Industry News

Experts Weigh in on the Construction Labor Shortage

By Stephanie | Posted on

It's no secret that the United States construction industry has been experiencing a labor shortage for around a decade. According to Yahoo Finance, there are around 350,000 unfilled construction jobs nationwide –- a lingering effect of the aughts' economic downturn. We recently shared some facts and stats about this labor shortage, but we wanted to dive deeper, and we know that the best knowledge comes from those who face this issue firsthand. Over the last few weeks, we rounded up some answers from industry experts about the construction labor shortage, and how it affects their specific roles.

1. What is the most difficult type of labor to find in construction?

We first probed into what labor is actually difficult to source. We all know that there is a labor shortage, but what sort of labor specifically? What areas are lacking? Let's see what the experts had to say.

"I think individuals in the pipe trades are hardest to come by in California. My firm predominantly does Wet Utility work for Cities and Developers. We make up a small niche that often goes unnoticed as we take clean water and sanitary sewers for granted. The only time people really think about what we do is when something goes wrong... We employ a small workforce with years of experience in pipeline. Not every employer has the luxury I have and that’s the problem. Even as we look toward expansion, we will have to entrust in Unions that the next generation of skilled labor will be ready when the torch is passed on from senior employees." - Kristion Grbavac, President, GRBCON Incorporated

"Electrical workers experienced in Substation and Transmission line construction are harder to come by because it is a specialized industry." - Kyle Urrutia, Project Manager, Station Electric Inc.

"Skilled labor is what's becoming harder to find. There's not a group of young people coming into the trades and into the industry... I just don't know what's going to happen when there's really not a huge group of people to take on those skilled labor tasks." - Christian Naylor, Owner, Naylor Construction Inc.

The consensus is that there is a general lack of skilled trade workers in the United States, but depending on who we spoke with, there were different opinions on specifically which tradesmen are hardest to find.

2. How does the current labor shortage in construction impact your role specifically?

Most of the experts we spoke to hold office-based positions, such as project managers, engineers, presidents, and owners. We asked about their firsthand experiences with the labor shortage, and how it affects their projects on a daily basis.

"As a structural engineer, we are making decisions on a daily basis that will directly impact labor and cost. Throughout the design process, we must consider material choice (wood, steel, concrete, etc.), material cost, and constructability. The shortage of skilled labor impacts our role as a designer because we have the final say in what is being built, which directly correlates to cost in materials and labor. Due to lack of contractor involvement during the design process, we are often asked to redesign for “value engineering” after the contractor provides a cost estimate. Value engineering redesign can save a project a lot of money, but upfront costs grow as the design team has to refine their design" - Stewart Hooks, Project Manager, KPFF Consulting Engineers

"With the vast amount of Public and Private Sector Construction occurring in the current market, it’s all too easy to grow a backlog that one’s labor force cannot handle. Basically, it’s easy to bite off more than you can chew. The assumption that you can just assemble a competent crew is easier said than done. As an owner, I’ve had to practice restraint with my business development strategy. It’s a difficult pill to swallow because margins are high and work is plentiful. Even though margins are healthy, a competent workforce is a necessary condition for profitable work. Profit can be eaten up quickly when projects aren’t being constructed by specialized tradesman with proper training. We’ve noticed several start-ups loading up on work and then having problems fulfilling contracts leaving owners frustrated and companies scrambling to meet deadlines." - Kristion Grbavac, President, GRBCON Incorporated

"I am having to spend more time during the day dealing with trade issues directly related to not enough labor on the job or they are not skilled at the work they are performing which causes me to have to get involved with issues of poor workmanship." - Russ Clark, Director of Purchasing, New Pointe Communities, Inc.

"As a PM, ensuring each job is properly staffed with experienced labor gets challenging when experienced employees move on from the company and younger unexperienced laborers do not have a foreman in the field who can train them well. Labor shortages add to the challenge of properly staffing a project." - Kyle Urrutia, Project Manager, Station Electric Inc.

It seems that their biggest concerns are that projects become delayed due to the fact that positions are so difficult to fill. On the other hand, with the abundance of available jobs, some contractors become overwhelmed after signing on to too many projects at once, and the quality of their work decreases.

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3. What do you think about prefab, modular construction as a solution to the labor shortage?

There's recently been some industry buzz around prefabricated and modular materials, and have been a proposed solution for the ongoing labor shortage. We wanted to check with the experts and see what they think about offsite manufacturing.

"I think that prefab construction is a viable option that can not only reduce the impact of labor shortages, but also reduce the overall project cost in many instances, and should be considered on appropriate projects. I have a client who has constructed modular hotels where everything is assembled in a factory, from plumbing and electrical to flooring and wall finishes, so it is almost literally a plug-and-play operation once the units are delivered to the job site. This process has actually resulted in both reduced costs and time savings." - Jon Arenz, Senior Project Manager, Latitude 33 Planning and Engineering

"I think prefab modular construction is a big step in the right direction. It provides a better QAQC process, reduces waste, reduces schedule, and allows for innovation. In my humble opinion, the construction industry is one of the most archaic and least progressive industries in our modern world. This is mostly due to construction being a highly complex process, requiring experts such as financial analysts, developers, surveyors, designers, engineers, lawyers, construction managers, contractors, skilled labor, and immense capital to come together in an effort to create the final product. Prefab modular construction would provide an opportunity to bring many of these experts under the same roof. Which would in turn, create an opportunity for innovation in the industry." - Stewart Hooks, Project Manager, KPFF Consulting Engineers

"I think implementation of prefab technologies is necessary to assist with the labor shortage. In places like California, there’s a housing shortage that is only driving up rents and property values. The City of Los Angeles is adopting this technology to expedite the construction of temporary housing for the city’s growing homeless population. Commercially, tilt-up construction is booming as the cost to construct is significantly less per square foot than traditional construction. On the business side of things, I think prefab has already been widely adopted. On the single and multi-family side, I don’t think the breakthrough has happened yet. There’s a reluctance on the housing side of the spectrum, but I think the attitudes will change when more options become available." - Kristion Grbavac, President, GRBCON Incorporated

While prefab and modular construction had rave reviews from some parties, not everyone was so supportive of the concept.

"To me prefab and modular construction is not a suitable solution for the labor shortage. First, like in every field, when you send a product to mass production you are losing quality.Using machines instead of qualified men power you slowly lose knowledge and experience that will eventually deepen the gap and lack of qualification. It’s not solving a problem, but rather creating a bigger one. Second, to me, construction is a very passionate filed with a beautiful legacy and history all over the world. Taking in into a manufacture ruins the magic. Makes this filed less unique" - Eliya Chacham, Assistant Project Manager, SC Prime Energy Ltd.

"Off-site construction as a process is just one part of the solution. Increased collaboration though technology is another part." - Ricky Holak, Development Manager, Prometheus Real Estate Group

When it comes to the idea of prefabricated, modular construction, there are mixed reviews on whether or not it will actually help with the labor shortage. It appears that at this time, prefab technology isn't yet at the level where it can just fit in to any project, but in the future, it could be a game-changer. However, some experts argue that modular construction will never have a place in an industry that prides itself on craftsmanship.

4. In your eyes, what effect does technology have on the construction industry right now?

While our main focus of our research was on the labor shortage, we can never pass up an opportunity to get more insight into the industry's opinion on construction tech!

"Technology has a huge effect on every aspect of daily life. Now days with the smart phone, everyone is walking around with a personal computer in their pocket. The construction industry is no different. No matter what part of the construction industry you are in, having a working knowledge of the technology in your field is vital. Technology will continue to advance and be increasingly important to our industry." - John Gallagher, Regional Career Development Coordinator, Home Builders Institute (HBI)

"Technology has increased efficiency in the construction industry immensely. I think the adoption of technology has been slower than in other industries. Construction is a business of repetition. Whether it’s the trades or the office, once we master a task we’re reluctant to change how we do it. In my experience, technology has made uncapitalize project management, Estimating, Payroll, Job Costing, and Disputes much easier to manage. As management approaches retirement, individuals will be tasked with filling their shoes. As someone who grew up with technology, I see it only as a positive in the Construction Industry. I think we’re approaching a technical revolution in construction that will allow work to be done more efficiently and economically. Construction is data driven and as tech advances in the industry I only see upside for contractors who embrace it." - Kristion Grbavac, President, GRBCON Incorporated

"As we all know, technology is taking a larger and larger role in design and construction and has provided many benefits throughout the process. The use of BIM can help discover conflicts within the building before construction even starts and also lead to more accurate bidding from general contractors and subcontractors. Grading operations have become more automated and accurate. Even drones have helped the construction industry." - Jon Arenz, Senior Project Manager, Latitude 33 Planning and Engineering

"I believe technology is allowing the construction industry to grow in incredible ways. It has improved communication, efficiency, and allows for ecological growth as well. The only issue that I see on a daily basis is a lack of “tech-savviness” from individuals/companies." - JJ Stavola, Project Engineer, Cannon Constructors South, Inc.

The folks we spoke to are optimistic for the future of technology in the field. These experts are adopting new tech into their workflows to help communication and productivity both on jobsites and in the office.

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5. What advice would you give to someone who is looking to start a career in construction?

Our last request for the experts was to impart some wisdom about joining the industry. With a labor shortage this large, there are more than enough spaces to be filled, and someone interested in the industry may wonder what the best way to get started would be.

"No matter what you choose to do, give it your all and ask lots of questions. That’s the quickest way to succeed. And don’t discount going into the trades. It seems like there is a stigma about skilled labor being an “inferior” option, which is so far from the truth. There is an immense demand for skilled labor that pays well and doesn’t require a college degree!" - Jon Arenz, Senior Project Manager, Latitude 33 Planning and Engineering

"On the office side, you should definitely get a major in Engineering or Construction Management and obviously internships are huge. If I was giving advice to a young person, I would say to try and get as much field exposure as they can so they can learn about what the trades are doing. Maybe that looks like a summer internship, it's all about getting better exposure. On the field side, everything just takes time. Find out what you like to do and just work your way up. There's tons of great opportunities, everyone just wants to immediately be the one running the show and that's just not how it works. Everyone in the field starts at the bottom and works their way up, there's no shortcuts." - John Tontz, Project Manager, Suffolk Construction

"If you’re interested in Construction on either the trade side or office side, I’d recommend exploring when you’re young. If your desire lies in learning a trade, I’d recommend an apprenticeship program. Apprenticeship programs offer good paying jobs, benefits, and opportunity for career advancement. If you’re interest lies in management, take advantage of internships. Many of the top contractors offer internships for college students and recruit directly from universities. I think my biggest piece of advice to someone would be to ignore the negative stigma around construction. Many of brightest minds I have met have been tradespeople; they’ve solved problems that even the most qualified engineers can’t seem to figure out. The best part about construction is that your education isn’t a hindrance on your mobility." - Kristion Grbavac, President, GRBCON Incorporated

These experts all were quick to address the stigma that sometimes is associated with working in construction, and skilled trades in particular. With so many different gateways into the industry, it seems that there's an option for anyone who is interested in getting their career kicked off, whether that's through a trade school, university, or apprenticeship.

We are so grateful to all of the experts we reached out to for their thoughtful answers and invaluable opinions. Thank you to those who participated and made this research possible!

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