4. 29% of firms are offering bonuses and incentives<\/span><\/h4>\n(Source: AGC – The Construction Association)\u00a0<\/span><\/i><\/p>\nThe number of unfilled positions and the difficulty filling them has had a positive knock-on effect in the way construction firms view the recruitment process. In order to combat the construction labor shortage issue, 66% of construction firms have increased base rates.\u00a0<\/span><\/p>\nFirms are generous in their attempts to combat the <\/span>construction worker shortage<\/span>. In addition to higher pay, 29% of firms offered bonuses and incentives to construction workers, while 25% of firms increased their overall portion of benefit contributions.\u00a0\u00a0<\/span><\/p>\n5. The effects: 44% of firms are raising prices, taking more time to complete projects\u00a0<\/span><\/h4>\n(Source: Fox Business)\u00a0<\/span><\/i><\/p>\nDue to the shortage of construction laborers, 44% of construction firms are not only taking longer to complete projects but are also increasing their prices submitted for bids and contracts.\u00a0<\/span><\/p>\nWhich brings us to our next section: what are the challenges and consequences caused by the construction labor shortage?\u00a0\u00a0<\/span>[\/vc_column_text][vc_single_image image=”2355″ img_size=”large” alignment=”center”][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Challenges and Consequences Caused by the Construction Labor Shortage” font_container=”tag:h3|text_align:center” use_theme_fonts=”yes”][vc_column_text]As you can see, the construction labor shortage is a real situation that has far-reaching effects. Let’s take a look at some of the prominent challenges and consequences caused by the shortage & who are impacted by them.\u00a0<\/span><\/p>\n6. 43% of construction companies are concerned about the cost of skilled labor while 49% have to turn projects away\u00a0<\/span><\/h4>\n(Source: US Chamber of Commerce)\u00a0<\/span><\/i><\/p>\nPerhaps the group that feels the pinch of these <\/span>skilled labor shortage statistics <\/span>more than any other party are the construction companies. 43% of construction contractors are highly concerned about the rising cost of skilled labor.\u00a0<\/span><\/p>\nAnother detrimental effect of the labor shortage is that 49% of construction companies are unable to meet the growing demand and are forced to turn down opportunities.\u00a0 <\/span>\u00a0<\/span><\/p>\n7. Jobsite safety is impacted – say 80% of contractors\u00a0<\/span><\/h4>\n(Source: US Chamber of Commerce)\u00a0<\/span><\/i><\/p>\n80% of contractors state that job site safety is impacted by the skilled labor shortage. Fears of declining job-site safety are becoming more evident.\u00a0<\/span><\/p>\nThis fear stems from skilled labor shortages, shorter construction schedules, the complexity of projects, aging workforce, language barriers, and the usage of opioids & other addictive substances on job sites.<\/span>\u00a0\u00a0<\/span><\/p>\n8. 81% of construction firms ask workers to do more work\u00a0<\/span><\/h4>\n(Source: US Chamber of Commerce)\u00a0<\/span><\/i><\/p>\nOne of the significant effects of the skilled labor shortage is that 81% of firms ask their workers to do more work. While this is a positive effect in terms of overtime earned, the negative effects far outweigh this positive.\u00a0<\/span><\/p>\nWorkers are at risk of being overworked, and the overall employee experience can be jeopardized. In addition to this, working excessive amounts of overtime increases the risk of:<\/span><\/p>\n\n- High blood pressure<\/span><\/li>\n
- Back injuries<\/span><\/li>\n
- Mental health issues<\/span><\/li>\n
- Alcoholism<\/span><\/li>\n<\/ul>\n
9. Construction costs have increased by 5.16%\u00a0<\/span><\/h4>\n(Source: Turner Construction)\u00a0<\/span><\/i><\/p>\nSince the third quarter of 2018, the cost of construction has risen by 5.16%. While this substantial price increase is mostly a result of the labor shortage, the rising cost of materials is also a contributor.<\/span><\/p>\n52% of contractors believe that they will spend more on tools, materials, and equipment needed to complete jobs on time successfully.\u00a0<\/span><\/p>\nSpeaking of time:<\/span>\u00a0<\/span><\/p>\n10. 71% of contractors have difficulty meeting schedule requirements<\/span><\/h4>\n(Source: US Chamber of Commerce)\u00a0<\/span><\/i><\/p>\nA whopping 71% of all contractors struggle to stick to deadlines. In the cases of larger companies, in particular, this percentage increases to 76%.\u00a0\u00a0<\/span><\/p>\nFailure to meet schedule requirements results in a lower level of customer satisfaction and negatively impacts the bottom line of construction companies. After all, time is money, right?<\/span>[\/vc_column_text][vc_single_image image=”2356″ img_size=”large” alignment=”center”][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Construction Labor Shortage: Solutions and Measures Taken” font_container=”tag:h3|text_align:center” use_theme_fonts=”yes”][vc_column_text]So what is being done to fight against the construction labor shortage?\u00a0 Here are some insights as to the solutions and measures the construction industry is taking.\u00a0<\/span><\/p>\n11. Construction technology startup funding surged by 324%<\/span><\/h4>\n(<\/span>Source: Tech Crunch<\/span><\/i>)<\/span><\/p>\nStartups are helping construction companies see the light at the end of the labor shortage tunnel by developing innovative new technology. In 2017, funding for construction technology startups amounted to $731 million, and by 2018 that figure had exceeded the $3 billion mark.\u00a0\u00a0<\/span><\/p>\n29% of firms are investing in technology that aims to supplement laborers’ duties by automating processes.\u00a0<\/span><\/p>\n12. AI for the construction industry forecast to reach $4.51 billion by 2026\u00a0\u00a0\u00a0<\/span><\/h4>\n(<\/span>Source: Reports and Data<\/span><\/i>)<\/span><\/p>\nThe construction industry is seeing the value of AI and how it can help them maneuver these tough times. AI for construction is forecast to reach $4.51 billion in the next few years.<\/span><\/p>\nWho knows, with more companies introducing AI technology to lighten the load of labor shortages may be more millennials will be tempted to join the construction industry after all.\u00a0\u00a0<\/span><\/p>\n13. 24% of construction firms are investing in labor-saving machinery\u00a0<\/span><\/h4>\n(<\/span>Source: AGC – The Construction Association<\/span><\/i>)<\/span><\/p>\n24% of construction firms are investing in labor-saving machinery and equipment. Examples of machinery include GPS-guided equipment such as excavators, 3D printers, and grading machines.\u00a0\u00a0\u00a0<\/span><\/p>\n14. Off-site construction can demonstrate savings of $20 billion per year<\/span><\/h4>\n(<\/span>Source: McKinsey <\/span><\/i>)<\/span><\/p>\nPreliminary findings indicate that construction companies can save up to $20 billion per year with off-site construction. In addition to the financial savings, off-site construction can cut schedule time by 20% – 50% as well as reduce a project\u2019s <\/span>construction labor costs<\/span> by up to 25%.\u00a0\u00a0<\/span><\/p>\nIn spite of these promising statistics, only 23% of construction firms have reduced onsite work time.\u00a0<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_custom_heading text=”Reasons for the Construction Labor Shortage” font_container=”tag:h3|text_align:center” use_theme_fonts=”yes”][vc_column_text]Now that we know all about the <\/span>construction labor shortage statistics<\/span> that pose a threat to our nation’s development and economy, it\u2019s time to look back. Why is America in a construction labor shortage?\u00a0<\/span><\/p>\n15. Millennials make up 35% of the global workforce: and they don\u2019t want to work in construction\u00a0<\/span><\/h4>\n(Source: Statista)\u00a0<\/span><\/i><\/p>\nAt the moment, 35% of the global workforce is comprised of millennials. This number is forecasted to rise to 70% by 2020. A mere 6% of the workforce is made up of boomers. The remainder of the workforce is made up of 35% Generation X\u2019s and 24% members of Generation Z.\u00a0<\/span><\/p>\nFactors contributing to millennials\u2019 lack of interest in joining the construction industry are varied. From the unflattering portrayal of blue-collar workers in the media to the seemingly unattractive work culture and lack of career growth opportunities, millennials aren\u2019t keen on solving the skilled worker shortage.\u00a0<\/span><\/p>\n16. 10,000 boomers are retiring daily\u00a0<\/span><\/h4>\n(Source: Investopedia)\u00a0<\/span><\/i><\/p>\nAn estimated 10,000 baby boomers are retiring per day. The construction industry has over 1.8 million baby boomer employees who are aged 55 to 64 years.\u00a0<\/span><\/p>\nThe baby boomer retirement is sparking fears that the construction labor shortage will only worsen. Not only does this mean that the number of skilled workers will decrease, but a decline in management and leadership positions will likely ensue.\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n17. 2 million construction jobs were lost during the recession\u00a0<\/span><\/h4>\n(Source: AGC – The Construction Association)\u00a0<\/span><\/i><\/p>\nDuring the Great Recession, more than 2 million construction workers were laid off. This brings about the question: whatever happened to those people and why aren’t they filling the available jobs?<\/span><\/p>\nThe answer to this is mostly speculation. Logic dictates that upon being laid-off construction workers had to seek employment in other industries, or hung up their tool belt if they were near retirement age anyway. The recession is a leading contributor to the <\/span>construction worker shortage<\/span> of today.\u00a0<\/span><\/p>\n18. 30.7% of laborers are Hispanic or Latino: thus a language barrier is formed<\/span><\/h4>\n(Source: Bureau of Labor Statistics)\u00a0<\/span><\/i><\/p>\nWhen we consider that 30.7% of the 11 million people employed in the construction industry are made up of Hispanic or Latino people, it is easy to understand how a language barrier might present itself.<\/span><\/p>\nThe language barrier can lead to the misunderstanding of instructions and increased risk of injury thanks to safety materials only being published in the English language.\u00a0\u00a0\u00a0<\/span><\/p>\n