The labor shortage has been building for decades due to a variety of factors, including an aging population, the gig economy, and a lack of training in construction.
The Boomer generation is hitting 65 at a rate of 10,000 people per day and that means about 20 million people have retired and left the workforce since 2011. In 2020 alone there were 3.2 million retirements. Many companies failed to develop plans for their eventual replacement, making it hard to restore the workforce.
The development of the gig economy has also reduced the available workforce. The cobbling together of several jobs or gigs into one income option, such as ride sharing or freelance services, has a larger appeal among Millennials and Gen Z. Many of those that might have worked in construction, manufacturing, or transportation have other options available via the gig economy.
Lack of Construction Training
Another major barrier has been the lack of training for construction jobs. There are 11.5 million available jobs in the economy as a whole but most, if not all require training and education. There are not enough trade schools and community colleges. High schools that offer anything approaching industrial or construction training are in the minority, and this robs the sectors of any kind of worker pipeline. It is easy enough to see why there has been a major shortage of job seekers over the last few years – everything from aging out of the workforce to the availability of alternative means by which to make a living. The question is: what can an employer do about it?
Much of the effort will have to be directed by government-based plans and decisions – more support for training and education, reform of the immigration laws, changing the way that people retire, and so on. However, the individual company can also play an important role.
1. Retention strategies. How does a company hang on to the people they have when the most common tactic in the hiring process is poaching the employee you seek from another company? The assumption is that people can be lured away or kept in place by money. It certainly plays a role, as do benefits, but studies conducted over the years reveal people stay in a job for two other reasons and these are often more important than money.
Do they like and respect their supervisors and do they like and respect the people they work with? The workplace environment is critical. Two factors stand out in leadership – is the boss fair and is the boss someone to be trusted? People want success for their company or they will not progress. People want order and routine – confidence that hard work will be rewarded. The job of leading is complex and requires a great deal of advance preparation.
Check out these retention strategies resources from Harvard Business Review for additional ideas.
2. Recruiting. We have all sat through endless management seminars that seem to lay out a simple cookie cutter approach to managing people. Just do this or that and all will be well. Unfortunately, that isn’t reality. People can’t be managed in a cookie cutter manner. The key to managing is getting the right people. One of the more important considerations is if a recruit fits in with the team and vision.
3. Adaptability is key. The current workforce must change and do so constantly. Training is continuous and people need to be willing to adapt. It is not just understanding a new machine, but new ways to communicate, work, and process information. Companies need to invest in training their employees on new processes and technology as it gets adopted.
The overall challenge of workforce shortages will have to be handled through major education and governmental initiatives. Businesses can’t necessarily wait for these efforts to bear fruit – they need to learn how to function now and deal with their labor issues immediately. There are tactics and strategies that can help companies adapt and even thrive under these conditions.
The construction team at MarksNelson knows the challenges facing the industry inside and out. Whether it’s helping construction firms adopt and implement new technology or helping with financial matters, our team can help your company build a better future.