A continuing shortage of workers in construction is threatening the success of new federal investments in infrastructure, according to the Associated General Contractors of America (AGC).
A new workforce survey conducted by AGC and Autodesk indicates that 93 percent of construction firms have open positions they are trying to fill. Among those firms, 91 percent are having trouble filling at least some of those positions, particularly among the craft workforce that performs the bulk of onsite construction work.
“Construction workforce shortages are severe and having a significant impact on construction firms of all types, all sizes, and all labor arrangements,” said Ken Simonson, AGC chief economist, in a prepared statement. “These workforce shortages are compounding the challenges firms are having with supply chain disruptions that are inflating the cost of construction materials and making delivery schedules and product availability uncertain.”
All types of firms are experiencing similar challenges, according to AGC. Nearly identical results were reported by contractors that use exclusively union craft labor and by firms that operate as open-shop employers; by firms with $50 million or less in annual revenue and ones with more than $500 million in revenue; by companies in all four regions of the country; and by contractors doing building construction, highway and transportation projects, federal and heavy work, or utility infrastructure.
Simonson said a main reason for the severity of the shortages is that most job candidates are not qualified to work in the industry. The most common explanation for difficulty in hiring, cited by 77 percent of firms, is that available candidates lack the skills needed to work in construction or cannot pass a drug test.
Labor shortages are exacerbating the impacts of the widespread supply chain disruptions that have made it difficult for firms to get materials delivered on time and that are driving up the cost of those materials. Eight in 10 (82 percent) of firms report projects they work on have been delayed because of supply chain challenges and two-thirds (66 percent) have projects that have been delayed because of labor shortages.
Supply chain problems and labor shortages are making construction more expensive. Nearly nine in 10 (86 percent) of firms have raised base pay rates for their workers, and 70 percent have passed along rising materials costs to project owners during the past year.
Cost and supply chain challenges have prompted some owners to cancel or delay projects. More than half (58 percent) of respondents report owners canceled, postponed, or scaled back projects due to increasing costs; one-third of firms report projects were impacted due to lengthening or uncertain completion times.
In addition to raised pay rates, 45 percent of respondents are providing incentives and bonuses, and a quarter of firms (24 percent) have also improved their benefits packages.
Half (51 percent) of respondents are engaged with career building programs such as high school, collegiate, or technical school construction programs—up from 37 percent last year. Respondents also reported an increased investment in training programs. About half (47 percent) of firms are increasing spending on training and professional development programs, 25 percent are enhancing their on-line and video training capabilities, and 16 percent are using augmented and virtual reality technology to better train workers.
“While the majority of construction firms today are struggling to find skilled workers to fill open jobs, the labor shortage is only going to intensify as more workers retire,” said Allison Scott, director, customer experience and industry advocacy at Autodesk, in a. statement. “What’s inspiring is that construction firms recognize this and are taking a proactive approach to preparing future workers for careers in construction. The renewed investments in career development and training programs, as well as a focus on digital skills demonstrates that the industry is committed to taking action to build the next generation of the workforce.”
The association and Autodesk conducted the Workforce Survey in late July and early August. Nearly 1,300 firms completed the survey from a broad cross-section of the construction industry, including union and open shop firms of all sizes. The 2022 Workforce Survey is the association’s 10th annual workforce-related survey.
Source: AGC
