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America desperately needs 1 million more construction workers

Jul 8, 2021, 7:19 AM
Construction workers pour concrete into a median along Larimer County Road 5 near Windsor, Colo. on...
Construction workers pour concrete into a median along Larimer County Road 5 near Windsor, Colo. on Friday, July 2, 2021. 070221 Construction 04 Bb

    (CNN) — Matthew Messer hauls solar panels on the roof of a home in Long Island, New York, hoisting them one by one in the 100-degree June heat. Messer is the owner of New York Solar Maintenance, but these days he’s working right alongside his lead technician seven days a week as business booms.

“This is not the perfect way to be spending my time right now,” Messer says of his days spent up on roofs. “But it’s what needs to happen.”

That’s because Messer says he can’t find anyone to hire. His small business has three open roles, ranging from entry level to lead technician — one example of an industry-wide problem as a labor shortage meets increased demand.

New home construction and improvement are surging, thanks to the lack of inventory in a red-hot housing market and more people working from home. In an industry already short on workers before the pandemic, construction businesses will need to hire 430,000 workers this year and 1 million more over the next two years in order to keep up, according to Associated Builders and Contractors.

“The phone is ringing off the hook,” Messer said. “I am expanding as quickly as I can, but right now that’s governed by the amount of skilled technicians I can bring on.”

The construction industry shut down for a few months last year during the pandemic — but was quickly deemed essential, allowing paused projects to continue. But in that short time, the sector lost more than 1 million workers. The industry has recouped nearly 80% of its workforce since then, but is still down 238,000 workers from pre-pandemic levels as of June, according to the Labor Department.

“We’re losing more people than we’re bringing into the industry,” said Matthew Schimenti, owner of Schimenti Construction Company. “People made decisions in their lives to leave the region and the industry [during the pandemic]. It was like putting a puzzle back together to restart where we literally called a timeout.”

Schimenti Construction — which primarily works on commercial projects — has 20 open positions across all skill levels. They’ve even hired two internal recruiters just to look for talent. Commercial construction remained largely flat during the pandemic, but it’s expected to pick up as the US economy returns to pre-pandemic norms.

“If we wished it was just a bad dream and it would go away and everybody would just come back— that’s not going to happen,” Schimenti said.

Pay is not the issue

When Matthew Messer started noticing a shortage of workers, he realized he quickly had to raise wages to remain competitive. His remaining employees were being poached by other companies. In the last four months, he’s raised entry level wages by 40%. That’s on top of rising costs of materials including steel and wood which he says get passed down to the customer.

“I was offering $18-$22 an hour and I got no applications. I increased it to $23 and I got none. I increased it to $25 and they’re starting to trickle in right now,” said Messer. “It was a dramatic increase, but in order to grow the business, I need technicians.”

But unlike other industries facing labor shortages, such as restaurants and hospitality, construction pays nearly double the average hourly rate. A restaurant or hotel worker can make $18.23 per hour on average, compared to $32.86 an hour for a construction worker, according to the Bureau of Labor Statistics.

“You can earn a great living while you learn. If you have the desire to learn multiple crafts, we’ll teach you multiple crafts,” said Michael Bellman, President and CEO of Associated Builders and Contractors. “Our members invested $1.3 billion last year in upskilling their existing workforce.”

Lack of shop classes and an aging population

Shop classes — once embedded in the curriculum at schools across the country — are now few and far between. Those classes had often been a student’s first introduction to a power tool or tape measure, and an important feeder into construction work. The lack of shop classes has made it harder for the industry to attract and recruit young talent, according to Bellman. That, plus an aging construction workforce — the average age is 43 — has created a hole in employment.

“We want to go out to every area where we can attract top talent. Once we get them into the industry, we’re educating and upskilling,” Bellman said.

Teaching new skills at no additional cost to workers is geared toward retention. In the last decade, the average monthly turnover rate in construction has been 5.2%, compared to 3.6% for all industries, according to the Bureau of Labor Statistics. And until workforce numbers meet demand companies will increasingly look to technology to replace open positions.

“The industry is using technology and innovation to basically handle this disruption with regards to the labor shortage. A lot of use of drones, robotics, and additive manufacturing,” Bellman said. “That though, creates new career opportunities in those innovation and technology spaces. And that’s very attractive to the younger generation.”

— Kate Trafecante contributed to this report

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America desperately needs 1 million more construction workers