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The Skilled Labor Gap in the Construction Industry

The skilled labor gap has been an issue experienced by the construction industry for several years. This article will take a closer look at how it happened, its impact on the industry, and the solutions professionals have implemented to combat this problem.

What Led to the Gap

The construction industry has been battling a long-standing negative perception. Over the course of several generations, the emphasis on a 4-year college education was prioritized over vocational or technical training post-graduation. The Bureau of Labor Statistics (BLS) conducted a study in 2023 which shows the construction industry is only represented by only 11% of the industry under the age of 25.

One of the most alarming statistics has been the rapidly aging population of the construction workforce. According to the same survey conducted by the BLS, the construction workforce comprised 20% of workers aged 55 and older with roughly 42% of the workforce aged 45 and older. As these employees near and enter retirement, many companies not only face the challenge of filling these roles but also the challenge of filling the skills and expertise that employees take with them.

The Impact on the Construction Industry

The skilled labor gap coupled with rising inflation has sent wages soaring. ABC’s Construction Employment Report from September shows an increase of 4.6% in hourly wages year over year for the construction industry with the average hourly wage coming in at $38.53.

On top of labor costs, many contractors are experiencing project delays. According to a survey conducted by the Associated General Contractors of America in July and August of 2023, roughly 61% of respondents reported project delays due to labor shortages.

Skilled labor gaps have also created concerns around the overall quality and safety of the jobs being completed by contractors. As many contractors are turning to those with less experience to complete the project increasing the risk for rework and job site accidents.

Combatting the Issue at Hand

Some of the biggest changes in recent years has been the industry’s ability to connect with the newest generation. Many high schools are adopting and embracing vocational and technical training programs to garner interest. This has correlated to vocational-focused community colleges seeing an increase of 16% from 2022 to 2023. The trend does not stop there, as the White House also reported an increase of over 300,000 apprenticeships from 2015 to 2024. According to a study of Generation Z high school seniors by New America, half of the respondents believed it’s possible to get a well-paying job with only a GED or diploma.

The construction industry has also seen increased IT spending to combat labor inefficiencies. An article published by Construction Dive found that one engineering firm was realizing a 20% increase in capacity from completing its rendering designs in 3D rather than 2D technology. Additionally, a survey conducted by Dodge Data & Analytics and Trimble Construction found that approximately 92% of their surveyed population (including owners, architects, engineers, GCs, CMs, and specialty trade contractors) were using digital workflows to assist with productivity, quality, and overall efficiency of their projects.

Continuing the Charge

The construction industry has been in a challenging position with its labor shortage. The increasingly aging population of its workforce, growing labor costs, and an ongoing battle of public perception has tested the industry. The promise of vocational and technical education growth coupled with increased use of technology brings hope that this labor gap can be bridged in the future.

For more information about McKonly & Asbury’s Architecture, Engineering, and Construction (AEC) experience, visit the AEC Industry Page and don’t hesitate to contact a member of the AEC team.

About the Author

Dan Dorgan

Dan joined McKonly & Asbury in 2018 and is currently a Manager with the firm. He is a member of the firm’s Audit & Assurance Segment, primarily working with clients in the manufacturing and construction industries. Dan also perfor… Read more

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