Construction Companies Struggling to Find Workers

An astonishing 94 percent of construction firms in the U.S. are struggling to hire workers, according to a new survey from the Associated General Contractors of America (AGC) and HR technology firm Arcoro.

The survey comes after Vice President Kamala Harris announced her pledge to build 3 million homes in four years if she wins the 2024 Presidential Election, according to The Associated Press.

It reveals that construction projects are experiencing delays due to the limited workforce, and points to a lack of investment in construction workforce education and investment as a root cause of the issue.

Newsweek spoke with Kenneth D. Simonson, the chief economist for the AGC. “AGC has conducted this survey for 12 years,” he explained in an email. “Before the pandemic and since the industry began to recover in 2021, very high percentages of firms have reported difficulty filling nearly all types of hourly craft positions along with construction-focused salaried positions such as project managers and estimators.”

“But it was striking that the percent reporting difficulty increased this year, even as job openings, hires, and wage increases have tapered off in the overall private sector according to Bureau of Labor Statistics (BLS) data.”

The survey, which included nearly 1,500 firms from a broad cross-section of the construction industry, found that 94 percent of contractors have open positions, and among those, 94 percent are having difficulty filling at least some of those roles.

This shortage is most acute among the craft workforce, which performs the bulk of on-site construction work. Nearly one in three contractors reported having at least 11 unfilled craft positions as of June 30.

“Workforce shortages have been a long-standing concern, and it is not surprising that it is again the biggest source of project delays,” Simonson said.

These workforce shortages are causing significant delays in construction projects. Fifty-four percent of contractors reported that they have experienced project delays due to labor shortages, a higher percentage than those who have faced delays due to supply chain issues or shipping challenges.

“Owners should expect many projects to take longer than they may have in past years.” Simonson said. “The scale, complexity, and number of projects of the same type is greater, while the pandemic and an aging workforce mean there are fewer workers with long experience to complete tasks and train new entrants.”

“Projects such as semiconductor fabrication plants, data centers, and transportation infrastructure are taking longer and costing more. Some projects have been scaled back or postponed.”

“These impacts are likely to intensify, slowing economic growth and potentially impacting safety and environmental goals. Contractors are doing all they can to attract, retain, and upskill workers,” Simonson said.

According to the survey, 91 percent of firms increased base pay rates for hourly construction positions over the past year. Additionally, 57 percent of firms have implemented online recruitment strategies to attract younger workers, and 51 percent have engaged with career-building programs like high schools or training facilities to cultivate future talent.

Contractors are also, “Investing in drones, robotics, and other labor-saving equipment, along with many types of software that reduce the need for workers or the skill level required to complete tasks. But these steps won’t be sufficient if not enough people learn about the career opportunities construction offers,” Simonson said.

Firms are also investing in internal training programs to address the skill gaps among candidates. Forty-two percent of respondents reported that they have initiated or increased spending on training and professional development to address workforce shortages. One in four firms has increased their use of online and video-based learning programs to enhance their training efforts.

Simonson told Newsweek: “Median pay, as measured by BLS series, average hourly earnings for production and nonsupervisory employees, is 19 percent higher in construction than the overall private sector. Starting pay for high school graduates is even greater, as are the advancement opportunities. And construction workers consistently mention being able to point to iconic projects they have worked on as a source of job satisfaction.”

Jeff Shoaf, CEO of AGC, noted in the survey that federal investment in encouraging students to pursue four-year degrees is four times greater than the support for workforce development programs in fields like construction.

This disparity has led to a shortage of qualified candidates, with 62 percent of survey respondents stating that available candidates lack the necessary skills or certifications for construction jobs.

Simonson told Newsweek: “There are two measures Congress should take this fall: They can increase the amount of money in the Workforce Innovation and Opportunity Act allotted to training, as a House-passed version already does. And they can also increase the amount of money dedicated to in-school construction education programs when they set spending levels for the Perkins Vocational and Technical Education Act.”

“The federal government can reach students, parents, local officials, and school systems nationwide. Each of those parties has a role in making sure that education and training institutions provide students and adults with the information and skills needed to include construction among their career choices.”

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