Spokane Journal of Business

Construction should invest more in people

Industrywide commitment to worker training needed

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It took mere months for the Great Recession to claim millions of American jobs. Now, as employers scramble to rebuild the workforce, they’re facing a dilemma: The labor pool is shrinking, and it could be decades before it comes back.

Across the nation, in industries as varied as construction, trucking, technology, and manufacturing, it’s becoming increasingly difficult to find skilled workers. With the economy in its ninth year of growth and another baby boomer retiring every nine seconds, the labor crunch is about to get much worse.

Two other pressure points add to this pain. Millions of people nationwide have dropped out of the workforce, owing to factors such as disability, opioid addiction, and prison records that make it hard to obtain jobs. The labor force participation rate, which measures the percentage of the adult population that’s working or actively seeking employment, has dropped to 63 percent from 67 percent since 2000.

On one hand, almost 40 percent of American employers say they can’t find people with the skills they need, even for entry-level jobs. Almost 60 percent complain of lack of preparation, even for entry-level jobs. On the other hand, that skills gap represents a massive pool of untapped talent.

The skills gap takes different forms. In some cases, it is a matter of youth struggling to enter the workforce; in others, it is midcareer learners who have lost their jobs due to companies closing their doors or layoffs, and who now must adapt. Whatever the circumstance, when people are disconnected from the workplace, they often disconnect from other social institutions as well.

A confluence of factors has led to these circumstances, including cultural shifts, changes in educational philosophy, the atrophying of apprenticeship programs in much of the nation, and the ongoing large-scale retirement of many of the most talented, skilled, and experienced construction workers.

It’s predicted that during the next 10 years, the nation will face a shortage of 8.2 million workers. Despite years of discussions about current and impending workforce shortages, industry-wide commitment to developing the construction workforce hasn’t been obtained. The issues are far from resolved and are intensifying as other industries compete for the same limited pool of craft professionals.

Now is the time for the industry to invest in workforce development and become an industry of choice. Construction needs a culture change, and to accomplish this, the industry must elevate its commitment to its people.

Investing in people is the most important investment a company can make. Training shouldn’t be an occasional focus, but an ongoing part of the company strategy to recruit, develop, and retain the best people possible. Apprenticeship produces skilled professionals with real work experience, demonstrated competency, and work ethic--the model employee. This is every employer’s dream and a potential solution to workforce issues in Washington state and in the U.S.

The average employee today stays at his or her job for 4.4 years, according to the most recent available data from the U.S. Bureau of Labor Statistics, but the expected tenure of the workforce’s youngest employees is about half that. With this in mind, training and mentoring programs are cost-effective solutions to recruit and retain young craft professionals who might not have experience working with his or her hands.

The elimination of shop class in high schools played a big role. For many students, this was their first exposure to the kind of hands-on experience that could ignite a career in a trade. Taking shop and mechanical classes out of school cut off the pipeline. The No Child Left Behind program forced high schools to shut down all those things and focus on college.

The Great Recession compounded the problem. Countless contractors went out of business and never came back, even when the economy rebounded. The trades lost a significant chunk of veteran workers and missed several years of potential worker training. Apprenticeships dropped sharply as contractors struggled just to survive.

The construction industry lost 1.5 million workers during the recession, and we’ve only brought back about 600,000. The median age of a construction worker right now is more than 40 years old. The long-term problem is, who’s going to be the next generation of construction workers?

The skilled trades face an uncertain future. The last few years have seen an increase in new workers entering the fields, but as older workers retire and the shortage intensifies, the effect can be hard to predict.

The National Association of Homebuilders found last year that 82 percent of builders saw labor cost and availability as a major problem in 2017, up from 13 percent in 2011. Nine years after the recession, the pace of home construction remains more than 10 percent below normal rates, and there was just 3.4 months’ worth of single-family home inventory on the market in January, just above December’s record low of 3.2 months. Builders want to boost those numbers but can’t find the workers.

An array of circumstances planted the seeds of the current trade shortage in the early 2000s. Several developments piled up to create the perfect storm that threatens to leave plumbing, electrical, carpentry and other skilled trades with a severe worker shortage in the years to come.

Meanwhile, all the trades face a race against time. The numbers are stark. Among carpenters, for instance, the Bureau of Labor Statistics expects the need for new jobs between now and 2026 to be 104,400. But factor in retirements and veterans leaving the workforce for other reasons, and the total number of new job openings by 2026 will be 109,900. Carpenters are currently retiring faster than new apprentices are joining to take their place.

Of course, preparing the future is a risky business. Twenty different economists can come up with 20 different predictions about what the economy will do, and there’s no guarantee we won’t see another recession in the next 10 years.

Research from the U.S. Chamber of Commerce Foundation shows that leading contractors understand that in order to remain competitive in today’s economy, they must approach talent recruitment and development like a business investment. If employers define their role as that of the end customer, they can develop solutions to the skills gap. Industry has the responsibility to work with schools and help focus and guide curricula and training to meet their needs. Now is the time for contractors and owners to take leadership in improving the system for recruiting, developing, and employing craft professionals. When this process is viewed as a business strategy, it becomes a permanent practice of developing the talent pipeline.

Although this shortage of skilled craft workers in the construction industry has produced a “ripple effect” of several negative consequences, all is not lost. What might seem like a huge problem can actually be viewed as an outstanding opportunity for young people who are looking to enter into a career field that doesn’t require a four-year college degree.

In many ways, pursuing a career in the construction trade is a smart occupational choice, because the demand for these highly specialized skills is off the charts right now. Young workers can receive training, education, and real-world experience through trade apprenticeship programs that can put them in a position to reap significant career rewards.

With bold leadership and transformational change, the industry’s overall skill level can improve significantly. By applying the resources readily available to develop the workforce, owners and contractors will find growth and success in today’s competitive construction market.

Kim Waseca-Love is the director of education, training, and apprenticeship for the Spokane Home Builders Association.

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