Lack of skilled construction workers will reach critical stage in next 10 years

Tighter immigration laws, an aging work force and poor public image continue to shrink the industry’s labor pool as shortages approach   a critical stage.

By Kelly Davidson

An unprecedented nationwide shortage of skilled labor spells potential trouble for the construction industry as well as the nation ’s economy. As the country’s second largest employer after government, construction fuels the economy. In fact, the industry is second only to health care in its economic impact—contributing 8% to the U.S. Gross Domestic Product.

To keep pace, the industry will need one million new workers in the next six years and 2.4 million by 2014, according to the U.S. Bureau of Labor Statistics. Those demands may be difficult, if not impossible, to meet with the shift in the nation’s labor force. The number of baby boomers retiring far exceeds the number of people entering the industry. Over the next decade, this mass departure of skilled workers will create a labor void—a shortfall of more than 10 million skilled workers by 2010, if the Bureau of Labor’s projections hold true.

The industry is already feeling the pinch. A recent study from the Construction Industry Institute indicates that 75% of contractors are suffering labor shortages.

“We’ve turned down jobs or held back bids on several jobs simply because we couldn’t find the people,” says Matt Elam of Elam Construction Inc. in Grand Junction.

The asphalt paving company hopes to counteract some of the shortages by building loyalty within its team. “Retention is always an important topic, but it’s even more important now,” Elam says. “Our crews tend to stay pretty consistent, but we’re still really emphasizing in-house training for our supervisors to ensure that they know how best to work with their crews, so we don’t lose our employees.”

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The labor shortfall could pose an even greater challenge for the construction industry in Colorado, where enforcement agencies are cracking down on companies employing illegal immigrants. “The state of Colorado is now the toughest state in the United States for immigration law,” says Anne Allott, a Centennial-based immigration attorney and the author of the Employer Handbook on the Hiring of Authorized Workers.

At a time when some industry insiders think illegal workers could be a valuable resource, a new state law, which took effect on Jan.1, requires employers to verify documents using online government databases and essentially vouch for each newly hired employee with an affidavit [see related immigration commentary on p. 33]. Unlike federal laws that allow employers to accept documents on good faith, the new state law holds employers more accountable by putting the burden of proof on them. Those who knowingly fail to submit proper documents or submit falsified documents shall be subject to fines up to $5,000 for the first offense and $25,000 for additional offenses.

“Many of the federal laws on the books have not been enforced, either because of a lack of resources or because of a need for labor, but there is a budget to enforce this law, and it will be enforced. That will make it very, very difficult for construction companies to find the trained workers they need,” Allot says.

Another state law, in effect last August, could make it even more difficult for some companies to bid on state contracts. The law prohibits a state agency or political division from entering into a public contract for services with a contractor who knowingly employs an unauthorized worker.

“This will only make it more difficult for some companies to compete and work on state or government contracts because they won’t be able to find workers,” Elam says. His company routinely works on state projects such as repaving the south canyon stretch I-70 through Glenwood Springs last summer.     

As the firm’s human resources director, Elam ensures that his company “goes above and beyond” to comply with the laws, but he is still concerned that the new law will prevent his company, as well as other mid-sized firms, from bidding on lucrative state contracts.

“We wouldn’t want to risk not being able to deliver simply because we can’t find the eligible employees to finish the job,” he says. “It’d take substantial wage increases to find the local labor we need to compensate for the shortages. State and government agencies will certainly feel the effect. Prices will go up, and ultimately, the burden will fall on the government and then the taxpayers.”

The reality is, immigration law and enforcement is a topic few care to discuss publicly, yet one for which everyone has an opinion.

The Solutions

People who get involved in the politics of the labor shortage soon realize that everyone has the solution. But there is no clear way out of the labor crisis. It is a tangled mess of information, opinions and political agendas. In spite of this, the industry is focused on the same goal—finding workers to get the jobs done.

In many ways, Sharon Van Sickle, a skilled mechanic and 15-year veteran in the industry, represents one solution. As a >> working mother who is part Native American, she typifies a pool of labor that has been under utilized in the past. “The construction industry is still very much a man’s world,” says Van Sickle, safety director for Castle Rock Construction Co. “Over the last 10 years, I’ve seen more women come into the field, but still not enough.”           

Through its apprenticeship program, Castle Rock Construction is attracting more women and minorities to its crews. They account for 50 percent of the company’s current labor program. While the company does not target women and minorities specifically, it does work with the Colorado Contractors Association to find interested people of all backgrounds, Van Sickle says. 

The association encourages its members to work with community-based organizations to recruit more women and minorities to the industry. “It’s a difficult sell >> to women because they have so many options elsewhere and because of our culture, but we have had many, many successes bringing women into construction,” says Terry Kish, CCA’s director of safety and work-force development. “But it’s going to take more than women and minorities to fix the problem.”

At the core is a lack of outreach at the high school level. Construction ranks 249th out of 250 possible attractive occupations, according to a recent survey of high school students.

“A lot of the high school kids are heading to college and never realize the opportunities in construction industry,” Van Sickle says. “Why would they want to get their hands dirty doing mechanics or construction when they could make just as much or more working on computers? That’s where we, as an industry, need to make a stronger effort.”

An online campaign sponsored by the AED Foundation—made up of the Association of Equipment Manufacturers and the Associated General Contractors of America—is a step in the right direction. The Web site, www.constructmyfuture.com, allows students, teachers and parents to explore and research careers in the construction industry.

For its part, the Associated General Contractors of Colorado are trying to breakdown misperceptions of the industry and encourage high school students to explore construction as a career. “It’s going to take a lot of education and training because the labor pool must be skilled, trained labor,” says Lee Blum, director of education and career development for AGC/C. “One of the best ways we, as an industry, can develop new workers is to look to the high schools.”

This year Blum is working closely with Rep. Nancy Todd (D-Aurora) to amend House Bill 07-1118, which would require the state to develop new graduation guidelines for different post-secondary school paths, such as art school, technical school and two-year vocational programs. The new guidelines would still emphasize the fundamentals while allowing students to receive graduation credits for courses that have traditionally been elective credits, Blum says. Thanks to her efforts and testimony at the legislature, the bill now includes construction technology and supports training at the high school level.

“The bill helps kids become more aware of the wider spectrum of possibilities,” Todd says. “It puts construction technology on the radar, says it is important, and recognizes that not all students must be ready to go to college. There are multiple and diverse pathways for students after high school. We want to ensure that each pathway is rigorous and relevant to each student’s goal.”

Finding solutions is as much about creating new workers and training them well as discovering ways of getting the jobs done now and in the interim. The Colorado Contractors Association encourages companies to implement programs that will reduce turnover and improve productivity by cross-training their employees.

“We need to train our workers in multiple crafts because we need to be able to do more with less people,” Kish says. “Operators should be able to operate all pieces of equipment on a crew. To deal with the labor shortages, we essentially need ‘super technicians’ or ‘super carpenters’ who can do it all.

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