In recent years, the U.S. construction sector has been caught in a perfect storm: a dwindling pool of skilled laborers just as demand for their expertise skyrockets. According to data from the Associated Builders and Contractors (ABC), the industry is grappling with a deficit of 501,000 workers to satisfy existing demand.
What's Driving This Workforce Crunch?
We know there are a few obvious reasons this labor deficit is occurring. From a wave of retirements to a cultural preference for college degrees over trades, the construction workforce is facing a major challenge in the years ahead.
Seasoned pros are hanging up their hard hats at an alarming rate in what’s known as the “great retirement wave.” More than 20% of construction workers are aged 55 or older, and as they hang up their hard hats, their expertise goes with them. There are decades of experience walking out the door, leaving a knowledge gap that’s tough to fill.
Second, the surge in massive infrastructure projects is straining an already thin workforce. Spending on these projects is projected to skyrocket by nearly 600% over the next decade, from $50 billion to just over $350 billion, according to FMI Corporation. The pressure on skilled workers will only intensify as these projects begin.
And contributing to the limited pool of skilled tradespeople lies the “college or bust” mentality that has lingered around higher education and career choices for new graduates. Our culture has long dissuaded young individuals from pursuing careers in skilled trades. For decades, parents, teachers and high school guidance counsellors have framed the trades as tough, manual labor that is unfulfilling and low paid, discouraging young people from pursuing these careers and instead entering traditional four-year college programs to avoid the trades altogether.
The Silver Lining: Opportunity for Change
The good news? This labor crisis presents a unique opportunity for companies in the architecture, engineering and construction (AEC) industry to innovate and diversify. The shortages are pushing businesses to rethink their recruitment strategies, and those willing to adapt will continue to thrive and scale.
Tapping Into New Talent Pools
One way to alleviate the labor crunch is to broaden the talent pool and tap into underrepresented groups. For instance, opening the doors for neurodiverse talent often brings unique perspectives and problem-solving skills. Those with neurodiverse minds are able to see the bigger picture and be more effective decision-makers.
Another underrepresented group in construction is women. Studies show that women excel in communication and analytical thinking — two skills critical for efficiency and safety on the site. I met with a woman who had studied fine arts in college but realized she enjoyed the processes and organizational aspects of contracting, such as coordinating the many moving parts and stakeholders on a project. She’s been in the industry for two decades and is an important asset to her teams.
In addition to a diverse talent pool, the industry has a huge opportunity to increase second-chance hiring. For those who have been previously incarcerated, finding work is a challenge. The construction industry provides an opportunity for previously incarcerated groups to reinvent themselves and find stable employment in a culture that tends to discredit their past. Weld Seattle, created an innovative model that wraps construction trade job training around formerly incarcerated individuals. The Seattle nonprofit building up a skilled workforce and providing new opportunities at the same time. College does not need to be the only path, and second-chance hiring is just one example of the alternative routes to success.
Utilize Proactive Recruitment Strategies
While technology can certainly help cover the labor gap, human talent remains irreplaceable. Companies need to embrace proactive recruitment strategies to attract and retain workers.
- Hire first, ask questions later — If you find a talented individual, don't let them slip through your fingers. Even if you don't have an immediate opening, their skills could be a game-changer down the line.
- Marketing — Don't be shy about showcasing what makes your company a great place to work. Put effort and some dollars into marketing your open positions via advertisements and/or paid social media posts. Be sure to communicate the benefits of working with your company.
- Create apprenticeship programs — Companies who run their own programs to help steer more people into the trades find the benefits returned to them with loyalty and passion from employees. For example, in 2018, home improvement retailer Lowe’s launched Track to the Trades, a pre-apprenticeship program to help its employees get into a skilled trade.
- Broaden your benefits — McCarthy Building Companies, a general contractor with 6,500 employees across the country, has been extending new benefits to tradespeople to entice them to join the construction force, from paid leave for funerals and military duty to 401(k) plans, health insurance, mental health support, learning and development opportunities, and a brief 30-day waiting period for benefits.
- Prioritize culture fit — Technical skills are important, but don't underestimate the value of finding people who align with your company's values and culture. A positive, supportive work environment can be a powerful magnet for talent.
A Turning Point for the Industry
With soaring student debt and diminishing returns on four-year degrees, young people are hungry for alternatives. The construction industry can seize this moment to offer them a lucrative, fulfilling career path. By embracing diversity, investing in training, and offering competitive benefits, you can not only weather this labor storm but emerge stronger than ever.
Remember, this is not just a challenge: It's a chance to redefine the future of your company and the industry as a whole. With the right strategies — diversifying the talent pool, creating pathways for nontraditional hires and being proactive with hiring and retention — construction companies can turn the current labor shortage into a competitive advantage.
