Labor shortages and an aging work force, on top of project delays due to an increasing time lag in the supply chain, will continue to affect construction projects, making for extended challenges for the year ahead. According to the Bureau of Labor Statistics, the average age of a construction worker is 42.5 years old. It is not out of the ordinary to have shifts in the workforce age demographic as older employees depart and younger ones enter the workforce, however, younger workers are not entering construction nearly at the same rate retiring ones are departing.
During March and April of 2020, the beginning of the pandemic, 1.1 million construction workers lost their jobs, according to the Bureau of Labor Statistics. The industry gained most of those jobs back but still lost nearly 90,000 jobs overall, which is cause for concern ahead of the infrastructure bill funding rollout and, with it, the potential for serious delays and cost overruns. The costs, of course, are then passed on to the consumer.
Increasing wages were also up 4.61% in 2021 for supervising construction workers and 5.26% for field construction workers. It’s simple supply and demand pushing wages higher and it’s a perfect storm brewing – workers aging out and still not enough coming in. This tells us, quite alarmingly in some respects, that more needs to be done on recruitment efforts to make up for the gap, but retainment is also a significant effort to keep top of mind.
Safety on the job site is also of paramount importance but particularly for older workers, and it needs to be considered when seeing the forest through the trees on employee retention. The Bureau of Labor Statistics states that individuals between 45-54 years of age are the second most likely group to be injured on the job – the vast majority of incidences being equipment accidents as well as slips and falls. Additionally, the average retirement age of a construction worker is 61, and studies have shown that productivity declines beginning 10 years prior. This means workers need to be retirement ready well before they are reaching their fifth decade. Employers need to continually assess their workforce and regularly examine their full benefits package, asking themselves if they are setting their employees up for long-term success well beyond their years on the job which, in turn, helps creates loyalty and reducing some of the staffing capacity pressure.
The construction industry must continue to aggressively market to the younger generation and show the benefits of a construction career or the effects of a shrinking workforce will have a ripple effect on the price of projects and the length of time to project completion. If left unattended, there may very well be projects never built because of labor shortages and no company wants to end up in that scenario.
So, what can employers proactively do to navigate these complexities? Reassuring resources such as the industry-specific associations Associated General Contractors of America and Associated Builders and Contractors are a great place to seek guidance. These organizations provide vital services including apprenticeship training to encourage younger workers along their professional development journey, safety programs to enlighten and encourage workers of all ages, and insurance and benefit programs to make everyone happy in both the short and long run.
It will be the construction companies that position their marketing efforts towards younger audiences, actively recruiting within high schools and community colleges with trade programs, that will successfully attract younger workers. More of that needs to be done on a larger scale. Shifting the paradigm for the younger generation to understand the benefits of a construction career is vital for the industry’s succession planning and, therefore, sustainability.
How We Can Help
Direct Advisors, LLC, established in 2001 and located in the Albany, New York area, provides bona fide benefit plan consulting and third-party administrative services to merit shop (non-union) construction companies that are subject to the Davis-Bacon Act and state prevailing wage regulations. Our clients are located throughout the United States.
Author: Tom Santa Barbara