Without Skilled Labor
YOU’RE OUT OF BUSINESS
The skilled labor shortage plaguing the construction industry has reached crisis proportions. Wall Street Journal – July 2018
A recent Wall Street Journal article by Laura Kusisto reported:
“Construction lost tens of thousands of workers during the economic downturn, and many never returned. Workers retired, retrained for careers in energy and other sectors, or were immigrants who returned to their home countries. The industry has failed to replenish its ranks with newcomers even as construction has boomed…
“The share of workers in construction who are 24 years old or younger has declined in 48 states since the last housing boom in 2005, according to an analysis of U.S. Census data by Issi Romem, chief economist at construction data firm BuildZoom. Nationally, the share of young construction workers declined nearly 30% from 2005 through 2016…
“The U.S. had 11.7 million construction workers in 2005, but that peak fell to 10.8 million in 2010 amid the housing crisis. Even as the economy and housing market recovered, the number of workers continued to fall, hitting 10.2 million in 2016. Declining numbers of immigrant construction workers have made the problem worse…
‘We were asleep at the wheel in making sure the supply [of workers] was coming,’ said Mark Holland, chief operating officer at Houston-based Marek Brothers Companies. ‘As a result, we’ve got quality problems. We’ve got safety problems. We’ve got cost problems. There’s no place that it doesn’t have a collateral impact’.”
- For many years construction has been described as an industry of brawn and determination. This is a reputation that stems from building custom products with rudimentary equipment and limited technical support by an industry that resisted change. Construction was slow to embrace technology and staked its reputation on a can-do attitude.
- Starting from that mind-set, our industry also over-estimated on-the-job training and years of service. We over-value some people with 25 years of experience who actually have five years of experience and 20 years of repetition. An organization of people who do not regularly renew their skills and learn new things is destined to replicate itself indefinitely, miss opportunities for improvement, and fall behind the efficiency and productivity of more enlightened competitors.
- Research indicates that industrial skills (including management skills) have a half-life of five years which means that half the skills workers use to do their job will be obsolete in five years. Virtually all skills will need to be replaced within ten years.
We are now facing a labor shortage compounded by an inadequate commitment to training.
The Wall Street Journal article continues, “Builders often don’t want to waste time and money on workers who aren’t already trained, said John Courson, president and chief executive of the Home Builders Institute, which trains at-risk youth, ex-offenders, high-school students and military personnel transitioning into the civilian workforce in the construction trade.”
It also appears that many of the contractors who describe training as too expensive have made that judgment on anticipation of costs never experienced; not on training undertaken. The question, “How much will it cost?” is always top-of-mind. The answer is: “As much as an organization can afford”. There is a huge void between the supply of skilled labor and the availability of continuing education programs needed to maintain high levels of competence in construction. The first companies that develop such programs will shift the competitive balance in their favor and pick up a lead that will be hard for others to overcome.
Attitude Adjustment 2
My recent research reveals:
- As construction moves closer to becoming a commodity, efficiency and productivity are becoming a critical component of profitability.
- Larger companies are embracing training and education as a normal cost of doing business.
- Continuing Education and training are a necessary cost of succeeding in the construction business.
- Research clearly indicates that training provides a superb return on investment.
- There is evidence that suggests that even modest education and training efforts provide huge returns in the form of performance enhancement, employee motivation, and improvements in productivity.
- In my experience indicates education or training expenses applied to almost any area of a construction operation or organization are recovered rapidly and in many cases two and three times over.
Well-informed designers, owners, users, and inspectors provide an increasing challenge to construction professionals who have little choice other than to keep up, improve their skills, or fall behind. On-the-job training is not enough. Improvement and replacement of skill sets requires serious study, continuous education, and a commitment to lifelong learning. This commitment alone will begin to solve the skilled labor shortage that threatens our industry’s recovery and long-term prosperity.