Techniques For Successful Construction Project Execution In The Labor Shortage Environment
There has been discussion in the news industry regarding the skilled labor shortage in the construction industry and trades. The statistics regarding the labor shortage are sobering:
- The construction industry will need to attract 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the demand for labor, according to a model developed by Associated Builders and Contractors (ABC). Adding:
ABC Chief Economist Anirban Basu states: “The scarcity of qualified skilled workers is an even more pressing issue,” said Basu. “Since 2011, the number of entry-level construction laborers has increased 72.8%, while the number of total construction workers is up just 24.7%. For reference, the number of electricians was up 23.9% over that span while the number of carpenters declined 7.5%. The number of construction managers has increased by just 2.1%. More than 40% of construction workforce growth over the past decade is comprised of low-skilled construction laborers, who represent just 19% of the workforce.
“An added concern is the decline in the number of construction workers ages 25-54, which fell 8% over the past decade. Meanwhile, the share of older workers exiting the workforce soared,” said Basu. “According to the Centers for Disease Control and Prevention, the industry’s average age of retirement is 61, and more than 1 in 5 construction workers are currently older than 55.
Numerous factors have contributed to the labor shortage environment. These include new industries competing for workers (computers, Crypto currency), focus on white-collar jobs and the perceived inferiority of being a blue-collar worker. Regardless of the contributing factors, the construction labor and skilled labor shortage have no signs of improving on the horizon.
So what can an Owner do to position their project success against these headwinds?
Owner organizations need to recognize that the industry has changed. An owner can no longer afford to simply develop a set of plans, put them on the street and expect to get numerous bids from Contractors. Contractors have limited resources and will hand-pick the projects that will be successful for them. A difficult, poorly planned, project perceived to be difficult will be passed on for better opportunities. It should be of no surprise that a number of government-related projects in the past year have received only one, or even zero bids.
Here are six (6) concrete steps that an Owner can take to mitigate labor shortages in construction:
1. Define and Plan the Project Early:
Recognize and accept there will be significant upfront effort to define and plan the project – even before engaging design professionals. Our experience is that 70 to 80% of projects reset within 2 to 4 months after the start of design. Lack of proper internal planning puts the design professionals in a disadvantageous position in the initial stages of a project.
2. Internal Resources and Capabilities:
Assess the internal resources available to manage the upfront project planning: If this capability and expertise do not exist in your organization, you need to find it and engage it to manage the project.
3. Project Delivery:
Determine the method of delivery of the project early in the planning. Is it going to be Designed/Bid/Build or is it going to be Design-Build, or a hybrid? Are you going to use A Construction Manager at Risk or a Construction Manager as Agent? Determining the delivery method enables the Owner to engage the construction team earlier for valuable planning and execution.
4. Prefabrication:
Incorporate prefabrication into the design. This is a new paradigm in buildings. Using prefabrication can take advantage of off-site labor, use fewer materials and increase quality. However, effective use of prefabrication requires extensive coordination during design and procurement.
5. Logistical Design:
Labor shortages are in all industries. As a result, there are significant supply chain challenges throughout business. To manage your project effectively, the design and procurement must identify and acquire currently available materials. Waiting until the project is designed and awarded to procure materials will result in changes in design and schedule that will translate into cost and schedule increases.
6. Automation and Technology:
Look for, and incorporate in the design, opportunities to use robots which are becoming more prevalent in the construction industry. While still in its infancy robots are a necessary tool to perform the work.
This is the new normal. Organizations that recognize and embrace these techniques will have the most successful projects.