When talk of labor shortages has been floated in the past, it has often been customary for those sounding the alarm to be accused of “crying wolf”. But the evidence is rolling in from around the nation – and the world, really – that the problem is as real as it's ever been and it will only intensify if current trends hold. There are some industry leaders, however, who are figuring out ways to combat these workforce issues in ways designed to keep their businesses out of a position like this again in the future.
Houston Public Radio recently quoted AGC of America Chief Economist and Construction Citizen Blogger Ken Simonson, who told the station that the oil and gas sector is driving most of Texas’s new construction activity:
“The drilling itself counts as mining, but every one of those well sites requires some kind of site preparation, a storage pond, housing for the pumping and processing machinery. We’re also seeing a lot of rail construction to bring natural gas liquids or oil from the fields to the refineries.”
That activity in the oil and gas sector sets up a fierce competition for the folks in commercial construction. One of our resident experts, Pat Kiley, has repeatedly pointed out there is a real war for talent in this environment. The same kind of guy who might go to work in the oil and gas sector is the ideal craft worker in commercial construction: someone who's bright and good with his hands and appreciates an honest day's work for an honest day's pay. The competition isn't just oil and gas. As Pat wrote:
“Now comes the manufacturing industry, enjoying an American resurgence as the result of shale gas, which makes both their energy and feedstock costs much more advantageous to be here in the United States. Combine this fact with the relative parity in labor rates due to American productivity gains, and the much better intellectual property protection under American law, and all of a sudden manufacturers are both re-shoring existing overseas jobs and creating new ones here. They, too, are after that same person we need, and in large supply.”
In other parts of the country, like Florida for example, the challenges are just as pronounced. The Tampa Bay Times reports that Hernando County is seeing huge shifts in its labor market:
“‘Finding experienced tradespeople even willing to do the job can be frustrating’, said John Cavalier, owner of Professional Construction Specialist Inc. of Hudson. At the height of the building boom, his framing business staffed six full-time crews that completed an average of one home per day in Hernando, Pasco and Citrus counties. Now, he just has two crews. ‘During the boom, you could put a want ad in the paper and you'd get a dozen responses from people who knew how to do the job,’ Cavalier said. ‘These days, I'm lucky if one out of 12 has the experience I'm looking for.’
“Cavalier said he doesn't believe wages are the problem. In fact, an experienced carpenter can earn upward of $16 an hour, which is competitive with many construction markets. Still, the trades shortage seems to center on a lack of people who want to make a living in the construction industry, said Hernando County contractor Dudley Hampton.”
The Coloradoan also showcased the problem in a fantastic long read in which the paper pointed out that many construction firms have had to go back into “teaching mode” when it comes to training a workforce for the future. From the piece:
“‘There’s a huge shortage of skilled labor in Northern Colorado and in other areas of the United States, as well,’ said Bob Peterson, the owner and president of Fort Collins-based Associates in Building & Design and the future 2014 chairman of the Northern Colorado Home Builders Association Board of Directors. According to Peterson, one of the main reasons for the workforce decrease was the lack of demand for laborers during the economy’s downturn in 2009. ‘I could say there were over 800,000 construction industry jobs lost during the recession, so a lot of those people switched jobs,’ Peterson said. ‘We’re frankly back in teaching mode, which is OK,’ he said, adding that people entering the workforce need to be properly trained and have the right skills. ‘...We have got to create that skilled labor model until either some of those people come back or we get enough people entering the skilled labor force. The unfortunate result right now is that costs go up.’”
Back here in Texas, the state legislature has made sweeping changes to the way students can earn a diploma. Those reforms are designed to make sure that students are not only college ready but career ready as well with an emphasis on the skilled trades for many of them.
Business leaders in Houston are pioneering a system of holding construction companies accountable for a sustainable workforce going forward and getting project owners to buy into that idea through the Construction Career Collaborative (C3). Just this past week, C3 Chairman Jim Stevenson told us the initiative is moving forward in several ways, including the end of the beta phase on several projects and the naming of the organization’s new Executive Director Chuck Gremillion. The Construction Citizen team will continue to track the progress of this initiative.
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