Situation in the Construction Market

Despite some easing of tensions in the construction market, hiring qualified professionals remains a challenge. For the first time since the start of the COVID-19 pandemic, more contractors have reduced their workforce than have hired new employees over the past year. This is the first year since the pandemic when layoffs have outpaced new hires. While some companies are adapting to decreased demand, many contractors continue to compete for a limited pool of skilled specialists.

According to research by AGC and the National Center for Construction Education and Research, 87% of companies still have open positions for skilled trades. Among organizations with vacancies, 88% reported that filling these roles is just as difficult or even harder than a year ago. This situation is forcing contractors to seek alternative workforce strategies.

Developing Internal Talent

One such strategy is investing in the development of employees within the company. A study by the Simplar Foundation, in collaboration with the universities of Arizona, Kansas, and North Carolina, highlights multiskilling—training workers to handle related tasks—as a potential solution to the labor shortage. To complete the same amount of work, companies need 14 to 17 specialists in a single trade or just 10 multiskilled workers. However, trust in employees to take on new responsibilities must be earned, and not every worker is suited to perform all types of tasks.

Acquiring additional skills opens up career growth opportunities for employees. For example, a worker who started as a welder could, after training, move up to a foreman position, then become a construction inspector, and explore new areas within the industry.

To implement multiskilling, contractors are developing training programs from the very beginning of employment. For instance, Ace Electric conducts a week-long orientation at its Ace University training center, covering safety and career development before employees are assigned to their first project.

Holder Construction in Atlanta partners with technical and community colleges to offer five-week training courses. Industry partners participate in the training and provide job placements for participants who successfully complete the program.

Such partnerships between contractors and colleges are becoming increasingly common. In the Alamo Colleges District in San Antonio, a 13-week program introduces participants to construction trades and prepares them for employment. The district is also developing training for current employees, including programs in supervision and leadership.

The Impact of Data Center Construction

The construction of data centers is intensifying the labor shortage. 58% of surveyed contractors noted that these projects have increased competition for skilled workers, and 49% reported rising wage pressures. Another 37% cited a lack of employees or subcontractors as the main challenge in executing such projects.

The scale and complexity of these facilities create additional difficulties in retaining staff. Inexperienced workers can quickly become overwhelmed on billion-dollar construction sites. High turnover is especially common among traveling teams, particularly electricians and their assistants.

Companies report that they sometimes have to turn down new projects due to a shortage of specialists, in order to avoid overextending their teams. For new employees to succeed, they need guidance and support, especially on large-scale projects.

Outlook

Partnership programs and the development of multiskilling are seen as long-term solutions to the labor shortage. It is expected that participants in current training programs will be able to take on leadership roles in the future and contribute to the sustainable growth of the construction industry.