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Worker Shortage Worsens, Survey Finds09-17-15 | News

Worker Shortage Worsens, Survey Finds
Hourly, Salaried Employees Hard to Find

A new survey compiled by the Associated General Contractors of America shows a majority of home-building firms are encountering problems hiring qualified people.

As construction activity continues to escalate, home-building companies are reportedly having a difficult time filling job slots with qualified workers, both hourly and professional.

Associated General Contractors of America surveyed building firms across the country and found the vast majority of contractors are currently experiencing this problem. This is happening as the housing industry continues to rebound in many places in the nation.

Of the 1,358 survey respondents, 86 percent said they are encountering problems filling both hourly craft and salaried professional positions. The survey was conducted in July and August.

Of the key craft positions, 73 percent said they were having a hard time finding carpenters; 65 percent said the same was true of sheet metal installers; 63 percent said they were experiencing difficulty hiring concrete workers.

In addition, 52 percent of the respondents said they are having trouble finding salaried professionals. Fifty-five percent said it was a problem hiring project managers and supervisors; 43 percent said this also applies to estimators; and 34 percent said it has been a struggle acquiring engineers.

"Few firms across the country have been immune from growing labor shortages in the construction industry," Stephen Sandherr, chief executive officer of the Associated General Contractors, said. "The sad fact is too few students are being exposed to construction careers or provided with the basic skills needed to prepare for such a career path."

AGC executives are calling for new career and technical school programs, as well as other measures, to help stem the tide of labor shortages.

As this trend grows more severe, competition for workers is heating up, Ken Simonson, chief economist for the AGC, said. Thirty-six percent of respondents have reportedly lost hourly craft workers to other construction firms, and 21 percent have seen employees leave for other industries entirely. Thirteen percent said they have lost workers to builders outside their immediate areas.

Because of this competition, 56 percent of the firms surveyed have increased their base pay rates for hourly craft workers. At the same time, 43 percent of the respondents said they have resorted to subcontractors because of tight labor conditions.

The AGC has released a report called "Preparing the Next Generation of Skilled Construction Workers" to bring more attention to this issue. Among other steps, the AGC has proposed to increase funding for vocational education and set up more vocational programs that focus on construction trades.

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The housing market might be rebounding, but the building pace for new single-family homes is at about the same level as in the early 1990s, a time when the country was mired in a recession.

As a result, housing growth isn't giving the U.S. economy much of a boost, the National Association of Realtors reports. New-home construction needs to step up production if the industry is going to have any kind of meaningful impact on the economy and job growth, the NAR said. The home-building sector has traditionally been major drivers of economic improvement, but that isn't happening yet.

Building one single-family home supports three full-time jobs for a year in construction and ancillary services, according to the National Association of Home Builders, the NAR said.

Even though new-home sales are more than 20 percent higher now than last year, the pace remains well below every year of the 1990s. Back then, the sale of new single-family homes, on average, comprised 16 percent of the sales of all single-family home annually. Last year, sales were at 9.2 percent.

"Housing analysts blame lagging new-home construction on sluggish entry-level demand," the NAR said. "Profit margins are lower on less-expensive starter homes, and many builders say the demand for starter homes isn't robust enough yet to take the risk. Also, they say the tightening of mortgage credit in the past years has crippled the new-home market."

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