The Role of Training in the Skilled Labor Shortage

It may surprise US builders to learn that the labor shortage that so impacts their businesses and eats into their margins is in fact a global phenomenon. Whether it’s due to workers reaching retirement (as in the UK) or a general shortage of skill trades, builders everywhere are searching for solutions to this problem.  Fortunately, some solutions are finally taking shape.


Almost three-quarters of the respondents in an Associated General Contractors of America survey stated they believed there was a skilled-labor shortage. It is perhaps most acute in specialty trades like carpenters, masons, equipment operators and pipefitters, but demand exists for all laborers.


It’s About Age

In the US, the labor market is segmented by age, and the age gap between the older “traditionalists” and the Millennials entering the trades creates its own set of problems.


Why? Aside from Baby Boomer workers (born 1946 to 1964) approaching their retirement years, the blame lies with the oil and gas industry, which drew former construction workers during and after the Recession. Tough economic conditions in general led the construction industry to hemorrhage 30% of its workers, a sizable chunk. Now that demand is returning for construction labor, that 30% gap is much more evident and impactful.


It’s Also About Growth

Today, an astounding 32% of firms surveyed have reported that the need for skilled labor will eat into their prospects for growth. Many builders, however, are looking for ways to accommodate the stretched labor market and meet their budgets. 24% of firms will incorporate prefabrication and even modularization into their game plan to reduce their dependence on skilled labor.


Other workarounds? These include increased apprenticeships and training, of course. Some suggest boosting trade schools; others insist that training must begin at the high school level, in order to identify talent at a younger age.


On-the-job training may serve as a stopgap measure while the industry reacts to the seismic shock of the post-Recession market. 42% of firms surveyed have vowed to invest more deeply in their talent, especially in terms of increased training and rewards, including promotions from within for supervisors and foremen. Reporting firms also say they’re spending up to $750 per person, annually, on training for their top contractors.