Skilled-labor Shortage in the Construction Industry

As many people are aware, the U.S. labor shortage is impacting numerous industries across the country. However, the construction industry has been particularly hit hard in recent years. In fact, the industry now faces large labor shortages with over 400,000 skilled jobs to fill across the country, according to the U.S. Bureau of Labor Statistics. And, according to Chief Economist Anirban Basu, the workforce shortage is the most acute challenge facing the construction industry despite sluggish growth.

What is Creating the Shortage?

Many factors are contributing to the labor shortage, the pandemic being among the top factors. However, other significant factors include an aging construction labor force not being replaced by younger tradesman. As retirees exit construction jobs, employers are having difficulty filling the vacancies left behind.

Another factor that will greatly impact the labor shortage is the US Bipartisan Infrastructure law that was passed. The demand for skilled labor is bound to increase as the US Bipartisan infrastructure law, which projects over $550 billion in new infrastructure investments over the next 10 years, is implemented.

What’s Next for the Construction Industry?

In order to meet the demand for labor, the construction industry will need to attract nearly 650,000 additional workers on top of the normal pace of hiring in 2022, according to a model developed by Associated Builders and Contractors. General contractors who once supplied their own tradesman are now forced to outsource work to subcontractors.

Some companies are taking the initiative to build their own employment pipelines by partnering with trade schools or creating their own apprenticeship programs. Many feel the answer to the labor shortage resides in our local schools with our younger generations. Companies need to be proactive in showing these students what skilled trades have to offer them in terms of careers.

Another option is to pair up with construction associations to provide students with more opportunities. Recently, the PA Department of Labor awarded approximately a $519k grant to the Manufacturers’ Association in York to expand “Apprenticeship Ecosystems” supporting local manufacturers. A similar opportunity could be available for construction grants. After all, apprenticeships provide employers with the following benefits:

• Apprenticeships are proven models of success in developing expertise for employees.
• There are opportunities for pre-apprenticeship programs to introduce high school level students to construction trades and careers.
• Contractors and subs who invest time to develop students’ interest in their respective trades will have a competitive edge in securing future talents

As with many other industries, the construction industry is going to have to rely on new ideas and incentives to attract young talent. We will continue to monitor the challenges and opportunities that emerge over the coming months and discuss the industry’s responses in future posts. For more information regarding our construction experience, be sure to visit our construction services page and don’t hesitate to reach out to a member of our construction team.

One final note, our construction team will be hosting a webinar on June 30 entitled “Construction Accounting and Industry Update.” For more information on the topics to be covered and how to register please visit our webinar page.

About the Author

Related Industries