The Brookings Institution estimates about 1.5 million people will leave their infrastructure jobs every year over the next decade.
Emerging from the coronavirus pandemic, contactors are struggling to fill crews. Construction employment dropped by 20,000 from April to May, the third decline in the previous four months. That’s further challenged the industry, which for years has faced a stagnant labor pool.
President Joe Biden is pushing two major bills to boost both infrastructure and the supply chain, but some in the industry believe these programs may increase workforce burdens.
In a labor report, the Associated General Contractors (AGC) noted that BLS statistics put worker numbers at 225,000 below the pre-pandemic peak of February 2020.
Nonresidential construction employment shrank by 21,800 in May and was 260,000 below the February 2020 level, reported AGC chief economist Ken Simonson.
“A total of 642,000 former construction workers were unemployed in May, a sharp decline from May 2020 but the second-highest May level since 2014,” he wrote.
The industry’s unemployment rate in May was 6.7 percent, compared to 12.7 percent in May 2020.
For total construction, hourly earnings in April averaged $32.59, 8 percent more than the average for the nonfarm private sector.
But over the past two years this premium shrank by 2.2 percentage points from 10.2 percent in April 2019.
This implies that “the financial attractiveness of construction may be diminishing as other sectors that are expanding faster raise pay to attract more workers,” said Simonson.
The premium diminished the most for employees of heavy and civil engineering construction firms (minus 4.5 points, from 16 percent above the private-sector average in April 2019 to 11.5 percent in April 2021).
Citing BLS data, the AGC reported there were 357,000 job openings in construction, seasonally adjusted, at the end of April.
Hires in April totaled 335,000 or 4.5 of the employment total for the month. “Apart from the pandemic-depressed 3.1 percent rate in 2020, the rate was the lowest for April in the 21-year history of the series,” said Simonson.
The job openings rate (4.6 percent) was the second-highest total for any month since the series began in December 2000, he added.
Recruiting construction workers can be more expensive than keeping them on the job.
“Many young employees know little about the industry,” said Blair Chenault, CEO of construction software provider Flashtract.
In a blog on his company’s website, Chenault wrote that long-term workers have been the backbone of the industry.
“As these workers reach retirement age in droves, younger workers aren’t stepping in to fill the available positions.” Younger workers believe the construction industry is unstable, he said.
Another big reason: The encouragement to seek higher education equals discouragement from manual jobs like construction.
Plus, construction comes with safety hazards that make proper training a vital part of the industry, he wrote.
“Training long-term employees is well worth the cost and time, but new employees can be unpredictable,” said Chenault. “Losing trained employees is expensive and leaves fellow workers carrying an extra burden on the job site.”
The White House’s plan to alleviate supply-chain disruptions could create other burdens.
While boosting labor numbers and training, the proposal would increase the cost of doing construction business, believes the AGC.
Association officials want the Biden administration to address rising materials costs and growing labor shortages.
Stephen E. Sandherr, the association’s CEO, said Biden’s supply-chain program “would limit the ability of workers and employers to fill needed construction positions.”
He believes that imposing mandated hiring percentages, inflexible labor agreements and artificially high pay rates will cut the number of firms and workers available for infrastructure and other construction programs.
“The construction industry is experiencing widespread and growing problems with the cost and supply of materials,” said Sandherr. “These challenges will make it more costly and difficult to achieve the administration’s goals for infrastructure, renewable energy and affordable housing.”
Solutions to Stay Afloat
Baywork, a San Francisco area coalition of water agencies, has created apprenticeship programs to get students that experience while they’re in school, reported Hechinger.
“Utility managers believe this approach will solve some staffing problems.”
Some agencies in the area have agreed to hold community college classes at their plants. It cuts down on students’ commute times and provides practical experience.
Oakland’s Dublin San Ramon Services District is offering plant tours and job fairs to boost interest in water jobs.
“We have to market these jobs and make sure high-school kids who are smart consider it,” said Levi Fuller, district wastewater operations superintendent.
Gender and diversity, as well, plague construction sectors. Brookings found that more than 82 percent of power plant workers are white. And, 82 percent of infrastructure workers are men.
“A more diverse workforce would help fill jobs, but it will take broader steps to complete the slew of infrastructure projects proposed by the administration,” wrote Hechinger.
A “few relatively easy fixes” the article lists include allowing Pell grants to pay for short-term college vocational programs.
Chenault of Flashtract warns that all industries will vie for the attention of transitioning job seekers.
Companies in the construction industry will need new techniques for recruiting and retaining. Here are his tips:
- Expand recruitment tactics and meet potential employees where their job search exists.
“As people return to the job market, they may not even consider construction without prompting,” he wrote. “Job seekers comparing industries will be eager to learn about income opportunities, as well as benefits and advancement opportunities.”
- Improve conditions for current employees, the window into what the work experience is like within a construction company.
“Now is the time to reduce cumbersome job tasks and eliminate slow payment issues that have been known to plague the industry,” said Chenault.
Create open streams of communication with employees to ensure you’re doing everything you can to make your employees feel connected and appreciated.
“Happy employees serve as brand ambassadors to job seekers around them, he wrote.
- Recognize difficulties for employees returning to the job market who may be working through a tough time financially as they emerge from the pandemic.
“Employers will face a different situation when it comes to reaching payment agreements for new employees,” said Chenault. “Take time to reexamine your company budget to allocate funds to attracting and retaining long-term employees to the company.” CEG