AGC report highlights creative strategies by construction contractors to combat workforce shortages, including partnerships, training programs, pay raises, and tech solutions. Despite challenges, firms remain optimistic about future growth and are adapting to industry changes.
Adobe Stock photo
AGC members are sharing recruiting ideas, from online outreach to referrals through subcontractors.
The construction industry is no stranger to hard work. So, when it comes to workforce shortages, instead of throwing up their hands contractors are rolling up their sleeves. Companies have gotten clever in their strategies to overcome workforce issues. Not wasting time pointing fingers at the federal government's preference for higher education over craft training, the industry instead is opting to develop a culture that invests in workers for the long haul.
In its annual workforce survey, the AGC finds its members are carving away at the "significant" impact of federal workforce policies.
In analyzing survey results, the association said the fed's policies mean it costs more, takes longer and is less certain if a project will start on time.
However, the association outlined a range of steps construction firms are taking to build new workforce development partnerships.
"So too are AGC of America and its network of 89 chapters working to address workforce shortages," said Jeff Shoaf, CEO of the AGC.
The group has partnered with member chapters to run more than a dozen targeted digital advertising campaigns designed to reach and recruit new workers.
Shoaf said they've created and shared recruiting resources, including a template recruiting website for chapters.
"Our Culture of Care program … available to the entire industry … is designed to help firms retain workers by teaching them how to create more welcoming and inclusive job sites."
And, he said, "we regularly host virtual and in-person gatherings to share workforce development success stories and encourage their replication."
Association chapters run a host of training and recruiting programs as well, partnering with local school districts to create new construction academies.
Pre-apprenticeship and registered apprenticeship programs have been built through a network of career and technical education teachers.
And members host dozens of construction career fairs each year, among many other workforce efforts.
Nitty Gritty of Workforce Issues
Shoaf is confident federal workforce policies will make a meaningful and lasting difference for the better for the nation's construction workforce.
There is no denying that contractors are even more challenged to fill open positions this year than they were in 2023.
The AGC-Arcoro survey found that 94 percent of respondents reported having open positions for craft workers. In 2023 that number was 85 percent.
Likewise, for 79 percent, openings for salaried positions are plentiful. That compares to 69 percent a year ago.
The AGC reports that among those firms, 94 percent face challenges filling craft positions and 92 percent report difficulty in filling salaried openings.
"Nearly all craft positions are hard to fill," noted the survey analysis. More than 60 percent of firms find difficulty filling craft trade positions.
AGC noted hiring mechanics and cement masons was the biggest challenge; 83 percent of firms that employ either occupation say workers are hard to find.
The most-mentioned hard-to-fill salaried position is superintendents, listed by 83 percent of the firms seeking those workers.
Project managers/supervisors are listed by 81 percent of firms and estimating personnel by 78 percent, according to the AGC survey.
Finally AI personnel/specialist, currently the least-mentioned salaried position, is rated hard to fill by 30 percent of firms.
"The candidates are mostly there, they just aren't qualified to work," said the AGC.
Adobe Stock photo
In fact, 62 percent of respondents reported that available candidates are not qualified to work in the industry for reasons such as a lack of skills.
Half reported that some new hires fail to show up or quit shortly after starting.
And 43 percent said potential employees lack required credentials, such as a driver's license, work permit or clean background check.
Meanwhile, 37 percent list candidates' failure to pass a drug test as a disqualifying factor. That is up from 33 percent in the 2023 survey. And 23 percent said potential employees list difficulty acquiring reliable transportation to and from a job site as a factor.
It's notable that 22 percent stated some candidates report needing flexible work schedules or an option for remote work.
Despite all of the hardships in hiring qualified workers for the long haul, companies report trying innovative approaches to meet the needs of good workers.
Not Waiting Around for the Fed
The AGC survey found that 61 percent, more than half of responding companies, raised base pay for hourly craft workers even further than they had a year earlier.
And 42 percent initiated or increased spending on training and professional development in the past year.
"The industry is also looking to technological solutions to help overcome workforce shortages," said the AGC.
In fact, one out of four firms has increased the use of learning programs with a strong online or video component, such as holding classes using Teams or Zoom.
"Contractors have mixed expectations regarding the impact of technologies such as robotics and artificial intelligence [AI] on construction jobs," AGC said.
A majority believes these technologies will positively impact jobs by automating error-prone tasks or improving job quality and making workers safer and more productive.
"But a third of respondents expects no effect on construction jobs and 10 percent believe the impact … will be negative, by eliminating jobs," said AGC.
No one's giving up, either. The survey found many are going where the workers are, starting with social media and targeted digital advertising.
The AGC reports that 57 percent of responding firms added online strategies to connect better with younger applicants. Approximately half engaged with a career-building program, at high schools, colleges or career and technical education programs.
Some 28 percent of firms used an executive search firm or professional employer organization. And 23 percent report using the services of a craft staffing firm or engaging with a government workforce development or unemployment agency.
A fifth of firms added or increased the use of sub- or specialty contractors or implemented software to distribute job postings and manage applications. Just 7 percent applied for employment-based visas, such as H-1B or H-2B. Those open-shop and union contractors using these visas was the same in 2023.
The result of all this beating the craft trade bushes is a boon for those workers seeking employment in the construction field.
In fact, 61 percent of responding contractors increased pay rates or benefits even more for hourly workers this year; 45 percent did so for salaried employees.
"Contractors are rethinking how they operate to cope with and overcome labor shortages," said AGC.
Moving Forward, Not Looking Back
It bodes well for the industry's future that even with the labor shortages most contractor firms expect to expand in the next 12 months, reported AGC.
In fact, 73 percent of firms, up from 69 percent last year, expect to add employees; 19 percent expect no change and 8 percent expect to drop headcount.
"If realized, such expansion would be more widespread than in the past 12 months," said AGC.
In that period, roughly half of firms added employees, while 30 percent reduced headcount and 19 percent had no change, said the association.
"Unlike last year, when optimism was nearly uniform nationwide, there is more regional variation this year."
The AGC found that firms in the Northeast express the most optimism — 83 percent expect to expand headcount in the next 12 months.
Adobe Stock photo
Those numbers were followed by the South, at 76 percent of firms; the West, at 70 percent and the Midwest, at 69 percent.
"Shortages of workers and certain essential equipment are still causing headaches for many firms," said the association.
Materials shortages and delivery delays are much less common, but a majority reports project delays from their own or subcontractors' worker shortages.
And, longer lead times or shortages have delayed some projects for about half of firms, said the AGC.
In fact, 41 percent cite long lead times for electrical equipment such as transformers and switchgear as a source of project delays.
"Long lead times for mechanical equipment such as heating, ventilating and air conditioning gear is another source of delay," as noted by 28 percent.
"About one-third list delays due to government, such as lack of approvals or inspectors, or delays due to an owner's directive to halt or redesign a project."
One source of delay that has improved is transportation or delivery delays, cited by 21 percent, compared to 36 percent in 2023 and 64 percent in 2022.
"Projects are still being canceled, postponed or scaled back for a variety of reasons," said AGC. "Half of respondents cite increasing costs as a reason, while 40 percent report financing was unavailable or too expensive."
One out of five respondents noted changes in demand or need as reasons for project cancellations, deferrals and scope reductions, similar to the 2023 survey.
But this year only 17 percent, down from 22 percent last year, list lengthening or uncertain completion times.
That's another positive sign that availability of materials has improved over the past 12 months, said the AGC.
"Opinions are split and evolving as to the impact AI and robotics will have on construction jobs in the next five years," said the association. "Fewer respondents than a year ago expect positive or negative impacts, while more respondents expect no impact." CEG
Lucy Perry
Lucy Perry has 30 years of experience covering the U.S. construction industry. She has served as Editor of paving and lifting magazines, and has created content for many national and international construction trade publications. A native of Baton Rouge, Louisiana, she has a Journalism degree from Louisiana State University, and is an avid fan of all LSU sports. She resides in Kansas City, Missouri, with her husband, who has turned her into a major fan of the NFL Kansas City Chiefs. When she's not chasing after Lucy, their dachshund, Lucy likes to create mixed-media art.
Read more from Lucy Perry here.
Today's top stories
