Contract Surety

Painful Labor Shortages


Of course it’s not surprising for anyone in the industry to learn that the annual workforce survey by the Associated General Contractors of America reveals “painful labor shortages” in just about every aspect of construction. Here are some of the facts—and examples of how industry leaders are trying to solve the problem.


Hardest To Fill

Summarizing results of a survey of firms of all sizes by the Associated General Contractors of America (AGC),  For Construction Pros share that 93% are actively trying to fill positions, with 91% reporting “great difficulty” finding skilled candidates, especially for the most difficult roles—“those in the craft workforce that perform the majority of on-site construction duties, typically the most demanding and physically taxing type of jobs.” Toward solutions, according to the AGC:


Many construction firms report they are taking steps to overcome workforce shortages. In addition to the fact most firms have raised pay rates, 45 percent are providing incentives and bonuses and a quarter of firms (24 percent) have also improved their benefits packages.


Construction firms are also getting more involved in preparing future workers for careers in construction. Fifty-one percent of survey respondents—up from 37 percent in the 2021 survey—report they have engaged with career-building programs such as high school, collegiate, or technical school construction programs…Construction firms are also boosting investments in training programs. Forty-seven percent of firms are increasing spending on training and professional development programs, 25 percent are enhancing their on-line and video training capabilities and 16 percent are using augmented and virtual reality technology to better train workers.


Allison Scott, Director, Customer Experience & Industry Advocacy at Autodesk predicts the labor shortage will intensify, given the aging population and sheer volume of people at or near retirement and notes:  “What’s inspiring is that construction firms recognize this and are taking a proactive approach to preparing future workers for careers in construction. The renewed investments in career development and training programs, as well as a focus on digital skills demonstrates that the industry is committed to taking action to build the next generation of the workforce.”


Elephants In The Room?

Bloomberg reminds us just how difficult it will be to overcome the labor shortage: “More than 3 million Americans retired early because of the Covid-19 crisis, new research found. That equals to more than half of the workers still missing in the labor force from pre-pandemic levels.” Suggesting that frequently repeated talking points like “People just don’t want to work”, “Millennials are lazy” and “People make more money on welfare,” “should be rejected flat out,” For Construction Pros also reminds us that the deaths of over 1 million Americans from COVID-19 compound labor gaps. The rising cost of living adds yet another layer of complexity to solving labor shortages. Although pay rates are increasing, they are not keeping pace with inflation or raising the quality of life for workers—especially those involved in the most physically challenging work. For example:


As of August 25, 2022, the average base pay nationally for a worker in a construction sector job was $38,013. In 2020, before the pandemic began, that figure was $37,890. That is only an increase of  0.4 percent. By comparison, according to the Bureau of Labor Statistics (BLS) over the previous 12 month period, ending June 2022, inflation of consumer good increased 9.1%. One way to view this could be in terms of pure buying power. Entry level construction workers are effectively making 8.7% less than they were before COVID-19, and before the current labor shortage and supply chain crisis.

Of course, there are always outliers to these averages, for example: the top earners in the field of general construction work made $45,831 annually, but the bottom end of that spectrum included entry-level jobs, and those lacking experience which made only $31,000.


Thinking Forward

Given the complex layers of challenges involved in building the work force needed for the go forward, construction industry experts agree that increased wages and benefits, more apprenticeships and training opportunities and investing in both technology and opportunities to learn to use it are all high priorities for construction leaders.


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Founded in 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed.