Construction
Construction’s Looming Workforce Shortage
What the Data Says About the Construction Industry’s Outlook
Construction companies are facing a severe shortage of workers in critical skills, including carpenters, electricians, plumbers, heavy equipment operators, and general laborers. This shortage is exacerbated by rising demand for infrastructure and a widening skills gap in emerging technologies.
Risk Factors
2.7
Labor Supply
A retiring workforce and lagging talent replacement are causing critical labor shortages. Prime-age male workers, who have historically pursued trades, are participating less in the workforce due to societal impacts; physically demanding work and perceptions of limited career growth are also causing young workers to favor college paths over trades.
3.8
Labor Demand
Infrastructure investments, housing needs, and sustainability goals are increasing a moderately high demand for construction workers. Because of the specialized skills needed to deliver these important projects, employers can expect a greater impact from labor shortages, leading to higher wages and more competition for talent.
3.4
Unemployment Rate
While there is some availability of workers in certain regions, the overall market remains tight, especially for specific skills and certifications. Urban areas undergoing construction booms face more competition, while rural areas may have a greater pool of workers, though they may lack the skills for more complex projects.
3.4
Disruptive Skills
There is a moderately growing need for workers who are skilled in new technologies and sustainable practices. The increase of automation helps mitigate labor shortfalls, yet requires workers with the appropriate skills to implement it. Upskilling workers on digital construction, automation, and green building is essential to meet demand.
Methodology
Lightcast has conducted an in-depth analysis of 627 of Fortune 1000 companies across the globe to grade the threat that the shrinking labor force wil have across various industries. To note, the grades are not based upon anything that companies are doing wrong, but instead to demonstrate the external factors impacting the ability of industries to maintain a future-ready workforce in an Increasingly disruptive landscape.
Grading Definitions:
Workforce Readiness Outlook
Labor Supply Grade
The overall score for the top 15 (or fewer) markets. A high grade means that the markets have high volumes of workers, a low grade means that the markets have a comparatively low labor supply.
Demand Grade
Combination of the two scores for working age population and Fortune 1000 job postings and Key Competitor presence. A high grade means that, comparatively, the company is not in markets with a lot of other major consumers of talent.
Unemployment Rate Grade
The overall score for the top 15 (or fewer) markets. A high grade means that the markets have higher unemployment rates which will allow longer periods of hiring into the future without enormous pressure on wages. A low grade shows that the unemployment rate is already tight and cannot handle further hiring going forward.
Disruptive Skills
The balance of skills companies are exposed to that are both hard to tind and expensive to acquire. An imbalanced exposure means having either too many skills everyone wants to hire, or too lew skills that organizations will need to catch up to competitors tor.
Solving Construction Workforce Management
Talent Analyst
Sourcing Construction Talent Competitively
Since construction happens locally, organizations will need to track population demands around residential, commercial, and municipal demand, as well as repair and home service needs, like HVAC. Construction roles also often vary in compensation structures, so benchmarking against the external market to ensure competitiveness and consistency within local markets is important to attract and retain talent. Job titles and skill profiles often encounter inconsistencies in language—standardizing roles with the right prioritization of skills will aid in more effectively recruiting talent.
Data Insights to Inform Market Expansion
A large homebuilder needed geographic and labor insights to target new construction areas for market expansion. Challenged with sourcing skilled candidates, especially in trade roles, the enterprise needed to improve talent attraction by focusing on a competitive framework for compensation and rewards. By using Talent Analyst to understand candidate pools, job roles, and skills to standardize job postings, the homebuilder enhanced pay transparency, recruited more effectively, and benchmark compensation against local markets to competitively attract workers in the target expansion areas.
Talent Transform
Making Construction Jobs Attractive to Talent
Workers need to see a clear value proposition for pursuing construction careers, so employers need to demonstrate that it is a fruitful career path, especially in the more physically demanding roles. Mapping skill paths and offering training and apprenticeships to grow employees’ capabilities yields a greater return on investment, both for the employer and employee. Additionally, identifying opportunities to bridge disruptive skill gaps ensures employers won’t incur premium costs for additional recruiting, and demonstrates that employees in any trade can be a part of the technological future.
Career Pathing for Talent Retention
To solve for employee retention, a construction engineering group needed to standardize and map its internal skill inventory. Using Lightcast’s skills data, it was able to leverage Career Pathways data to guide role transitions, and US Job Postings, Skills, and Titles data to enhance skills growth with targeted learning and development opportunities across 4,000 skills. A standardized skill taxonomy and normalized job titles have created a scalable, repeatable process to map careers, automate skills identification, and support agile career development.
