April 09, 2014
First Annual Marcum JOLT Survey Finds Construction Skills Shortages Suppress Hirings, Despite Increase in Job Openings
New York City, NY - The Construction Services Practice of Marcum LLP, a top national accounting and advisory firm, today released the results of its first annual analysis of construction industry hiring trends, based on the Bureau of Labor Statistics' Job Openings and Labor Turnover (JOLT) Survey. Marcum's debut JOLT Survey Analysis found that shortages of in-demand construction skills helped drive down the construction hiring rate in late 2013, despite a significant increase in the number of construction job openings.
With just 269,000 new employees engaged on a seasonally adjusted basis, the December 2013 hires rate was 4.6 percent, the lowest since February 2007. In the same month, the number of available construction job openings (143,000) was higher than in any month since August 2007. The December 2013 job openings rate of 2.4 percent matched the post-recession peak in November 2013.
"The very strong implication of these data is that there are relatively abundant opportunities for workers in construction, but they are either unwilling or unable to accept available jobs," wrote Marcum's Chief Construction Economist, Anirban Basu. "The skills shortages that construction firms have fretted over for years are here. Demographic and other factors suggest that these shortages will worsen over time, eventually translating into significant construction wage growth."
The analysis also suggests that employers appear to be working harder to retain talent. The December 2013 job separation rate was 4.8 percent, well below historic averages. Compared with December 2005, when construction job separations were at their historic peak, December separations in 2013 dropped by almost half (43 percent) to 214,000.
"The falling job separations rate is not merely a reflection of an improving economy. The job separation rate declined during portions of the Great Recession and has been falling ever since, even in the context of sporadic industry recovery," Mr. Basu observed.
Looking ahead, Marcum's JOLTS analysis predicts that skills shortages will worsen over time, impacting both industry profitability and potentially project safety in the process. "For leaders of construction firms, the continuing shortage of skilled labor will mean keeping a focus on retention and recruitment," said Joseph Natarelli, National Leader of Marcum's Construction Services Practice and Partner-in-Charge of the Firm's New Haven, Connecticut office.
"More time will need to be spent thinking through staffing models, skills requirements and technology, benefits, sources of talent and models for retention. On the other hand, the ongoing shortage of sufficiently skilled workers will generate enormous demand for new labor-saving technologies, the utilization of which will ultimately translate into substantially enhanced productivity," Mr. Natarelli said.
The new Marcum JOLT Survey Analysis of construction industry hiring trends is an annual complement to the quarterly Marcum Commercial Construction Index. To view the complete 2013 JOLT Survey Analysis, visit www.marcumllp.com/JOLT.
Marcum LLP's Construction Services Group provides strategic and timely accounting, audit, and consulting and taxation services to construction clients ranging from start-ups to multi-billion-dollar enterprises. The firm’s technical experts serve on many industry boards and committees and regularly contribute to construction conferences and publications. For more information, or to download the Marcum Commercial Construction Index, visit www.marcumllp.com/construction.
About Marcum LLP
Marcum LLP is one of the largest independent public accounting and advisory services firms in the United States. Ranked #15 nationally, Marcum LLP offers the resources of 1,300 professionals, including over 160 partners, in 23 offices throughout the U.S., Grand Cayman and China. Headquartered in New York City, the Firm's presence runs deep, with full-service offices strategically located in major business markets. Marcum is a member of the Marcum Group, an organization providing a comprehensive range of professional services spanning accounting and advisory, technology solutions, wealth management, and executive and professional recruiting. The Marcum Group companies include Marcum LLP; Marcum Technology LLC; Marcum Search LLC; Marcum Financial Services LLC; Marcum Bernstein & Pinchuk LLP; MarcumBuchanan Associates LLC; and Marcum Cronus Partners LLC.