Worker shortage?

Not now, but there will be.

Here’s how to get ready for it.

Pundits peg construction unemployment between 20 and 25 percent in 2009, with little hope of it improving much in 2010. The momentum for new commercial construction projects, which wound down more slowly than other sectors of the economy, is going to need more time and investment to get back up to pre-recession speed.

But when it does, forward-looking industry watchers identify a very concerning trend: There won’t be enough workers, especially trained workers, to fill the demand.

Construction workers, who have had steady and competitive employment for several years, are now scrambling for work.

Some will be lucky enough to find employment; others will move into other occupations. But for many, it’s time to think about retirement, and as construction digs out of this downturn, more workers than ever before will be hanging up their tool belts and fewer younger workers will be entering the trades.

In the past, material shortages drove up construction costs and delayed projects; in the future, the gap between labor demand and supply could be the limiting factor on commercial and residential construction projects.

Bigger than recession

“This is not recession-related,” says Liz Elvin, senior director of Workforce Development at the Associated General Contractors (AGC). “According to Bureau of Labor Statistics’ (BLS) numbers, the average age of a construction worker in 2006 was 38.9 years. In 2009, it was 41.4 years. This is a fairly large jump in average age and indicates the construction workforce is getting older than the general population.”

From a statistical perspective, when average age increases, it means the number of older construction workers outnumber the number of younger workers coming into construction.

The BLS and the Census Bureau measure the construction workforce differently, so their statistics don’t necessarily jibe. However, both sources indicate that fewer people 20 through 40 years of age are entering the workforce as more people 41 through 60 years of age get closer to the golden age of retirement.

“We have been talking about a skilled labor shortage in construction for years,” says Bob Piper, vice president of Industry Relations at Associated Builders and Contractors (ABC). Formerly an electrical contractor, Piper says he sees baby boomers beginning to “hang it up” because their aging bodies can’t take the rigors of the frontline construction work. “As they depart the work force, lots of knowledge and skill will go out the door with them,” he says.

However, the baby boomer mass exodus from construction may be protracted. Many are looking at their retirement funds and find they need to somehow continue working because their savings have been hit hard by stock market swings. Still others, with health issues, can’t afford health insurance plans on their own, so they will continue to work past 60, and in some cases, 70 years of age so they can get coverage, Piper predicts.

Construction is not alone in this coming labor shortage. Other labor-intensive fields, such as health care, predict severe shortages of skilled caregivers, says Piper. “We will all be competing for a part of a smaller work force,” he says.

Survival strategies

While the first order of business in today’s construction economy is to survive this downturn, the second order of business should be to adapt for long-term sustainability. The industry experts offer some short- and long-term solutions:

Don’t ignore the problem. It’s coming, says Piper, and looking at it objectively and proactively will help solve it.

Promote construction as a viable, promising career path for young adults. “How many other occupations offer the opportunity for a worker to start as a laborer and end up a business owner?” says Piper.

The experts advise contractors to help associations reach out to children and teenagers so they have a greater awareness of construction as a viable career path. For example, the AGC has developed a “Build Up” program that helps acquaint and enthuse fifth grade students about the opportunities in construction. It has had several contractors sponsor the program in their local schools.

Piper also notes that as school budgets get squeezed, vocational programs often get hit. In the name of preparing the workforce for the 21st century, shop classes get replaced with computer labs.

This prevents students from experiencing the challenges and sense of accomplishment of shop projects, and doesn’t allow some students to explore an occupational option that may better fit their aptitudes.

“We are seeing some companies and associations offer trade scholarships and are working with schools and guidance counselors to understand that apprenticeship is the ‘other fouryear degree’,” says Piper.

“We have seen many AGC members get involved with charter schools, and many have used booths at state fairs and other exhibitions to reach out to the high school-age children,” adds Elvin.

Invest in current employees. That investment comes back as greater loyalty when the market does return. Plus, training and other opportunities result in more efficient employees whose efforts can greatly affect the bottom line, says Elvin.

Offer experienced employees flexibility. Elvin says many older employees would rather work part-time or act as a mentor to younger employees, helping them learn the tricks of the trades. While they may not be able to be on the front line of the labor pool, their advice and expertise can help younger workers be more efficient and safe in their work.

Leverage technology. With fewer workers, one part of the solution is to help workers accomplish more.

“Today’s technology can help one worker completely survey a jobsite with a laptop computer and a GPS unit that in the past would have taken two or three workers,” says Elvin.

Similarly, Piper suggests offering virtual training opportunities that allow apprentices to be more flexible in completing assignments and learning their chosen trade. “Online training allows students more flexibility to complete coursework without the commute. It makes training more flexible, and they can proceed at their own rate,” says Piper.

Look where others don’t or won’t. That’s the recommendation of Matt Stevens, president of Stevens Construction Institute and author of the books, Managing a Construction Firm on Just 24 hours a Day and the recently released Practical Construction MBA.

“Those with learning disabilities can often excel at jobs that have repetitive processes. You can also find good workers among those who may have been incarcerated for nonviolent crimes. Many times, they only need another opportunity to get their lives back on track and will be good, dependable workers,” he says. Immigrants, who have been masters of various trade and craft jobs for generations, can still fill these roles, although more attention must be paid to assuring they are documented aliens and working toward citizenship. “You will have to work closely with them to bridge any communication gaps,” he adds.

Hire more than “warm bodies.” Stevens suggests the hiring process must be more strategic. Develop ways to identify candidates with a good safety-first attitude, have a propensity to do steady, accurate work, and are loyal. “Our research shows if employees have these traits, they are good, lower-maintenance employees. Many times, such employees can be found through social religious or church groups or in organizations with ties to farming,” he says.

Use lean construction practices and building information modeling. “These practices can help take the inefficiencies out of construction,” Elvin says.

Be self-reliant. In any successful business, it’s the effort that’s put into it that yields the results, says Stevens. “Trade associations do a great job, but it’s really up to individual contractors to find the employees. Don’t try one thing; try many tactics and measure the results of each effort, then fine-tune the effort for better results,” he says.

The law of supply and demand will fix the problem. “A worker shortage will drive up wages and that will attract new workers in the long term,” says Stevens. “The important thing is that the higher wages must be balanced by increased productivity. It is always worth it to pay more for highly productive craftsmen, and that gets back to continuing training, even in market downturns.”