Construction Labor Shortage Calls for Proactive Solutions

According to the Marcum LLP 2019 Survey of Northeast Ohio Real Estate and Construction Industries, more than half of all respondents ranked “securing skilled labor” as the biggest threat to their businesses over the next 12 months. While it’s interesting that 57% of respondents are increasing salaries to address the lack of skilled labor, that action alone won’t be a sustainable solution given the tight labor market and the “war on talent.” Proactive solutions are needed to avoid higher job costs and prolonged project completion rates.

Diagnosing the Problem

Many construction workers left the industry during the recession to find work in other industries. Of the 600,000 jobs leaving construction nationally, many never came back. As baby boomers retire in vast numbers, millennials often don’t have the same interest in construction jobs or lack a clear understanding of what a career in the industry offers. Additionally, the majority of school districts simply don’t offer technical education programs that provide students with an understanding and acceptance of high-paying fields such as construction. Clearly, there is a need to shake up old notions of the industry.

Partnerships

One of the best ways to address the worker shortage problem is for the industry to form partnerships with schools, from high schools and colleges to trade schools. For example, the Construction Employers Association (CEA) formed a partnership with the Urban League of Greater Cleveland for a construction trade initiative aimed at minorities and women in Greater Cleveland with high school diplomas or GEDs. Participants in the program receive education related to:

• Career training
• Blueprint reading
• Math skills
• Safety
• Acclimation to construction and building trades

Participants make site visits and receive assistance with apprenticeship and trade employment. Programs like these are gaining in popularity throughout Ohio and the nation as the industry recognizes the need to cultivate talent.

Internships and Apprenticeships

What better way to learn about an industry than to experience the trade firsthand? College internships and apprenticeship programs offer a glimpse into long-term careers with management opportunities. Our construction survey respondents are on the right path; almost half (46%) are partnering with high schools and trade schools to address the challenge.

In-House Training

Ongoing training will fully integrate new employees into their daily roles. For example, hard-skills training could include training on specific construction equipment, or safety data sheet (SDS) training. The more a company can establish an atmosphere of true employee engagement, the more employees will feel they are treated with respect and valued.

Mentoring

Given the high rate of employment, companies must also work hard to retain the good employees they already have. Mentorship programs offer a way to build lasting relationships through coaching and training. Keep in mind that millennials want different things from their employment—providing the latest technology, flexible hours and opportunities to be innovative can go a long way.

The ACE Mentor Program of Cleveland, which partners with the Cleveland Metropolitan School District, has engaged more than 150 mentors and supported 150 students on their path to study architecture, engineering or construction since 2008. It is through these partnerships that the industry will begin to attract a trained and qualified labor pool for the construction industry.

Optimistic Outlook

In addition to the actions above, the construction industry has reason to be optimistic. The state of Ohio’s $15 million TechCred workforce program, which provides micro-degrees, includes the construction industry as long as IT training meets the micro-degree criteria. The Ohio budget also included $5 million in Industry Sector Partnerships (ISP) funding, which brings together businesses, education and community leaders to solve local workforce needs. The construction industry can tap into this funding for the development of new tools and programming.

If you have questions about how to become compliant with the new revenue recognition standards or other Construction Industry matters, please contact Roger Gingerich at 440.459.5725 or email Roger.