Why the Labor Shortage in Construction?

By Sydney Paschall

The most recent AGC workforce survey shows that “88 percent of construction firms are having a hard time finding workers to hire.” But where are the solutions to this uncertainty?
 

So, why are we seeing such a labor shortage? The growing demand to fill job openings in the industry involves many factors. These factors can feel difficult to tackle and overcome. Key influences include a retiring workforce, a rising labor demand, and a lack of skilled workers.
 

Let us look at the big picture over time. During the pandemic, the construction industry lost over one million jobs. That loss set the industry back from the previous eight years of growth. However, the loss was short-lived because construction is vital. After the pandemic, in April 2022, a record-breaking 11.8 million people were employed in the industry. In December 2022, there were 413,000 job openings. In July 2023, there were 378,000. The most recent numbers in November 2023 were at 459,000.
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What are the impacts and challenges?
 

The labor supply and demand gap has had multiple effects on construction firms. Firms report less productivity and longer project schedules. They also can’t bid on projects they normally would.
 

The limited hiring pool creates stress for unions and smaller firms. Rising labor costs force companies to accept lower profits or just say no to jobs. Safety concerns are also at an all-time high. Firms must invest more money into training and safety measures, which can be hard to accomplish.

 

How can the industry fix the labor shortage?
 

The National Center for Construction Education and Research estimates that 41 percent of the construction workforce will retire by 2031. This is a staggering statistic. However, the industry can take the following three actions to face the challenges of labor shortage in the construction industry:

AGC Chief Economist Ken Simonson says the “biggest takeaway from this year’s Workforce Survey is how much the nation is failing to prepare future workers for high-paying careers in fields like construction. It is time to rethink how the nation educates and prepares workers.”

 

How can you build and leverage your workforce?
 

Another big tip to work through the construction industry labor shortage is capitalizing on your network. The key to success and longevity for your business is to use and expand the resources you already have. Set yourself up to reach and exceed your goals.

 

At the end of the day, there is no magic fix to the labor shortage. This issue requires that the industry, associations, and companies of every size come together to face this issue head-on. We must work in harmony with a multi-faceted method that is faced head-on.

 

The free ConstructConnect Labor Guide provides practical tips and tricks for attracting, hiring, and retaining quality construction professionals. It also provides ideas on how to maintain and leverage your current workforce so that you can find, manage, estimate, and win more bids.

Sydney Paschall is a content marketing writer for ConstructConnect. She has more than nine years of experience in copywriting, content planning and creation, editing, strategic digital marketing, social media, and search engine optimization. She is a journalist and storyteller with an unwavering passion for live music, forward-focused initiatives, and social justice.