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By Laura Moretz
October 1, 2018
Building demand is going strong while qualified workers are scarce; the news will come as no surprise to people following construction industry trends, or those looking to hire more workers. Here are results from recent industry surveys, followed by plans to increase training and fill the gaps in the U.S., the U.K., Australia, and Canada.
In the U.S., 58 percent of contractors expect to hire more workers in the next six months, according to the Q2 2018 Commercial Construction Index (CCI) of the USG Corp. and the U.S. Chamber of Commerce. More than half of these contractors—56 percent to be exact—report difficulties in finding workers. They admit the trend has been prevailing for the last year and a half.
One respondent to the CCI Survey said: “[My single most important concern about my business in the next 12 months is] qualified and experienced tradespeople leaving the industry due to retirements. We continue to lose years of experience without the ability to backfill with equal skill.”
With the promise of large infrastructure projects to come and awareness of the construction labor shortage, the U.S. Congress has recently passed legislation that will ease barriers to new training programs in schools. The bill, called the Strengthening Career and Technical Education for the 21st Century Act, streamlines the application process for federal funds for state-level programs and improve alignment with jobs that have the highest need.
Stephen E. Sandherr, the chief executive officer of the Associated General Contractors of America, comments that the act “will help address the growing shortage of qualified workers that is keeping many construction firms from hiring even more workers.”
Shortly after the legislation passed, the North American Trade Unions announced its commitment to train “250,000 new apprentices in our state-of-the-art Registered Apprenticeship programs for skills that will not only meet the demands of industry, but will also fully equip individuals with portable skills that will lead to rewarding middle class careers in the construction industry.”
In the U.K., construction company owners are similarly feeling the pinch when it comes to hiring tradespeople. The Q2 2018 State of the Trade survey from the U.K.’s Federation of Master Builders reports that “65 percent of firms are struggling to hire bricklayers, up from 58 percent in the previous quarter, and 60 percent are struggling to hire carpenters and joiners, up from 55 percent in the previous quarter.”
British organizations are stepping up to help with training. The U.K.’s Construction Industry Training Board has launched a £22m Construction Skills Fund that will allow builders to train workers at construction sites. CITB, a leadership organization in the U.K. construction industry, is administering the grants, aiming to help employers address the construction skills shortage. A press release reports that the fund will go to support:
20 on-site training hubs in England
Work experience and placements for people working to join the industry
Entry pathways for those currently unemployed, and
Pathways for career switchers.
Also in the U.K., the Chartered Institute of Builders has reported that the industry will be needing 157,000 new tradespeople by 2021 to keep up with demand. To help fund training, the government has committed to funding 3 million new apprenticeships, paid for with a levy set at “a rate of 0.5 percent of an employer's wage bill collected monthly via the Pay as You Earn (PAYE) mechanism. The levy applies to companies of all sizes with an annual payroll bill of £3 million or more—less than 2 percent of UK employers,” according to Construction Global.
The Australian Government Department of Jobs and Small Businesses reports that in 2017, there was a shortage of skilled labor across all of the trades, and only 53 percent of the positions were filled.
The government’s Skilling Australians Fund will provide up to $1.5 billion for vocational training through 2021–2022, some of which is for construction trades. Master Builders Australia recently praised the decision of states and territories to match the government funding for training. Denita Wawn, the CEO of Master Builders Australia said in a press release,
“We predict a shortage of 300,000 skilled workers over the next decade and this decision by these jurisdictions will give us a chance to fill that gap, ensuring homes, schools, hospitals, and roads can be built to meet the community’s needs.”
Unfortunately, construction companies in Canada are struggling to find qualified tradespeople as well. The British Columbia Construction Monitor reported in February that 75 percent of companies don’t expect to be able to find the skilled workers they need in 2018. In the survey results, glaziers were the hardest to find, with 100 percent of employers reporting that as a need, followed by pipefitters, 93 percent; sheet metal workers, 91 percent; electricians, 89 percent; and plumbers, 89 percent.
Canada is also facing construction labor shortages. The Equipment Journal of Canada reports that 20 percent of construction workers will retire in the next decade, and these workers will not be replaced at the rate of retirement. Considering there are more construction jobs now than a generation before, and the problem intensifies.
Bob Collins, a senior economist for BuildForce Canada, told the Equipment Journal: “We will rely on new Canadians, the indigenous population, and women. Women in construction are four percent, that’s it. There’s lots of room there.”
In Toronto, Creating Real Apprenticeships for Toronto is focusing on training women this year. Its pre-apprenticeship program aimed at introducing young women to the trades that includes subsidies for travel and childcare. The program has been offered before for men and women together.
Canada also offers visas for skilled workers who have jobs in Canada as a pathway to citizenship.
One result of the scarcity of labor is higher hourly wages. The 2018 Turner Townsend global survey found that the average hourly wages in US dollars by region were $71.40 in the U.S. (and $98.30 in New York City), $58.60 in Australasia, and $38.20 in Europe.
If you liked this article, here are a few eBooks and webinars you may enjoy:
How to Hire Talented Workers Even During a Labor Shortage
7 Strategies for Hiring and Keeping During the Labor Shortage
Help Wanted - How Technology is Fighting the Construction Labor Shortage
skilled labor shortage
international politcal economics
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