Causes of the Construction Skilled Labor Shortage and Proposed Solutions

The shortage of skilled labor that the American construction industry is currently encountering has been perpetuated by a combination of causes. Changes in vocational education and technology coupled with varied economic conditions and a shift toward open shop contracting have lured or forced away many of the industry’s skilled trades person and steered away younger people in search of employment in construction. The result is a gap in the labor pool of skilled tradesmen. In order to combat this problem, a two phase program must be implemented. The short term answer to the shortage is to retain those workers currently employed and to streamline construction practices to reduce labor strain. The long term solution demands a recentering of the construction education system to develop new interest in the industry and a cooperative effort by owners, contractors, and workers to collectively improve the tarnished image of the construction worker as a skilled profession.

Key words: Construction, Skilled labor shortage, Construction trades, Apprenticeship training, Worker image

Introduction

Construction in America is presently experiencing a new era of prosperity. Changes in management techniques coupled with the onslaught of computer-driven technology are rocketing the construction industry into a new, streamlined state augmented by an influx of construction materials that, in the previous years, were unavailable to contractors. However, despite all of these advances, one aspect of construction remains a constant, the construction worker. A skilled craftsperson is easily identified by their reliance on their mechanical skills and their emphasis on production (see Table 1). Typically, this group of workers relies on the usage of hand tools and normally derives great pride in transforming raw materials into a finished, usable product (Tidewater Technology Associates, 1985).

There is no other individual on any given site that possesses a more specialized and complete understanding of a trade than the skilled craftsperson. These people typically have some type of formal training in their respective crafts and have been working in the field for many years. But due to an assortment of causes, the number of skilled workers in the American construction workforce is dwindling. In a 1997 study conducted by the National Center for Construction Education and Research (NCCER), they found that 92% of national construction firms reported shortages of skilled labor, and over 85% of those surveyed said their current workforce is not as skilled as it should be in today’s market (Shelar, 1998). This problem, however, is not geographically specific nor is it limited to any particular trade. In 1996, the Business Roundtable surveyed a similar group of businesses and found that 75% of respondents reported an increase in the labor shortage over the previous five years (The Business Roundtable, 1998).

Table 1

Relationship among workers; arrows indicate increased emphasis (T2A, 1985)

In the late 80's, many predicted shortages across all segments and crafts within the construction industry for the coming decade (Schriener, 1990; CLRC, 1990). However, this finding was overlooked by the building community due to two un-forseen events - the impact of recession and the end of the cold war (Craftworker Crisis, 1998). The former reduced construction employment substantially and the latter reduced the number of people employed in the defense industry and created a potentially greater supply of individuals for the construction work force. Yet, there is a real need to develop long-term strategies to solve the problem of supply and demand of skilled worker for the construction industry over the next two decades. This paper examines the causes of the labor shortage and suggests the ways it could be mitigated.

Economic Change

The economic change that America has seen for the last decade is one of the leading causes of the skilled worker shortage. As the recession of the late 1980s waned and construction rebounded from its slump, unemployment rates nationwide dropped to their lowest point in nearly seven years. However, as more Americans were returning to the workplace, the construction industry was not receiving the amount of labor that was displaced by the previously poor economy, and as the volume of new construction rose, the number of new entrants into the field did not (Willow, 1998). This began to create a gap in the workforce where the baby-boomer-era skilled craftsperson, now approaching their 60s, were looking towards retirement. However, with the rising costs of healthcare and the decreasing Social Security and pension payments, many older workers leaned towards continuing their respective trades. According to the Bureau of Labor Statistics, between 1984 and 1993, the number of men, ages 55 to 61, who continued to work while receiving pensions or incomes (including Social Security) rose from 37% to 50% (Fisher, 1998). Thus, many contractors saw no need to recruit and train new employees who could replace the skilled, older workers who otherwise would have retired except for the poor economic times. The end result of this managerial oversight was an uneven age distribution, characterized by a majority of the technical skills and knowledge retained by older workers and a smaller number of incoming men and women with generally deficient skill levels and a lack of formal industry training.

Furthermore, to augment the skilled workforce shortage created by a prior bad economy, those workers who did enter the construction arena were trained poorly and sometimes not at all. Many contractors and industry professionals, believing that their interests were protected by the aging workforce saw apprentice training as more of an expense than an investment into future productivity (Thornton, 1998). The pressures indirectly imposed by the slump in the business cycle had triggered a cost-cutting policy that often times not only cut training programs, but in many instances, forced struggling companies to decrease the benefit packages that employees relied on for support. The wage level had always been an issue in construction, but most small firms lacked the ability to provide comprehensive benefit packages, and thus, many workers left the construction field to pursue employment with larger manufacturing companies who could provide strong benefit packages for their workers (Roths, 1998).

Technological Change

Technology too, claimed a stake in the decrease of skilled labor in the construction field. As the economy improved, the technology industry boomed in the early 1990s, and most industries became increasingly dependent upon computers. Thus many emerging, new workers flocked toward the high-dollar computer industry (Kadlub, 1998). In addition, technology helped to damage the skilled labor levels in construction by quickly surpassing the traditionally slow-growing but stable industry. While contractors jumped at the strengthening dollar to secure work, the training programs that did exist were not kept current with the technological advances in the construction field (The Business Roundtable, 1998). In effect, training lagged behind technological advancement in the industry and labor was lured to high paying computer careers and the skilled workforce suffered.

Union/Open Shop Changes

Traditionally, both job training and craft education in construction were handled by the trade unions. Apprenticeship programs provided young men and women an opportunity to learn a lucrative trade and receive valuable on-the-job training simultaneously. However, in the early 1980s, as the power of the unions began to fade and more contractors were pursuing open shop agreements, the non-union companies were unknowingly assuming the responsibility of craft training. As one Colorado contractor described the problem, "The unions dropped the ball, and [open shop] companies haven’t picked it up (Kadlub, 1998)." Some strives were made to promote open shop training, but this training was often shorter and less formal than traditional union instruction, and because open shop contractors lacked the placement opportunities that union work provided, many trainees quit the training to take job offers when the demand for workers rose (Kadlub, 1998). This hurt the skilled labor force because fewer and fewer of the people who selected construction as a career path were developing necessary job skills for the industry since the once stable educational institution of the construction field was losing its share of workforce training. However, some union officials dismissed worries about the shortage of skilled labor inflow by citing that union interests are sometimes better served at the bargaining table during a skilled labor shortage because management no longer holds the ability to seek other labor sources (Willow, 1998). Overall, the general shift of American workers out of the unions, where training was available, and into the open labor market in effect diminished the skilled labor pool.

Educational Changes and Image

More recently, another change that has affected the inflow of new skilled labor in the construction industry is the educational change that has impacted the younger generations. Between 1980 and 1990, enrollments into college grew by 34% (Kadlub, 1998), proving that compared to the past generations, more people are seeking higher education in an effort to secure a more lucrative profession and consequently live a "better" life than their parents did. It appears that here, a stigma is being cast upon construction trades as low paying, manual, thankless, outdoor work rampant with drug and alcohol abuse. One researcher in 1990 alluded to the rising dilemma citing:

The term "construction worker," embodied as the unskilled manual laborer, has negative connotations for young people. To youngsters, "construction workers" are ditch diggers they see calling obscenities to passers-by, loafing on the job. Most commonly associated with dirt, sweat, and a gruff demeanor, the construction worker lacks prestige, class, and respectability (Rosenthal, 1990).

This negative image is consequentially being relayed down and into the high school aged children who represent the hope of controlling the skilled worker shortage. In Milwaukee, Wisconsin, for example, enrollment in vocational technical education (votech) trade programs has currently dropped by 50% since the late 1970s, and the number of cooperative education programs has dropped from nineteen to four with the number of students enrolled just one-third of what it was 15 years ago (Millard, 1998). Most contractors agree that the secondary education system and the votech programs do not even teach the skills that are necessary for work in the industry today.

In turn, this is perpetuating a decline in the number of students who even choose construction as a career path. In a Wall Street Journal Almanac Poll of high school aged votech students, construction worker ranked 248^th out of 250 possible occupation choices, ahead of only "dancer" and "lumberjack" and was just edged out by "cowboy" (Shelar, 1998). Therefore, one key problem of the current skilled workforce shortage is the entrance of new workers. Some of the influences that cause the construction industry to suffer image problem and individuals not to choose construction trades as careers are:

Thus, it is evident that today's construction worker maintains a tarnished image and the trades do not command the respect that they once held, which is steering away the youth from the profession.

Cause Relationships

The causes of the construction skilled labor shortage appear singular and unrelated. However, all of the causes mesh together at a single point where the severity of the issue is clear. The economic problems of the 1980s forced the older, skilled crafts workers to remain at work longer which developed a young, replacement workforce with skill deficiencies. Many intermediate aged workers, also pinched by the recession, either returned to school to seek higher education or ventured down another completely different career path which yielded better pay and benefits. This added to the negative image of construction, which trickled down the youth, which represented the chance of bridging the skilled worker gap, and caused fewer high school aged children develop an interest in the industry. They tended to focus their attention instead on the high paying new technology-based job market. Furthermore, those who did enter into the construction arena have had trouble receiving adequate training for the skilled positions because as the work shifted to open shop and the unions diminished in strength, the once comprehensive apprenticeship programs were not replaced.

However, the construction industry is far from being outdated by technological change, and the skilled workers needed to fill the labor gap will command higher paying and more respected jobs that do not require four-year-degrees but instead could be based on more focused and often overlooked training programs. Therefore, the question is posed: how is this shortage of skilled workers in the construction industry filled?

The solution to the skilled worker shortage is two-fold. First, the situation must be stabilized for the short term, and second, special programs must be implemented to avoid the long term problems.

 Short Term Solutions

The skilled craftsperson shortage is a problem that inherently requires time to provide a lasting solution. However, because of the present upturn in the economy, the demand for construction work is increasing while the number of skilled men and women in the workforce is decreasing. To combat this problem on a short term, small scale, some contractors opt to pursue the easiest and most basic approach, keep workers working. This means that managers must retain what workforce they presently have and keep them happy by using bonuses, overtime opportunities, loyalty rewards, and promotions as incentives. Other contractors try to avoid skill shortages by selectively "sharing" their workforce. Typically small in scale, these programs join the contractors and owners together to schedule and stagger projects to avoid stretching the already thin workforce (Shelar, 1998). Additionally, another short term solution within a skilled labor pool is to minimize skill mismatches (Yeo, 1998). For example, in the event of a carpenter shortage, it is generally not a wise management decision to fill a gap with an out of work plumber because plumbers usually lack the necessary understanding of the structural principles of carpentry. Furthermore, this assignment could have the possibility of worsening the problem as the plumber could hinder carpentry work and even create another shortage in the plumbing trade.

Another simple, yet effective short term resolution that some contractors employ to ease the worker shortage is to contract less work. Quality subcontractors will remain loyal if they are kept happy. Maintaining a good general contractor-subcontractor relationship is paramount to retaining work in a labor shortage because these subs represent the skilled trades that supply trained labor, which is needed for the completion of a project. Subcontractors depend on this loyalty and respect from the general contractor, and they also require steady work, prompt payment, and good supervision to perform (Donohue, 1996). Thus, the skilled labor shortage in the construction industry can be slowed in the short run by contracting less work and maintaining healthy subcontractor relationships, and implementing skill matching and labor sharing programs.

Long Term Solutions

Short term solutions are invariably difficult to maintain. These measures overlook the causes of the problem and provide more localized answers for a single contractor or building community. The long term remedy for the skilled worker shortage is more involved and is centralized around education. As discussed earlier, the decline in votech program enrollment and the rise in the number of people seeking higher education has all but killed the construction trade education programs in the United States. Redevelopment of student interest and participation is the key to support more school-to-work programs at the high school level, where children begin to realize their individual career goals. These link local contractors directly to in-school construction classes and afford the student the ability to receive traditional classroom teaching in conjunction with construction site visits and instruction. Some programs even include staff mentoring where workers "adopt" a student and periodically check the pupil’s progress and help the student to gain a more rounded view of the construction process (Kadlub, 1998). Typically, these school-to-work programs do not use a universal curriculum, and thus are more aimed at developing an interest in construction.

The second educational solution is a natural progression after the primary education and it leads into post-high school classes and into the votech/apprenticeship programs. These programs conduct more specialized course training anywhere from six months to four years in length, and students are usually required to work either full or part time in conjunction with the studies to develop a hands-on experience. Historically, the unions have carried out most of this training through their apprenticeship programs, but with the open shop now commanding 75% of the construction market share, they must take over the helm and help to recenter the education of today’s skilled craftsperson. Thus in response to this need open shop contractors have established the National Center for Construction Education and Research (NCCER) which is striving to standardize construction curricula and provide national certification for skilled trades (Craftworker Crisis, 1998). However, the school systems must also tackle the poor image by better educating high school career counselors. Programs for these academic advisors must be developed to generate both awareness of the industry and its needs and local contacts to provide a solid outlet to those students who do develop an interest in the construction trades (Federle, et. al., 1993). But whether these programs are funded by the unions, open shop contractors, the government, or private sources, the finality of the matter is that to create more skilled workers, someone must educate them.

Along with teaching, perceptions of the construction worker and the construction industry must change in the long run. The respect that the skilled worker once held must be regained, and this is a task that must be undertaken by everyone in the field (Craftworker Crisis, 1998). First, owners must recognize their contractors as trained specialists and approach them as a professional organization, much the same manner in which they would direct themselves toward an architect or engineer. Second, contractors must make an effort, also, to display these professional attributes that they desire and to run a business that earns this needed respect. Finally, the workers, themselves, must recognize their individual worth and develop self-respect, which can in turn, trickle down in to the younger generations. This feeling must also be reinforced by management who treats their workers as people and not as expendable commodities.

To accomplish these improvements in education and image, owner participation is needed. As with anything, money is required to put these advancements into practice and consequently, a representative group of America’s largest construction company owners, The Business Roundtable (BRT) released in January 1998 a report recommending that owners contractually require proof that contractors bidding on their jobs are providing craft training for their workers along with a description of their financial investment into these ventures (Craftworker Crisis, 1998). The BRT additionally endorses the NCCER as a method for implementing these training procedures (BRT Endorses NCCER, 1997). Overall, the craft worker crisis is surmountable. It inherently contains short term solutions that, in effect, are only stop-gap measures that can only impede the acceleration of the shortage. The long term dissolution of the skilled worker shortage lies chiefly in educational programs that must ultimately be financially supported by the owners, and attitude changes toward the construction industry that must come from all of those involved in the construction process.

However, not all emphasis needs to be placed on owner participation. Employers must also see this shortage as a problem and aid in the retention of skilled workers. Employer-based training is a technique not only for the betterment of the employees but also as an investment for the contractor. By educating workers in-house, these men and women benefit not only by being exposed to additional areas of education, but this also establishes a better job security for these individuals. Merit shop operations also provide a benefit for both the skilled crafts worker and for the contractor in the event of a skilled labor shortage by cross training their workers. This teaches workers more than a single skill or craft and proves them useful for the duration of a given project. Contractors can also offer fringe benefits to retain workers for the long term. Vested profit sharing gives employees more of a personal interest in the company and the company’s performance over time, and it usually leads to higher quality craftsmanship. Overtime pay also offers the possibility of better workforce stability. Although a specific project may not require the additional man-hours and expense, this policy, used wisely, may keep skilled workers tied to that job instead of leaning toward employment with another company who does offer such benefits. Contractors can also combat the labor shortage by helping to improve construction worker image through publicly celebrating the successes of good work. This is not only possible by contacting local news agencies, but it can also be implemented on a national scale through trade organizations and the Construction Industry Workforce Foundation (CIWF) based in Washington D.C. (Federle, Et. al., 1993). Thus, the contractor has certain choices through which they can help to disseminate the craftworker crisis and improve company efficiency.

The entire American construction community faces the problem of the skilled labor shortage. Its complex array of causes stem back twenty years into open shop organization and reach forward to the social and economic problems of today including technological and educational change. The resultant combination of these factors now has created a record low number of master crafts workers employed in the industry and a stigmatized profession that is not being freshly or properly introduced to the high school-aged children in vocational education programs.

In light of the situation, some members of the construction industry have recommended ideas to stop the widening of the labor gap, and some practices have even been implanted to begin the process. The solution is a two phase program that initially halts the immediate workforce shortage then works to repair construction education and the overall image of construction in the public’s eye. The short term repairs are geared to retain adequate workforce levels for individual contractors and localized building groups only. They present a solution too specific to be implemented globally, but the long term solutions show a better hope for widespread correction of the dilemma.

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