WORKFORCE SURVEY: Simply not Enough Workers to Keep Up with the Growing Demand

By Jerry Marks, TriAd Marketing & Media

Ohio hired 5th-most Construction Workers of Any State in 2023

Heavy construction is an industry historically hampered by workforce shortages. However, despite recent initiatives to improve workforce levels there are current factors making it difficult for the industry to change that history.

Current projections have the U.S. construction industry needing well more than a half-million additional workers to return to “normal” labor levels – a number proportional to the combined populations of Ohio’s third-, fourth- and fifth-largest cities (Toledo, Akron and Dayton). Heavy-construction industry leaders, however, are quick to point out that when it comes to workforce shortages, these aren’t normal times.

In addition to having to fill the pending voids of retirement-age workers, where nearly one-in-five construction employees is 55 years or older, contractors are needing additional help to handle the influx of construction work due to historically high infrastructure funding.

CNBC news outlet lists several factors for why the construction industry needs personnel, stating, “There are simply not enough workers to keep up with the growing demand … What’s more, with the passage of Biden’s infrastructure bill, American municipalities have large sums of money to invest in the revitalization of their buildings, but no one to perform said revitalization.”

President Biden’s infrastructure bill, the Infrastructure Investment & Jobs Act (IIJA), is a financial shot in the arm for transportation and infrastructure projects. Ohio is projected to receive approximately $10 billion in federal highway formula funding and an additional $3 billion for safety and public transportation projects through Fiscal Year 2026 – along with additional funding opportunities through federal grant programs. According to a report by the Associated General Contractors of America (AGC) and Procore Technologies Inc., the increased funding levels are exasperating the industry’s need for workers, as the study shows 78% of U.S. civil and infrastructure construction firms expect project backlogs to increase “as new federal infrastructure funding ramps up.”

According to CNBC, the IIJA helped magnify the industry’s workforce issue because while money was allocated for updating the nation’s infrastructure, no money was allotted for enticing and training new construction workers.

For Ohio’s construction industry the demand for new employment goes beyond IIJA funding, as it is also seeing additional work as a result of more transportation revenue being recently generated through the state’s motorfuel user-fee increase in 2019; the post-pandemic recovery; and private investment that has spurred the building of major projects throughout the state.

Workforce is Growing, But Not Growing Enough

Similar incentives are driving the need for a larger construction workforce nationwide. Axios reports the U.S. added 16,000 construction jobs each month in 2023, which was 5,000 more per month than prior to the pandemic in 2019. According to AGC statistics, Ohio hired the fifth-most construction workers of any state from November 2022-November 2023, with more than 10,500.

Still, the need for more construction workers remains.

The construction industry’s continual labor shortage was at the center of AGC’s 2023 Workforce Survey. The annual survey, which was conducted in July and August 2023 and announced last fall, is aimed toward measuring “the state of construction workforce shortages, better understand why those shortages exist, assess the impact of labor shortages on construction projects and learn what firms are doing to cope with and/or overcome those shortages.”

94% of Construction Firms Need Workers

The major finding of the Workforce Survey is that, nationally, 94% of contracting firms involved in highway and transportation construction are looking for workers, and 91% of those companies are having difficulties filling those positions. Ohio mirrored those national percentages, as 85% of the state’s respondents reported having employment needs in 2023 – with 94% stating “we are having a hard time filling some or all positions.”

According to AGC, the difficulty in finding workers is affecting the entire construction industry. “All types of firms are experiencing these challenges,” the Workforce Survey’s summary states, which goes for “exclusively union craft labor … firms that operate as open-shop employers … firms with $50 million or less in annual revenue … ones with more than $500 million in revenue; … companies in all four regions of the country; and by contractors doing building construction, highway and transportation projects, federal and heavy work, or utility infrastructure.”

Besides the aforementioned range of construction firms having trouble filling employment voids, Ohio’s survey respondents said they were having difficulties hiring both hourly craft and salaried positions. Among the top hourly craft positions in Ohio to fill were electricians, iron workers, pipefitters/ welders, carpenters and concrete workers. The top salaried positions Ohio firms were having difficulties filling were environmental compliance, lean construction and software/database personnel, project superintendents and project managers/supervisors.

These employment troubles are affecting productivity on the project site. Nationally, according to the AGC Workforce Survey, 61% of the delays nationally in highway and transportation projects are due to a shortage of workers. In Ohio, 70% of survey respondents said a lack of adequate workforce levels are leading to delays.

Is it Numbers, Training or Generational? ‘Yes’

Reasons are far ranging for why contractors are having difficulty filling job openings. According to AGC Chief Economist Ken Simonson, these reasons include candidates not being qualified to work in the industry and/or not able to pass a drug test.

Here is a look at the highway/ transportation construction portion of AGC’s 2023 Workforce Survey for the top reasons why employers are having difficulty filling available positions:

• 73% Candidates are not qualified to work in the industry
• 49% Potential employees cannot pass a drug test
• 33% Potential employees report difficulty acquiring reliable transportation to and from a jobsite
• 31% Potential employees report needing flexible work schedules/option for remote work

AGC’s survey analysis said many respondents in the study “noted that applicants will accept positions but never show up to work. Others talk about employees who are incapable of arriving on time, or who report to work only erratically. Many also focus on the fact candidates who have no skills expect to be compensated as if they did.”

It can be argued that the willingness to enter physical, blue-collar work is leaving with the retiring population of Baby Boomers. In a Fox Business article, Aidan Madigan-Curtis, a partner at venture capital firm Eclipse, said, “The problem that we’re facing today is that a lot of the workforce that’s been engaged in those roles is retiring and we’re not replenishing the workforce with new recruits … The Millennial and Gen Z generations – they kind of grew up with a different idea of what was well-paying and what was a very meaningful job.”

AGC Vice President of Public Affairs & Strategic Initiatives Brian Turmail believes this shift in the nation’s work culture has led to the construction industry’s attractiveness to younger generations. “It’s cultural,” he said. “… For the last 40 years, we’ve been preaching a message nationally that the only path to success in life lies through a four-year college degree (and to work) in some kind of an office.”

In a Construction Dive opinion piece, “3 Reasons Why New Tradespeople Don’t Stick Around,” Fulton Cure, a quality control manager for a Dallas construction firm, believes reasons for why new employees not sticking around are: impatience for training; the work is dirty and tiring; and having to deal with difficult managers.

Regarding impatience in training, Cure said that goes for both the new employee and employer. “Training new talent takes time,” he wrote, adding that contractors often don’t want to take the time to properly train new people, which leads to frustration for both parties. “But if you set a training regimen in place and find someone who is good at dealing with others, training new hires can be something extremely beneficial to any contractor.”

Through his work as a laborer, foreman and maintenance crew leader, Cure knows first-hand that blue-collar work is physical and exhausting. “I often did not smell good,” he wrote. “But when I saw my paycheck … it looked a lot better than my friends’ who had to wear slacks and a tie every day. And now, my favorite game to play while driving around with my wife is pointing out everything I had a hand in building … It’s good to see the fruits of my labor. Blue-collar work is extremely rewarding.”

Cure believes everyone who has worked has a story of a terrible boss or coworker. “Working for a bad boss can make anyone hate their job,” he wrote. “If GCs can understand the overall need for younger – or newer – tradespeople in the industry, and help make it a more enjoyable environment, I guarantee we would see a lot more retainage and interest in the industry.

“… Let’s get excited about training new people, welcome them to the industry and show them how rewarding the trades can be,” Cure adds.

Changing With the Times

To the construction industry’s credit, employers have expanded their methods of attracting, hiring, training, scheduling and benefits being offered to job candidates and employees.

According to the AGC Workforce Survey’s results, here are the top things highway/ transportation construction companies are doing in getting the word out about job openings (with national/Ohio response percentages):

• Adding online strategies – such as social media, targeted digital advertising – to connect better with younger applicants 69%/70%
• Engaging with career-building programs – such as high schools, colleges and career/technical education centers 57%/70%
• Engaging with government workforce development or unemployment agencies 34%/30%
• Working with executive & non-craft worker search firms or professional employer organizations 33%/35%

Regarding the construction industry getting involved in career-building programs, Turmail said, “Firms are realizing that no one’s gonna solve the (workforce recruiting) problems but themselves. So, they’re building strong relationships with high school programs, even middle school programs. They’re finding ways to get students out to the construction jobsites to expose them to career opportunities.”

Among Ohio’ survey respondents, construction companies are also soliciting candidates about job opportunities by contacting unions (40%) and implementing software to distribute job postings and manage applicants (35%).

According to AGC’s survey analysis, “Contractors are also increasing investments in their internal training programs in an effort to address the fact many candidates lack the basic hard and soft skills needed to be successful.” This increased investment has been spent on training and professional development by enhancing the companies’ online and video training and using virtual reality technology to train employees.”

National and Ohio survey respondents are in agreement in the top ways construction firms have changed hiring, training and scheduling practices in the past year (national/Ohio response percentages):

• Initiated or increased spending on training and professional development 45%/45%

• Lowered hiring standards – in areas such as education, training, employment and arrest records 38%/32%

• Increased use of learning program with strong online/video component – through classes using Zoom, Teams, etc. 27%/28%

Contractors both nationally and in Ohio were also in agreement, according to the survey responses, when it comes to how firms in the past year have adjusted pay and/or benefits for salaried and hourly craft personnel (national/Ohio response percentages):

• Increased pay rates 86%/75%

• Provided incentives/bonuses 52%/52%

• Increased company portion of benefit contributions and/or improved employee benefits 31%/20%

“They’re making more money. It’s a workers’ market,” Turmail said. “The construction industry is now paying 80% more than the average non-farm job in the United States.”

Marcum LLP Chief Construction Economist Anirban Basu spoke of the construction industry’s increased pay rates in the face of its workforce woes. “Since the start of 2022,” he said, “average hourly earnings for construction workers have risen at a faster rate than wages across all industries … That dynamic should persist in 2024, as elevated demand for construction services, especially in certain areas and segments, bolsters the demand for labor.”

In addition to continuing the recent methods being used in recruiting workers to the construction industry, national leaders are saying not to ignore the readily available untapped resources – such as women and immigrants. Regarding the 50.4% of the population already in the U.S., Turmail said in the CNBC article, “Construction is fighting workforce shortages with one hand tied behind its back. Women are half the (nation’s) workforce, and yet they’re somewhere around 6% to 7% of the craft workforce – the men and women who actually do the construction work in the hardhats and the boots … If we can find a way to increase those percentages, we won’t be talking about labor shortages.”

The biggest takeaway, according to AGC, from its 11th Workforce Survey is how much the nation is failing to prepare future workers for high-paying careers in fields like construction. “If there is a silver lining in this year’s survey results, it is that there are people who want to work in construction. We just need to do a better job as a nation preparing them for the many high-paying career opportunities that exist in the industry …”

The 2023 AGC Workforce Survey can be viewed in its entirety at www.agc.org/news/surveys.