News
December 3, 2024

Rebuilding America's Workforce: Solving the Construction Industry's Talent Crisis

Caroline Raffetto
CMAA
CMAA

In a comprehensive report published by the Construction Management Association of America (CMAA), the construction industry's most pressing challenge comes into sharp focus. In the wake of the Bipartisan Infrastructure Law's historic $550 billion investment, the industry stands at a critical crossroads. 

With unprecedented federal spending poised to transform America's infrastructure, one fundamental challenge threatens to derail this ambitious vision: a severe and persistent labor shortage testing the resilience of architecture, engineering, and construction (AEC) businesses nationwide.

Key Takeaways

  • Infrastructure Opportunity: The Bipartisan Infrastructure Law presents a $550 billion investment opportunity, with a 42% positive outlook for highway, bridge, and transportation projects.
  • Talent is the Primary Challenge: Labor shortage is the most significant hurdle for contractors, requiring innovative workforce strategies.
  • Workforce Flexibility is Crucial: Companies must offer flexible work arrangements and develop compelling employee value propositions to attract top talent.
  • Diversity and Inclusion Matter: DEI efforts are now a strategic business advantage, particularly in winning infrastructure contracts.
  • Mental Health is a Critical Focus: The construction industry must address significant mental health challenges, with suicide rates 3.5 times the national average.
  • Strategic Approach Needed: Successful companies will implement comprehensive strategies, including scenario planning, mentorship programs, and holistic employee support.

The numbers tell a compelling story of both opportunity and challenge. The 2023 Construction Hiring and Business Outlook reveals remarkable optimism, with 42% positive readings for highway, bridge, and transportation projects. The American Road and Transportation Builders Association (ARTBA) reported a 25% increase in state and local contract awards in 2022, signaling a sector on the brink of significant growth. Yet, beneath these promising statistics lies a critical question that keeps industry leaders awake at night: Do we have the right talent to transform these opportunities into reality?

Ken Simonson, chief economist at the Associated General Contractors of America (AGC), cuts to the heart of the matter. The labor shortage isn't just a minor hurdle—it's the most substantial challenge facing contractors today. This isn't merely about filling positions; it's about reimagining workforce strategies in a rapidly evolving landscape.

For construction owners, the labor shortage represents a multifaceted challenge that goes beyond mere staffing. Projects that once seemed straightforward now require intricate planning and unprecedented flexibility. With skilled workers in short supply, owners are facing extended project timelines, increased costs, and heightened risks of project delays.

The traditional procurement models are being reimagined as owners seek to create more attractive environments that not only complete projects but also support the workforce that makes those projects possible. They're increasingly recognizing that their role extends beyond project management – they must now be active partners in workforce development, creating ecosystems that attract, retain, and nurture talent.

This means investing in training programs, supporting diversity initiatives, and developing compensation and benefit structures that make construction careers more appealing to a new generation of workers.

A Multifaceted Approach to Talent Acquisition

The solution demands a comprehensive approach that goes far beyond traditional recruitment methods. Scenario planning has emerged as a critical first step. The pandemic taught the industry a crucial lesson: adaptability is not optional. Companies must develop nuanced strategies that allow for rapid scaling up or down, creating contingency plans that can weather external disruptions.

Workforce flexibility has become the new currency of talent attraction. Today's job candidates wield unprecedented market power, demanding more control over where, when, and how they work. Successful companies are responding by crafting compelling employee value propositions (EVP) that distinguish them in a competitive marketplace.

Mentorship and training programs are proving to be powerful tools in developing a sustainable talent pipeline.

Initiatives like AGC's Construction Careers Center Charter High School and Helmets to Hardhats are breaking down barriers and introducing new talent pools to construction careers. "Upskilling" programs are expanding candidate pools by providing training and certification to individuals who might not initially meet traditional qualification standards.

Diversity: A Competitive Advantage

The infrastructure law has placed a spotlight on diversity, equity, and inclusion (DEI) as more than just a moral imperative—it's now a strategic business advantage. Disadvantaged business enterprise (DBE) contractors and diverse workforces are no longer optional; they're essential. Companies that embrace inclusive recruiting strategies, particularly those targeting women and people of color, are positioning themselves to win critical contracts.

The National Association of Women in Construction exemplifies this approach by creating awareness and providing support that can transform the industry's demographic landscape. Thoughtful employee benefits, particularly those addressing the unique needs of underrepresented groups, can be the decisive factor in attracting and retaining top talent.

Beyond Compensation: Holistic Well-being

Perhaps the most striking revelation in addressing labor shortages is the industry's growing recognition of mental health challenges. The statistics are stark and sobering: construction workers experience 45.3 suicides per 100,000 workers—3.5 times the national average. This translates to an estimated 5,500 suicides annually, a tragedy that demands immediate and comprehensive intervention.

Progressive companies are moving beyond traditional healthcare models, implementing robust employee assistance programs that offer accessible mental health support. Telemedicine, individual and group counseling, and targeted substance use disorder programs are becoming integral components of competitive compensation packages.

The Road Ahead

As the construction industry stands on the cusp of a potentially transformative era, success will be defined by those who view workforce development as a holistic, strategic endeavor. It's about creating environments that attract talent and nurture, support, and retain it.

The Bipartisan Infrastructure Law represents more than just a financial investment—it's an invitation to reimagine how we build not just infrastructure but careers. By embracing flexibility, championing diversity, prioritizing well-being, and developing innovative talent strategies, the construction industry can construct a future as robust and resilient as the structures it creates.

5 Ways of Addressing the Labor Shortage to Recruit and Retain Staff

The Bipartisan Infrastructure Law provides an opportunity to change the landscape of America. Federal spending to build and repair U.S. infrastructure is expected to increase by over $550 billion. Government contractors, especially those specializing in heavy civil construction, could receive substantial amounts of economic stimulus if they effectively prepare and have the right talent at the ready. I regularly hear from architecture, engineering, and construction (AEC) businesses about how the labor shortage is making staffing projects incredibly challenging. 

According to the 2023 Construction Hiring and Business Outlook from the Associated General Contractors of America (AGC) and Sage, respondents are most optimistic about infrastructure categories. The study showed "positive readings of 42% for both highway and bridge construction and transportation projects such as transit, rail, and airports." 

As reported by the American Road and Transportation Builders Association (ARTBA), the value of state and local contract awards increased 25% in 2022; I can only hope 2023 will continue to see this type of growth. But that brings us to the pressing question on everyone's mind: Does our firm have the right staff to bid on and perform the work?

The labor shortage is by far the largest challenge for most contractors, according to Ken Simonson, ACG's chief economist. With that in mind, how can you adapt your workforce strategy today? Here are five practical steps.

1. Step Up Scenario Planning 

The pandemic underscored the need for a deliberate, focused, and thoughtful scenario planning process. Scenario planning requires development of short- and long-term strategies to ramp up (and sometimes ramp down) the size of a team, projects, or full staffing model, depending on the expected workflow. Develop contingency plans to adapt to external threats, such as requests for accommodations.

2. Enhance Workforce Utilization 

Job candidates currently have substantial labor-market power. They are demanding greater flexibility in where, when, and how they work. While the level of flexibility depends on the particular job, responding to these new expectations requires thinking differently about staffing, as well as having a well defined employee value proposition (EVP). Your EVP explains to job candidates why working for you is more attractive than working for your competitors. Promote your EVP as you promote open positions to attract the best talent.

Mentoring programs are an effective method for creating a talent pipeline. When I was involved in AGC's Construction Careers Center Charter High School in St. Louis, Missouri, I saw firsthand how mentors inspire students to choose constructionrelated careers. Your firm can also get involved with similar nonprofit organizations, such as Helmets to Hardhats, to create a talent pipeline from veterans. To expand candidate pools, develop "upskilling" programs that provide training and certification to candidates who may not have the full range of skills needed to qualify for existing positions. 

3. Increase DEI Efforts 

Disadvantaged business enterprise (DBE) contractors and diverse workforces are critical to the construction industry based on the guidelines of the infrastructure law. Diversity, equity, and inclusion (DEI) efforts often make the difference between being the apparent low bidder that loses the work and being the creative, inclusive contractor that wins the work. Recruiting efforts should include programs that attract women and people of color

Offering thoughtful employee benefits can be a competitive advantage in attracting women to the industry. Improved benefits can directly impact job performance, well-being, and overall happiness. In 2023, a year where companies will need to compete on a budget, this may be the best dollar-fordollar investment construction companies can make in their workforce. The National Association of Women in Construction is an example of one organization creating awareness about meaningful careers and offering support for women in construction. 

Keep in mind that both the Federal Highway Administration and Federal Transit Administration programs will give contracting agencies expanded flexibility to use hiring preferences to enhance workforce development opportunities for those in economically or socially disadvantaged communities. 

4. Design Compensation for Your People 

There is no substitute for programs personalized for your company to optimize your workforce. Compensation is a pressing issue. If one firm is offering $15 per hour and another is offering $12 per hour, that makes a significant difference to job candidates. AEC companies have turned to consulting firms to address their compensation challenges, such as: 

  • Developing a total rewards strategy and compensation philosophy
  • Conducting a labor market assessment of total direct compensation
  • Creating salary ranges to assist with pay management, career-pathing, and emerging regulatory requirements
  • Designing an enhanced long-term incentive plan for executives
  • Pay equity analysis

5. Be Strategic About Medical and Mental Health 

Benefits To help attract and retain key talent, and keep that talent healthy and productive, instituting thoughtful medical and mental health benefit programs is essential. According to the Centers for Disease Control and Prevention, more construction workers die by suicide each year than by all other construction related fatalities, as reported by ARTBA. 

Unfortunately, construction industry suicide statistics are jarring: 

  • 45.3 suicides per 100,000 workers
  • Estimated more than 5,500 suicides each year
  • Construction worker suicide is 3.5 times the national average

The industry has begun to recognize the need for additional mental health and substance use disorder support. Some AEC firms have added employee assistance programs to their coverage when traditional mental health care has been proven to not provide enough support. Plus, people on a jobsite cannot always easily get to a medical facility nearby, so there is an uptick in AEC companies offering group and individual counseling sessions available via phone. Preventing opioid overdose and suicide among construction workers, as well as supporting workers' recovery and reintegration into the workforce, is key to helping employees succeed. Since there are quite a few programs in the marketplace, it can be a challenge to evaluate which ones are right for your staff, so consider hiring a consultancy to assist with this process. 

Taking the time to shape the right health plan for your specific workforce will go a long way toward supporting your talent and managing expenses. Make an informed decision when choosing vendors, such as a pharmacy benefit management provider. Comparing and contrasting telemedicine and digital therapeutics point solutions can be challenging, because the health insurance marketplace is flooded with choices. Employers who ignore these complexities and continue with legacy health plan design and delivery approaches will miss significant opportunity gains.

One last thought: Be sure to have attorneys on your team or staffed within your consulting firm who can advise you on how to effectively comply with local, state, and national employment laws. As you set up your current and future workforce for increased success, keep in mind that even though many construction businesses are feeling pressure when it comes to recruiting and retaining staff, there are solutions available as we head into this exciting new era

News
December 3, 2024

Rebuilding America's Workforce: Solving the Construction Industry's Talent Crisis

Caroline Raffetto
Labor
United States

In a comprehensive report published by the Construction Management Association of America (CMAA), the construction industry's most pressing challenge comes into sharp focus. In the wake of the Bipartisan Infrastructure Law's historic $550 billion investment, the industry stands at a critical crossroads. 

With unprecedented federal spending poised to transform America's infrastructure, one fundamental challenge threatens to derail this ambitious vision: a severe and persistent labor shortage testing the resilience of architecture, engineering, and construction (AEC) businesses nationwide.

Key Takeaways

  • Infrastructure Opportunity: The Bipartisan Infrastructure Law presents a $550 billion investment opportunity, with a 42% positive outlook for highway, bridge, and transportation projects.
  • Talent is the Primary Challenge: Labor shortage is the most significant hurdle for contractors, requiring innovative workforce strategies.
  • Workforce Flexibility is Crucial: Companies must offer flexible work arrangements and develop compelling employee value propositions to attract top talent.
  • Diversity and Inclusion Matter: DEI efforts are now a strategic business advantage, particularly in winning infrastructure contracts.
  • Mental Health is a Critical Focus: The construction industry must address significant mental health challenges, with suicide rates 3.5 times the national average.
  • Strategic Approach Needed: Successful companies will implement comprehensive strategies, including scenario planning, mentorship programs, and holistic employee support.

The numbers tell a compelling story of both opportunity and challenge. The 2023 Construction Hiring and Business Outlook reveals remarkable optimism, with 42% positive readings for highway, bridge, and transportation projects. The American Road and Transportation Builders Association (ARTBA) reported a 25% increase in state and local contract awards in 2022, signaling a sector on the brink of significant growth. Yet, beneath these promising statistics lies a critical question that keeps industry leaders awake at night: Do we have the right talent to transform these opportunities into reality?

Ken Simonson, chief economist at the Associated General Contractors of America (AGC), cuts to the heart of the matter. The labor shortage isn't just a minor hurdle—it's the most substantial challenge facing contractors today. This isn't merely about filling positions; it's about reimagining workforce strategies in a rapidly evolving landscape.

For construction owners, the labor shortage represents a multifaceted challenge that goes beyond mere staffing. Projects that once seemed straightforward now require intricate planning and unprecedented flexibility. With skilled workers in short supply, owners are facing extended project timelines, increased costs, and heightened risks of project delays.

The traditional procurement models are being reimagined as owners seek to create more attractive environments that not only complete projects but also support the workforce that makes those projects possible. They're increasingly recognizing that their role extends beyond project management – they must now be active partners in workforce development, creating ecosystems that attract, retain, and nurture talent.

This means investing in training programs, supporting diversity initiatives, and developing compensation and benefit structures that make construction careers more appealing to a new generation of workers.

A Multifaceted Approach to Talent Acquisition

The solution demands a comprehensive approach that goes far beyond traditional recruitment methods. Scenario planning has emerged as a critical first step. The pandemic taught the industry a crucial lesson: adaptability is not optional. Companies must develop nuanced strategies that allow for rapid scaling up or down, creating contingency plans that can weather external disruptions.

Workforce flexibility has become the new currency of talent attraction. Today's job candidates wield unprecedented market power, demanding more control over where, when, and how they work. Successful companies are responding by crafting compelling employee value propositions (EVP) that distinguish them in a competitive marketplace.

Mentorship and training programs are proving to be powerful tools in developing a sustainable talent pipeline.

Initiatives like AGC's Construction Careers Center Charter High School and Helmets to Hardhats are breaking down barriers and introducing new talent pools to construction careers. "Upskilling" programs are expanding candidate pools by providing training and certification to individuals who might not initially meet traditional qualification standards.

Diversity: A Competitive Advantage

The infrastructure law has placed a spotlight on diversity, equity, and inclusion (DEI) as more than just a moral imperative—it's now a strategic business advantage. Disadvantaged business enterprise (DBE) contractors and diverse workforces are no longer optional; they're essential. Companies that embrace inclusive recruiting strategies, particularly those targeting women and people of color, are positioning themselves to win critical contracts.

The National Association of Women in Construction exemplifies this approach by creating awareness and providing support that can transform the industry's demographic landscape. Thoughtful employee benefits, particularly those addressing the unique needs of underrepresented groups, can be the decisive factor in attracting and retaining top talent.

Beyond Compensation: Holistic Well-being

Perhaps the most striking revelation in addressing labor shortages is the industry's growing recognition of mental health challenges. The statistics are stark and sobering: construction workers experience 45.3 suicides per 100,000 workers—3.5 times the national average. This translates to an estimated 5,500 suicides annually, a tragedy that demands immediate and comprehensive intervention.

Progressive companies are moving beyond traditional healthcare models, implementing robust employee assistance programs that offer accessible mental health support. Telemedicine, individual and group counseling, and targeted substance use disorder programs are becoming integral components of competitive compensation packages.

The Road Ahead

As the construction industry stands on the cusp of a potentially transformative era, success will be defined by those who view workforce development as a holistic, strategic endeavor. It's about creating environments that attract talent and nurture, support, and retain it.

The Bipartisan Infrastructure Law represents more than just a financial investment—it's an invitation to reimagine how we build not just infrastructure but careers. By embracing flexibility, championing diversity, prioritizing well-being, and developing innovative talent strategies, the construction industry can construct a future as robust and resilient as the structures it creates.

5 Ways of Addressing the Labor Shortage to Recruit and Retain Staff

The Bipartisan Infrastructure Law provides an opportunity to change the landscape of America. Federal spending to build and repair U.S. infrastructure is expected to increase by over $550 billion. Government contractors, especially those specializing in heavy civil construction, could receive substantial amounts of economic stimulus if they effectively prepare and have the right talent at the ready. I regularly hear from architecture, engineering, and construction (AEC) businesses about how the labor shortage is making staffing projects incredibly challenging. 

According to the 2023 Construction Hiring and Business Outlook from the Associated General Contractors of America (AGC) and Sage, respondents are most optimistic about infrastructure categories. The study showed "positive readings of 42% for both highway and bridge construction and transportation projects such as transit, rail, and airports." 

As reported by the American Road and Transportation Builders Association (ARTBA), the value of state and local contract awards increased 25% in 2022; I can only hope 2023 will continue to see this type of growth. But that brings us to the pressing question on everyone's mind: Does our firm have the right staff to bid on and perform the work?

The labor shortage is by far the largest challenge for most contractors, according to Ken Simonson, ACG's chief economist. With that in mind, how can you adapt your workforce strategy today? Here are five practical steps.

1. Step Up Scenario Planning 

The pandemic underscored the need for a deliberate, focused, and thoughtful scenario planning process. Scenario planning requires development of short- and long-term strategies to ramp up (and sometimes ramp down) the size of a team, projects, or full staffing model, depending on the expected workflow. Develop contingency plans to adapt to external threats, such as requests for accommodations.

2. Enhance Workforce Utilization 

Job candidates currently have substantial labor-market power. They are demanding greater flexibility in where, when, and how they work. While the level of flexibility depends on the particular job, responding to these new expectations requires thinking differently about staffing, as well as having a well defined employee value proposition (EVP). Your EVP explains to job candidates why working for you is more attractive than working for your competitors. Promote your EVP as you promote open positions to attract the best talent.

Mentoring programs are an effective method for creating a talent pipeline. When I was involved in AGC's Construction Careers Center Charter High School in St. Louis, Missouri, I saw firsthand how mentors inspire students to choose constructionrelated careers. Your firm can also get involved with similar nonprofit organizations, such as Helmets to Hardhats, to create a talent pipeline from veterans. To expand candidate pools, develop "upskilling" programs that provide training and certification to candidates who may not have the full range of skills needed to qualify for existing positions. 

3. Increase DEI Efforts 

Disadvantaged business enterprise (DBE) contractors and diverse workforces are critical to the construction industry based on the guidelines of the infrastructure law. Diversity, equity, and inclusion (DEI) efforts often make the difference between being the apparent low bidder that loses the work and being the creative, inclusive contractor that wins the work. Recruiting efforts should include programs that attract women and people of color

Offering thoughtful employee benefits can be a competitive advantage in attracting women to the industry. Improved benefits can directly impact job performance, well-being, and overall happiness. In 2023, a year where companies will need to compete on a budget, this may be the best dollar-fordollar investment construction companies can make in their workforce. The National Association of Women in Construction is an example of one organization creating awareness about meaningful careers and offering support for women in construction. 

Keep in mind that both the Federal Highway Administration and Federal Transit Administration programs will give contracting agencies expanded flexibility to use hiring preferences to enhance workforce development opportunities for those in economically or socially disadvantaged communities. 

4. Design Compensation for Your People 

There is no substitute for programs personalized for your company to optimize your workforce. Compensation is a pressing issue. If one firm is offering $15 per hour and another is offering $12 per hour, that makes a significant difference to job candidates. AEC companies have turned to consulting firms to address their compensation challenges, such as: 

  • Developing a total rewards strategy and compensation philosophy
  • Conducting a labor market assessment of total direct compensation
  • Creating salary ranges to assist with pay management, career-pathing, and emerging regulatory requirements
  • Designing an enhanced long-term incentive plan for executives
  • Pay equity analysis

5. Be Strategic About Medical and Mental Health 

Benefits To help attract and retain key talent, and keep that talent healthy and productive, instituting thoughtful medical and mental health benefit programs is essential. According to the Centers for Disease Control and Prevention, more construction workers die by suicide each year than by all other construction related fatalities, as reported by ARTBA. 

Unfortunately, construction industry suicide statistics are jarring: 

  • 45.3 suicides per 100,000 workers
  • Estimated more than 5,500 suicides each year
  • Construction worker suicide is 3.5 times the national average

The industry has begun to recognize the need for additional mental health and substance use disorder support. Some AEC firms have added employee assistance programs to their coverage when traditional mental health care has been proven to not provide enough support. Plus, people on a jobsite cannot always easily get to a medical facility nearby, so there is an uptick in AEC companies offering group and individual counseling sessions available via phone. Preventing opioid overdose and suicide among construction workers, as well as supporting workers' recovery and reintegration into the workforce, is key to helping employees succeed. Since there are quite a few programs in the marketplace, it can be a challenge to evaluate which ones are right for your staff, so consider hiring a consultancy to assist with this process. 

Taking the time to shape the right health plan for your specific workforce will go a long way toward supporting your talent and managing expenses. Make an informed decision when choosing vendors, such as a pharmacy benefit management provider. Comparing and contrasting telemedicine and digital therapeutics point solutions can be challenging, because the health insurance marketplace is flooded with choices. Employers who ignore these complexities and continue with legacy health plan design and delivery approaches will miss significant opportunity gains.

One last thought: Be sure to have attorneys on your team or staffed within your consulting firm who can advise you on how to effectively comply with local, state, and national employment laws. As you set up your current and future workforce for increased success, keep in mind that even though many construction businesses are feeling pressure when it comes to recruiting and retaining staff, there are solutions available as we head into this exciting new era