Construction Firms to Increase Headcounts, Look for More Skilled Labor

The Associated General Contractors’ 2017 business outlook report sums up the paradox facing construction firms as optimism builds for strong demand in public and private sectors.: Seventy-three percent of the nearly 1,300 construction firms from 49 states and the District of Columbia that it polled report a hard time finding qualified workers. Labor conditions will remain tigh:

One reason many firms expect to make only slight increases to their headcounts is that they appreciate how difficult it will be to find enough qualified workers to hire. Indeed, 73 percent of firms report they are having a hard time finding qualified workers. And 76 percent of respondents predict that labor conditions will remain tight, or get worse, during the next 12 months.

Most firms report they are increasing pay and/or benefits to retain or recruit qualified staff to deal with worker shortages. Fifty-two percent report they have increased base pay rates, 35 percent report they are providing incentives and/or bonuses and 28 percent report they have increased contributions to employee benefits. Even as firms increase compensation, 52 percent report they plan to increase their investments in training and development in 2017 compared to 2016.

“Contractors remain quite concerned about labor shortages, tight margins and growing costs,” said Ken Simonson, the association’s chief economist. “In particular, as additional older workers reach retirement age, firms will struggle to find qualified workers to replace them.”

In addition to coping with worker shortages, contractors are also worried about the continued increase in health care and regulatory compliance costs. Eighty-four percent of firms report the cost of providing healthcare for their employees increased in 2016 while 82 percent expect their healthcare costs will increase in 2017.  And 41 percent of firms report they are worried about the growth in federal regulations.

This is an opportunity for the AGC and other contractor associations to step up on funding more training programs for 21st Century construction — which would take into account construction tech and automation that is already finding its way into some types of repetitive tasks on jobsites. Not to say contractors aren’t partnering with skilled trade groups so that training and skillsets meet construction demand. The  Carpenter-Contractor Trust in New Jersey is one example of this. But overall, contractor-supported training of skilled trades for building is an opportunity to make up for the Vocational-Technical schools gaps that have widened in the past two decades across the U.S.