shortage Forecast
The shortage’s current state depends on several factors, one of them being the Infrastructure Investment and Jobs Act passed in November 2021. This bill authorized $1.2 trillion in total spending, including $550 billion of new spending on infrastructure.
Although the construction industry faces labor and material shortages, the demand for new construction remains higher than ever before. There’s a low supply of homes and a growing housing market following the pandemic. While today’s interest rates are cooling the market slightly, the demand remains high.
Baby boomers’ early retirement resulted in an estimated 3.2 million leaving the workforce in 2020, leading to a massive loss of skilled talent without an adequate replacement. Only one worker is entering for every five workers retiring from the construction industry.
How to Overcome the Hiring Shortage
To attract more talent, hiring entities should begin to focus on encouraging and offering opportunities for development and growth. In these efforts, there are countless DE&I initiatives to attract diverse talent outside of the traditional profile of the typical construction hire.
Companies should consider applicants who have taken alternative educational paths, like technical degrees, hands-on experience and veteran-transition programs. Also, partnerships with educational institutions could boost awareness of the possibilities of a career in the construction industry.
Ideally, employers could also increase the productivity of their current employees through training, digital technologies and automations.
Compensation is another point to overcome the current hiring shortage, and it has become increasingly challenging to remain competitive against other industries. In 2021, wages grew by 7.9 percent, while transportation and warehousing wages grew by 12.6 percent. Nonwage components such as an employee feeling valued by their employer, access to supportive management, and flexibility at work can reduce quit rates. Employee retention should be as crucial as attracting top talent.
We understand navigating the construction labor shortage is difficult. Let Honour Consulting do the hard work for you. With our extensive network and 35-plus years of recruiting, we’re experts in finding top construction talent. Tell us today how we can help you.