The future holds great promise, as technology continues to disrupt traditional norms and methods in the construction industry in general, and in the aggregates industry in particular. The future for driverless haul trucks, robotics that will replace traditional loaders, use of drones for multiple functions at quarries operations, and all manner of improvements in materials crushing and handling are on the horizon.
In the broader construction business, rapid advancements in 3D printing offer great labor reduction potential in commercial and residential building, along with driverless transportation of all types, and increasing use of robotics in many of the skills that currently require human labor.
That’s all fine, but it isn’t happening tomorrow. What are our alternatives in the meantime? Skilled labor … which is hard to find, and there really isn’t any relief in sight.
Tight Market
The Associated General Contractors of America and its talented Chief Economist Ken Simonson recently issued a report on this topic, and the outlook remains for a very tight labor market for years to come, only to be relieved in time by better workforce development initiatives and more automation throughout the construction process.
AGC conducts an annual survey called the Autodesk-AGC of America Workforce Survey, and the results show that the labor market is tighter than a year ago. Filling craft positions and some salaried positions remains as great a challenge for contractors as it was a year ago.
But at a high level, what is most telling is that construction employment continues to expand as the total number of jobs in the broader construction industry continues to climb, in contrast to all the down-in-the-mouth talk of a slowdown and even a recession: the report states that 91% of the respondents plan to hire hourly craft personnel in the next 12 months for expansion or replacement.
But four out of five stated they were having a hard time filling some hourly craft positions, the same as in 2018, and more than half said they were having a hard time filling some salaried positions, slightly higher than a year ago.
For all but one of the 20 specific craft positions listed in the survey, at least half of the respondents whose firms employ that craft said filling positions was harder than last year. For each craft, fewer than 4% of respondents said filling the position was easier than last year.
Among salaried positions, almost half the respondents said project manager/supervisor positions were harder to fill than last year, followed by about a third of the respondents replying that engineers and environmental compliance professionals were difficult. And more than two-thirds of firms had to increase base pay rates for hourly craft workers, and more than half for salaried workers because of difficulty filling positions.
Labor Supply
To tackle labor supply challenges, companies are taking the obvious steps: workforce development that includes engaging with career-building programs, utilizing more executive and hourly worker search firms, and substituting human labor with technology to automate processes to supplement worker duties. This technology includes labor-saving equipment, such as drones, robots, 3D printers, laser- or GPS-guided equipment, as well as methods to reduce onsite worktime, such as lean construction, virtual construction or offsite fabrication.
In all, the expansion in demand for construction industry positions increased in 40 states and the District of Columbia, and declined in only eight. There were also no surprises when it comes to the states that have the most robust construction industry environments, with Texas, California, Florida and Arizona leading the way.
Our industry is not asleep at the switch. Almost all of our clients are actively pursing workforce development and automation initiatives in an effort to alleviate this labor shortage, which doesn’t show any signs of easing any time soon.
About the Author
Pierre G. Villere serves as president and senior managing partner of Allen-Villere Partners, an investment banking firm with a national practice in the construction materials industry that specializes in mergers & acquisitions. He has a career spanning almost five decades, and volunteers his time to educating the industry as a regular columnist in publications and through presentations at numerous industry events. Contact Pierre via email at pvillere@allenvillere.com. Follow him on Twitter – @allenvillere.