Skilled Labor Shortage
If you make your living in the construction industry, you have no doubt been affected by the shortage of skilled labor across the nation. The lack of labor is not a new challenge, in fact, it has been affecting both construction companies as well as building material dealers throughout the country for the past several years. As early as 2016, Cary Andersen, Senior Director for Epicor called the labor shortage at that time “the biggest challenge facing the Lumber Building Material industry”. The pressure on the industry to find workers has continued to get worse each year and was exacerbated by the COVID-19 pandemic in 2020.
The most recent 2020 Construction Hiring and Business Outlook report by the Associated General Contractors of America (AGC) revealed that 81 percent of construction businesses are having difficulty finding qualified skilled labor to fill open positions. While skilled labor shortages were an issue before the pandemic, according to a Statista report, the construction industry lost 975,000 jobs in April of 2020. That is 13% of the country’s construction workforce. And although 61% of those lost jobs have been recovered in the past year, the problem remains, many skilled craftsmen who dropped out of the workforce during the pandemic do not plan to return. Adding to this problem is an entire generation of younger workers that are no longer considering construction as viable career option.
The current labor shortage is not limited to contractors and is negatively affecting the entire channel. Increases in construction material prices, loss of workplace productivity, surges in manufacturing allocations and project delays are combined with increased demand and putting a strain on the industry. The result is upward pressure on new home prices and increased demand to consumers. The 2020 AGC reported the following:
- 57% cite the skilled labor shortage as the biggest challenge to worker health and safety
- 44% of companies have seen higher project costs
- 40% say that projects are taking longer than anticipated
While demand for building activity is expected to continue to grow, the growth rate will assuredly be limited by available skilled labor unless contractors and dealers make significant and immediate changes to adapt. According to the 2020 AGC survey, 32% of contractors are investing in cutting-edge tech like construction software. Others see a solution by partnering with their building material supply companies to maximize collaboration and communication in an effort to increase efficiency and productivity. Wilson Lumber recognizes the challenges facing their customers during this time and offers several solutions to address the crisis.
- Improving communication: Working closely and establishing a relationship with material suppliers will help contractors and builders improve communication, spend less time waiting on material deliveries and avoid unnecessary down time.
- Increasing accuracy: A good relationship with your supplier also allows the company to better understand a builder’s techniques and preferences. The result is increased accuracy and the elimination of mistakes that cause delays.
- Leveraging technology: Finally, partnering with a company that’s on the leading edge of construction technology can help speed up design, estimation, distribution and provide optimization to the construction supply process.
The simplest and fastest way to address the skilled labor shortage in construction is to make the most of the workforce you have by choosing the right supplier, analyzing your process, adopting lean building techniques, implementing training programs and embracing technology and software tools. All these factors can have a positive impact on day-to-day efficiency.