Finding Qualified Labor – A Contractor’s Perspective

The shortage of skilled labor continues to plague the construction industry. The shortage can be the result of several factors: retiring Baby Boomers, unemployment rates levelling out, and millennials choosing jobs outside of construction. We spoke to several contractors about the impacts they’re feeling as a result of this shortage.

Steve Adams, Director of Business Development at Astra Construction Services, LLC
Ben Watkins, Vice President of Operations at McCarthy Building Companies, Inc.
Chris Thompson, Operations Manager at Johnson-Laux Construction

Here are their perspectives.

Question: How has the shortage of skilled labor impacted you or your company?

Steve: It has definitely been a problem we’ve recognized. There’s a shortage of people with interest in the construction industry. It goes back to the Great Recession – so many lost their jobs during that time and were burnt, and have decided not to return to the industry. Those that are graduating from schools, there’s not a lot coming out that want to get into construction. They are looking for other types of opportunities.

Ben: I operate out of Atlanta, and my area of responsibility is the Southeast Region. We’ve definitely seen some pretty significant swings in labor and what’s available throughout the last couple years. Around the 2010-2012 timeframe, we had the recession, and what happened, especially in this region, is there was not a lot of work out there. The amount of construction happening significantly decreased, so we saw a lot of our craft labor force go into other industries. The after-effect was now that construction has come back, those people aren’t necessarily running back to get back into the trades. So we’re having to go try to see how we can fill these craft labor positions in different ways.

Just here in Atlanta, we have two stadiums, and two huge corporate headquarter jobs happening, all simultaneously. So there’s inherently a huge demand on labor as a result of those projects, and that, coupled with the after effects of the recession, have created a huge demand crisis for craft labor here.

Question: What are you doing to combat this shortage?

Chris: Fortunately from a superintendent and project manager standpoint, we have been very successful at vetting some qualified candidates. We’ve made some adjustments in our benefits package over the last couple of years to make jobs a lot more attractive opportunities for potential employees. Our salary structure has been adjusted and we’ve added a 401(k) program. And we try to be as flexible as we can as far as project location for our field personnel.

Steve: It’s a problem we address daily. We’re always interviewing. We always have ads online, all over the region to let people know who we are, what we do, that we’re interested. People come here to stay here, so we talk to prospective employees about our retention rate. We look for people who want to come on board and stay on board. The construction industry can be volatile; there’s always movement in the industry. If employees like our company, they find a home.

At Astra, we have a deep bench; a good group of people with a wide variety of experience. The collection of experience of a lot of people working together as a team – that’s what contractors are. We put a team together to serve our clients. We also have a good history with our subcontractors; we’ve worked with them for years. That’s key to our success right now.

Ben: Anytime there’s a high demand, you’re going to be dealing with a competitive wage market. We’re seeing there are a lot of people out there willing to pay $1 more here or $1 more there to get a crew. So our ability to manage that and wage people appropriately has been a huge focus item for us and I don’t see that changing over the next few years.

Craft education is playing an increasingly important role to ensure we have the most qualified tradespeople on our projects. We have developed a craft training program and are continually expanding our industry support to promote construction as a great career,

Question: Looking ahead, do you think this trend is here to stay?

Chris: The construction industry has never done a great job of marketing itself as a qualified career – reaching out to tech schools, or even K-12 systems. Everyone wants to be in management; nobody wants to be a plumber. I think the trend will continue and in time, it will be even more difficult to find quality tradesmen. It’s a challenging situation for contractors in general, and until the country and school systems embrace construction as a solid career, it will be difficult to attract people to the business.

Steve: Short term, I think it will stay the same. In the long term, I think the shortage could start driving prices up. If the demand continues, the industry could become attractive to young people entering the workforce. They may take a second look at the construction industry.

This is why Job Order Contracting is so important. It focuses on the relationship with the facility owner. The owner knows the contractors, knows the subcontractors, and is comfortable with a proven team and proven pricing system. It works. Simply put, you have a team that’s already proven itself. This gives the owner comfort in a time when the market is tight for people.