Sep 23 , 2019
According to a recent study from the Home Improvement Research Institute (HIRI), 27 percent of pros said that the skilled-labor shortage has delayed projects. More than one third of all projects are delayed by at least three weeks, putting budgets, timelines and reputations in jeopardy.
Lynn Osborne, a homeowner in Fort Collins, Colorado, has been remodeling two homes in separate states and with different contractors. Both projects have been delayed due to a lack of skilled labor. Her beach home in New England is currently over a year behind schedule, and still unfinished, because the contractor has had to complete most of the work himself.
Another widespread result of the labor shortage is the number of projects companies are being forced to turn down because they can’t find enough skilled jobsite workers. Half of the HIRI survey respondents said they turn down up to 5 percent of all projects because they don’t have enough workers to get the jobs done.
Record-high job openings
The Department of Labor reported that the number of job openings in construction, last reported for May, totaled 376,000. It was the highest May total on record in the 19 years that the DoL has tracked the metric. The impact of the labor shortage is twofold: Without enough skilled jobsite workers, construction lags behind demand, which stagnates economic growth.
One reason for the labor shortage is that construction firms haven’t fully recovered from the financial crisis and Great Recession of the late 2000s, when the Department of Labor estimates the industry lost 2.3 million jobs. Many skilled labor professionals found other careers and never returned to the industry. And as more baby boomers retire from the profession, younger generations’ negative misconceptions of construction careers leads to fewer workers stepping in to take their place.
No end in sight
Even as construction firms offer higher wages across the U.S., the current construction labor shortage is big—and still growing. The industry is expected to need an additional 747,600 workers by 2026, according to the U.S. Bureau of Labor Statistics.
Contractors will need to do more than up wages to attract and keep skilled jobsite workers. Potential incentives could include pre-apprenticeship programs, advanced training, flexible schedules and better benefits.
In the meantime, construction firms are limited on what they can deliver, causing them to think twice about signing new work contracts. To many, it’s better to turn work down than be penalized for delays when there’s simply not enough labor to get jobs done.