As Baby Boomers Retire, Labor Shortage in Construction Increases

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It’s no secret that the baby boomer generation plays a major role in the progression of the construction and real estate industries, supporting contracting companies through lifelong careers and offering hard-to-come-by skills obtained through decades of hands-on experience. And as they retire and the appeal of the trade industry doesn’t quite find itself among the masses of Generations Y and Z, construction and real estate businesses struggle to navigate the talent landscape. How can you combat the challenges that arise when talent is limited? 

The Current Landscape for Construction Work

According to the U.S. Bureau of Labor Statistics, there were 313,000 job openings in the construction industry in January of this year. In an economic forecast for 2021 published in December 2020, Construction Executive predicted V-shaped recovery that would eventually turn to W-shaped recovery – meaning sharp economic declines followed by sharp rises.

Challenges in Hiring for the Construction Industry

empty construction work site; wood interior; sun coming through glass windowsWhile labor shortages are detrimental to companies, it puts candidates in an ideal position. Qualified and trained laborers seeking employment in the construction industry can be selective about where they work and demand higher pay and better benefits. Additionally, younger generations seek different attributes when evaluating employers, including technology. A recent survey conducted by Dell Technologies in fact revealed that 91% of Gen Z survey participants said the technology offered by an employer would influence their job choice if faced with similar employment offers. Different attraction and recruitment strategies will be required, as a result, if you’re searching for top talent among younger generations.

In addition, the “gig economy” is on an upward track, as Generations Y and Z look to find unique situations that meet their financial and time expectations. A laborer, for example, might prefer to work two contracting jobs through the evening and night, rather than a typical 9-to-5 shift with one company. They might also find it more financially stable to split their time among in-demand projects instead of devoting their skills to one salaried job. Therefore, companies that are open to hiring employees on a part-time, contract or project basis will benefit from a larger candidate pool.

Navigating These Challenges

With the state of the labor market, proactive talent acquisition efforts are required to be effective and remain competitive. Employers can no longer hire in a reactive manner. This means, construction and real estate employers should:

  • Build and enforce strong relationships with local high schools, technical colleges, universities, industry associations and community groups to develop a sustainable talent pipeline
  • Leverage your current employees’ connections through an employee referral program
  • Consider contacting and negotiating with “boomerang” employees (employees that have left your company that you wish to bring back)

It’s also important to hire candidates for their potential rather than experience, in many cases. As new generations of employees enter the workforce, you may find that most candidates possess only entry-level skills or knowledge, and they may not have previously considered a job in the construction industry and obtained the necessary education. Therefore, the future of hiring should be directed at what employees can do, not the specific jobs they’ve done in the past. Some occupations in the industry do require a college degree; however, many others ask for a high school diploma or less education.

Construction workers can learn many of the skills they need on the job and can continue learning after they’d been onboarded, too. As a start, you can reassess the minimum requirements within your job descriptions to align with the available talent in the market. Then, focus on finding candidates that share your core values and align with your organization’s culture. Knowing your competition and what sets you apart as an ideal place to work is essential when utilizing this recruiting strategy. Highlight these differentiators through your career site, messaging, recruiting collateral and advertisements.

Strategies for the Future

As businesses struggle to combat the negative effects of the pandemic, while juggling the ongoing challenges of a labor shortage as baby boomers retire, construction leaders must focus their efforts on proactive attraction, recruitment and retention strategies. Strong, competitive benefits combined with a positive employer reputation will help secure talent, and the opportunity for entry-level employees to learn on the job will attract prospective laborers. For help with your recruiting and talent strategy, ask our experts the burning questions you have.

This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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