The Labor Shortage is Our Fault

This isn’t a new issue. In fact, I remember researching and writing articles about this as early as 1995. Back then, the experts said the labor shortage was caused by fewer 18- to 34-year-old white males who had been the mainstay of the construction work force. Baby boomers were aging out and because Generation X was much smaller; there just weren’t the numbers to replace the boomers. The solution then was to seek alternative labor sources, including immigrants, minorities and women. I think we can all agree that the construction industry was quite successful in tapping the immigrant workforce for its labor shortage.

But what’s the reason we have a shortage now? The millennial generation is actually larger than the baby boomers, and we have integrated immigrant and minority labor into the pool. We’re still short of full acceptance of women in the construction workforce, but we’re making inroads.

Now the problem is much thornier and harder to solve, and the construction industry itself is the cause. Construction is a great job. Workers can make good money. They start working without taking on ridiculous levels of debt that college burdens them with. Sure, the work is hard, but that hasn’t changed, and in spite of what some people say, I don’t buy the argument that a generation of people is afraid of hard, dirty work. The older generation has always accused the younger generation of being molly coddled.

The problem is that while construction is a great job, it’s a really poor career. We treat new workers like they’re indentured servants, with a legacy of hazing that continues to this day. Who would want to be part of that?

Even worse, every few years when the market contracts, we lay off a significant portion of our workforce. During the residential construction recession that began in 2008, estimates are that we lost 75 percent of the workforce. If you were a young person who had spent seven to 10 years in steady labor and then were suddenly faced with losing your job, what would you do? If you have a family and responsibilities, you’d go find other employment in another industry.

A lot of companies also lay off workers during the winter months, making employment even more unsecure.

Older workers face long-term health issues that shorten their careers. Unless you’re lucky, you can’t work a construction job until retirement age. If you do make it, you’ve likely been promoted to a position of higher pay that makes you an even larger target for layoffs. I can’t tell you how many times I’ve heard contractors debate the conflict between retaining older, more skilled workers at higher pay versus keeping younger, less skilled and more productive workers at lower pay. It’s like the aging professional athlete who is winding down but is now a burden to the team he has played with his whole career. Does the team ownership retain him as a gesture of goodwill, knowing his salary will be a burden? Or does it cut him loose?

These are just a smattering of the problems we face in construction when dealing with the shortage of skilled workers.

There is one absolutely necessary thing the industry has to do to help combat this problem, and that burden falls squarely on the shoulders of company owners. Contractors need to build companies that are sustainable and reliable. You can’t have a banner year one year and scrape by the next. If you have a history of laying off workers, you’re a big part of the reason the construction industry struggles to find talented workers.

Professionally managed construction companies that are successful at landing work with margins large enough to sustain them through downtimes are essential to creating an environment that will allow skilled workers to build careers and not just have jobs.

There’s a lot to unpack here, but let me close by saying that building a company based on quality, not price, is the only way to achieve that end. You can’t build trust with your customers and providers you need to deliver quality if you’re constantly hunting the lowest price.