Labor Shortages are Prompting Firms to Increase Pay and Become More Efficient but Threaten to Slow Economic Growth over the Long-Term Officials Warn as they Call for New Workforce Measures
Two-thirds of construction firms report they are having a hard time filling hourly craft positions that represent the bulk of the construction workforce, according to the results of a 2016 industry-wide AGC survey on workforce. The labor shortages come as demand for construction continues to grow, prompting many firms to change the way they pay and operate to cope. As a result, AGC continues its efforts to push for new workforce measures to improve the pipeline for recruiting and training new craft workers.
Of the 1,459 survey respondents, 69 percent said they are having difficulty filling hourly craft positions. Craft worker shortages are the most severe in the Midwest, where 77 percent of contractors are having a hard time filling those positions. The region is followed by the South where 74 percent of contractors are having a hard time finding craft workers, 71 percent in the West and 57 percent in the South.
Tight labor market conditions are prompting nearly half of construction firms to increase base pay rates for craft workers because of the difficulty in filling positions. Twenty-two percent have improved employee benefits for craft workers and 20 percent report they are providing incentives and bonuses to attract workers.
Forty-eight percent of firms also report they are doing more in-house training to cope with workforce shortages while 47 percent report they are increasing overtime hours and 39 percent are increasing their use of subcontractors. In addition, 37 percent report getting involved with career-building programs in local schools. Twenty-one percent report they are increasing their use of labor-saving equipment, 13 percent are using offsite prefabrication and 7 percent are using virtual construction methods like Building Information Modeling.
To assist contractors with finding and training craft workers, AGC’s Workforce Development Plan calls on federal, state and local officials to outline measures to address the growing worker shortages. In particular, AGC urges Congress to reform and increase funding for the Perkins Career and Technical Education Act, enact immigration reform and make it easier to set up charter schools and career academies that teach basic construction skills.
The survey was conducted in July and August. Click here to see the national survey results, analysis of the data and regional and state-by-state results.