Construction Trends
Construction Workforce Trends Point to Increased Risk on Construction Projects
Antony L. Sanacory
March 17, 2014
Tony Dungy once stated, “It’s not necessarily who has the most talent but what team sticks together and executes their fundamentals the best.” This success principle – executing on the fundamentals – applies unforgivingly in construction, an industry where every mistake must be corrected, every cost accounted for and every delay in work comes at significant costs. Numerous construction professionals have pointed out that executing fundamentals has become more difficult in the construction industry for a number of reasons, including contractor and subcontractor defaults, international procurement, transitions in how risks are contractually apportioned, and increasingly specialized construction materials and methods of construction, among others. And by numerous accounts, keeping a “team [that] sticks together” will become increasingly difficult too, as workforce availability problems look to be both abrupt and sustained.
Just a few days ago, Associated General Contractors (AGC) issued a release in which AGC’s chief economist stated, “While demand for construction employees is rising at a healthy clip, workers are still leaving the industry faster than they are being hired, a dynamic that may result in widespread worker shortages in the near future. . . In the past four years, nearly a million experienced workers have left the industry for jobs in other sectors, retirement or school. They are no longer available for immediate recall to construction jobs.” In the same release, AGC’s chief executive office warns “The last thing the hard-hit construction industry needs is to be unable to take advantage of increasing demand because of the decreasing supply of available workers.”
That’s one hit in workforce availability in the construction industry. But consider a more deep-rooted issue.
Lurking immediately behind a short-term workforce availability problem is a bigger issue that was highlighted in a report recently released by Zurich American Insurance Corporation on workforce trends in the construction industry. Zurich’s Don Gonzalez notes, “An aging workforce tsunami and workforce shortages are about to impact many industries in the U.S. over the next 10 years,” and the construction industry is expected to be affected by the retirement issues more severely than other industries. Citing a 2012 McGraw-Hill Report, Gonzalez notes in particular that “specialty trade contractors will experience the most significant shortage of workers.”
Risk management is a senior management level issue, not merely a project-level issue. As you plan for your companies’ future success, do not forget to include training for your home office teams as well as your craft labor. A shortage of experienced workers will likely impact every level of company and project management, and management fundamentals will become increasingly important too. As Zurich’s Gonzalez points out, knowledge transfer from experienced employees to less experienced employees will be more difficult than in years past.
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SOURCE: www.lexology.com