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As Skilled Worker Ranks Shrink, Construction Industry Turning More to Offsite Construction


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Construction activity has bounced back significantly since the dark days of the Great Recession, but the number of skilled workers in the industry has shrunk by 100,000 since then. With a lack of up-and-coming young professionals training to take their place, contractors and developers are grappling with this ongoing worker shortfall, and are facing the pressure of expecting to do more with considerably less help.

Ever-present scheduling and budgetary concerns exert persistent pressure on a construction company’s bottom line, and so, the need to operate more efficiently and with a leaner crew, has contractors and developers showing increased interest in offsite construction for houses, schools, and even hospitals.

As the name suggests, offsite construction entails building elements designed and fabricated somewhere other than where the structure will be ultimately placed. It essentially amounts to a factory production line dedicated solely to pre-assembling building elements, using the same materials as traditional construction projects. The controlled environment and not being exposed to the elements is good for worker safety, and the ability to work day or night, blizzard or hail storm, means more usable hours per day. 

It also slashes the number of workers needed to complete a project, freeing them up for other projects, giving contractors and developers more bang for their labor buck. Lad Dawson, founder and director of Guerdon Modular Buildings told Construction Dive that offsite construction could reduce the amount of necessary onsite labor by 40-60%.

The method is really gaining traction among corporations with a slate of projects that need to be completed quickly. 

The method is really gaining traction among corporations with a slate of projects that need to be completed quickly. A UK builder has been contracted to design and build several McDonald’s stores in central England. The time from groundbreaking to open for business? Four weeks.

This blistering speed has also been put to use in metropolitan areas with rapidly growing populations. The San Francisco Bay Area has seen a dramatic upswing in population, especially among young workers in the tech sector. Companies like Google are contracting with modular builders to quickly put up temporary housing for its workers, recently buying 300 such homes from a Vallejo, California-based company.

It’s commonly been the perception that offsite-constructed or prefabricated buildings have inevitably sacrificed style or personality in the name of functionality. However, tools like BIM digital prototyping now allow teams to work together using a highly collaborative 3D model. This also lets designers put a creative spin on things and see if their ideas would actually work before trying it live on the project. 

Some research says embracing offsite construction can help Americans struggling with housing costs, as the U.S. remains in the throes of an affordable housing shortage. The Terner Center for Housing Innovation at UC Berkeley points to a recent McKinsey & Company report that essentially called out the construction industry for being behind the times when it comes to innovation. The report says reliance on inefficient construction practices has contributed to the rising cost of housing. The Terner Center posits that by more broadly adopting offsite construction and building more houses with the method, home and rent prices will become more affordable. They’ve even since released a new report that goes in depth about offsite construction’s cost and time savings and other benefits as well as some key reasons it hasn’t taken off at scale yet.

Another bellwether indicating offsite construction’s ascension: venture investors have started betting big. 

Another bellwether indicating offsite construction’s ascension: venture investors have started betting big. Earlier this year, offsite construction startup Katerra raised a $130 million Series C round of funding, putting its valuation at over $1 billion.

Unless the construction industry labor pool returns to its former glory, which the numbers don’t portend, the need to spread out labor and cut costs is likely here to stay. Offsite construction gets projects completed faster, safer and cheaper, difficult things to argue against, even for an industry known for its slow adoption of change.

If you liked this article, here are a few more you may enjoy: 

3 Strategies for More Effective Prefabrication

Prefabricated and Modular Construction are Making a Big Comeback

Why Prefab Construction Isn’t Used More

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