Lack of Skilled Labor Hurts Productivity

This week’s focus is on the current lack of skilled labor and how it affects construction productivity, including risk and costs. Boom and bust cycles have always affected the labor force; however, the recession after 2008 was particularly disruptive due to the size of the baby boomer generation and its proximity to retirement. As experienced leadership retired due to the lack of work or moved into other industries, it created an intellectual vacuum for many trades-related jobs. With experience vacating, there was not the transfer of knowledge that generally occurs when leaders have time to mentor new trades-persons. In addition, the act of apprenticing younger generations or new workers into trade schools has dramatically decreased. Coupled with the U.S. population’s increasing sentiment over the years stressing that high school graduates must go to college to get a good job, the labor pool for skilled workers is less than stellar.

As any professional will tell you, the most important skills a person gains are from on-the-job training. Having a degree is great, but without the mentoring that comes from hands on experience, employees in all jobs will fail miserably; theories and standards only go so far in the workplace. Production expertise also develops real time application, and without a significant number of projects over the last decade, mentoring or apprenticeship, the newer workforce has not received the experience and practice required to fulfill the need in this booming economy.

For those workers who were not financially capable of retiring or just not close to the age to do so, underemployment has greatly affected the productivity of the labor force as skilled people are unable to find full time work in their desired fields and are working several part-time jobs to make ends meet. As underemployment lasts, the labor force loses the ability to update their skills with on-the-job training, leading to a lack in the right skill set for their desired field of employment. In addition, as time passes, the underemployed miss the necessary on-the-job mentoring, and when the economy picks back up, they are now contending with the freshly graduated and inexperienced for entry-level positions in their fields.

Today, with the economy booming and construction at an all-time high, companies are finding themselves in a bind as there simply aren’t enough skilled laborers to fill the positions needed in the fields. Without the necessary knowledge and experience to successfully run jobs, productivity slumps – affecting profit margins and creating a perfect storm for risks. Just as the AGC describes, due in part to the lack of skilled labor, new bids have higher prices, longer completion times, and higher costs than expected.

In order to mitigate risks associated with the lack of skilled labor and experienced leadership, Construction Management must look to other means possible. Subcontracting professional services is now a very viable option. Similarly, a General Contractor trusts their design build subcontractors to deliver a project, they must now delegate even more as there aren’t enough qualified individuals in the labor pool to handle certain aspects of project management in-house. Consulting and project management firms can help handle differentiated aspects of the build for a more seamless project. This cuts down on the errors that occur from having an unskilled labor force. The experience and hands on training that occurs in project management companies allows these companies the necessary skills to focus on areas of expertise, leaving the construction professional the ability to focus on running the rest of the job successfully.