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Housing’s Great Rethink: Workforce Development Takes Center Stage

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Business Management

Housing’s Great Rethink: Workforce Development Takes Center Stage

To refill the construction labor pool from the fallout of the Great Resignation and combat the skilled labor shortage, home builders must adjust their approach to attract and retain a skilled workforce


By John Caulfield December 7, 2022
Yellow hard hat hovering above blue button-down shirt with no construction worker visible
The Great Resignation could have been ideal for home building—an industry desperate for more workers—except builders weren’t prepared to capitalize on so many people in motion. | Image: oz / Eric hood / stock.adobe.com
This article first appeared in the November/December 2022 issue of Pro Builder.

In 2021, frazzled by a pandemic that restricted and uprooted their workplaces and lifestyles, a jaw-dropping 47,845,000 Americans voluntarily quit their jobs, according to the Bureau of Labor Statistics (BLS). Through the first seven months of 2022, the job quits rate was on track to hit another 44 million for the year.

Demographers, sociologists, and political pundits have searched for answers to explain what hints at a mass rejection of the conventional work ethic and a rupturing of the relationship between employee and employer. These exits weren’t just about compensation, either. “Pay is important, but two-thirds of the reasons people actually left jobs in 2021 were due to issues related to their engagement and their overall well-being,” Jim Harter, chief scientist of workplace management and well-being at Gallup, told Fast Company last March.


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The so-called “Great Resignation” (among other names) seemed an ideal scenario for a home building industry with an insatiable appetite for more workers ... except builders and contractors weren’t prepared to capitalize on so many people in motion. There is also the hard fact that construction hasn’t been a top-of-mind career path for most workers for a generation or more. Truth be told, the industry has been complacent to ineffective in promoting the opportunities it offers.

Other Forces Eroding the Construction Labor Force

The construction industry is also dealing with what has been a 25-year erosion of vocational training and in-school programs, as well as some bitter critics from within its own ranks who effectively shrink the pool of (mostly younger) workers by dissuading them from considering construction jobs as an avenue to job security and fulfillment. “Low pay, no training, high stress level, crappy working conditions, and idiotic PMs, GCs, and customers, not to mention that the only way to make more [money] is to work yourself to death on overtime,” voiced a viewer of “Inside Construction’s Skilled Labor Shortage,” a video Pro Builder produced and posted to YouTube last year. “Why would anyone with a choice put up with that BS?”

The construction industry is also dealing with what has been a 25-year erosion of vocational training and in-school programs, as well as some bitter critics from within its own ranks who effectively shrink the pool of (mostly younger) workers by dissuading them from considering construction jobs.

To counter such claims and reclaim construction’s place as a viable, valuable long-term employment option, a growing number of builders, trade groups, and affiliated workforce entities have taken aggressive steps to at least put themselves in the running for workers seeking greener pastures than the hospitality, retail, and food service industries.

“I think the construction industry is on the verge of gaining traction” to meet its workforce needs, says Scott Thorson, COO of Oakwood Homes, headquartered in Denver, whose training-to-placement academy offers one such blueprint (see “Workforce Development Programs,” page 40).

Why Are So Many People Quitting Their Jobs?

To be sure, pandemic-driven stimulus relief payments and programs, more generous and extended unemployment benefits, mortgage and rent payment forbearance, and eviction moratoriums—not to mention lockdowns across almost every industry and the threat of catching a deadly virus—contributed not only to workers reexamining their values but also ushered in a period of greater (if temporary) financial flushness.

Early analyses found this quitting phenomenon to be most prevalent in the high-pressure technology and health care sectors, and among workers aged 30 to 45. Lower-paying jobs in the retail, food service, and hospitality sectors also were roundly rejected or, in the aftermath of the pandemic, rarely reconsidered.

Two Harvard Business School professors, Joseph Fuller and William Kerr, point out in a recent paper that the quitting trend had actually preceded the pandemic, rising steadily since at least 2009. “What we are living through is not just short-term turbulence provoked by the pandemic but rather a continuation of a long-term trend,” they wrote.

Other market watchers also questioned why, if people were leaving jobs in droves, was the job market still so tight, with unemployment rebounding from 10% or more in the early days of the COVID pandemic to about 3.5% as of September 2022?

Home building efforts to refill the construction labor pool
In manufacturing and construction—industries that generally pay well—quits outnumbered swaps, according to the Federal Reserve Bank of St. Louis. | Image: oz / Eric hood / stock.adobe.com

“The Great Resignation isn’t a dramatic shift in worker sentiment,” wrote Derek Thompson in The Atlantic. “It’s a dramatic shift in worker opportunity,” which reveals a common craving for greater control over work and life.

As to where they went after quitting, the latest BLS and Census data points to more job swapping within the same industries, generally a one-to-one correlation, especially in high-paying industries such as technology, finance, and media. In manufacturing and construction, however—industries that generally pay well—quits outnumbered swaps, according to the Federal Reserve Bank of St. Louis (FRBSL).

In part, that may be due to average nominal wages in both industries actually declining 2% in 2021 when adjusted for inflation, while those for job-jumping leisure-industry workers increased by 6%. “The larger the increase in job-to-job transitions, the larger the wage growth,” the FRBSL
report concluded.

“The last year brought less giving up and more trading up” to opportunities that not only paid better but provided more work-life flexibility, broader benefits, and more job security, according to an article in The New York Times this past May.

If there is one bright spot in all of this for the housing sector, it’s that a growing number of quitters are seeking nontraditional roles outside of an office environment or to start their own business—two tenets of a career in construction.


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Can the Construction Industry Take Advantage?

Many states allowed construction jobsites to remain active during the pandemic, and the industry benefited from that: From March 2020, when the pandemic was declared, to August 2022, the number of residential building and specialty trade contractors increased 7.9% (or by 232,600 workers), according to BLS data.

“That was huge, and it made some people ask questions and rethink their original career choices,” says Brian Turmail, VP of public affairs and strategic initiatives for the Associated General Contractors of America (AGC). He notes that AGC members had been adding workers steadily over the past 18 months, even as the quits rate for residential and commercial construction ranged from 130,000 to 248,000 per month—a rate of roughly 3% in August 2022 and second only to retail (3.6%) and leisure and hospitality (6.1%) across the industries that BLS tracks.

In its fall 2022 report on Construction Labor, the Home Builders Institute (HBI)—the educational arm of the National Association of Home Builders (NAHB)—projects the number of job openings in the overall construction industry (encompassing residential, commercial, retail, industrial, etc.) will be 740,000 per year to meet expected construction expansion through 2024, a figure based on NAHB’s analysis of BLS data and projections.

“What’s different now from the late ’90s and early aughts is there’s more awareness of how great this industry is to work in.” —Mark Matyanowski, president, MatchBuilt

How much actual people power the residential sector will need is less clear, but it is obvious that home builders, specialty contractors, and their trade groups can’t let another generation of workers slip through their fingers; as such, they are intensifying their recruitment and training efforts into colleges, high schools, and even elementary schools to alert younger generations to the job and career opportunities home building offers.

“What’s different now from the late ’90s and early aughts is there’s more awareness of how great this industry is to work in,” says Mark Matyanowski, president of MatchBuilt, an Indiana-based recruiter that connects talent with home builders. “There are so many ways you can go to earn a really good living, and you don’t have to go to college.” Adds Ed Brady, CEO of HBI, “The carrot of
entrepreneurship is a big incentive. We need to promote opportunity.”

Housing’s Great Rethink: An Industrywide Effort to Attract Workers

Hiring is one thing, holding onto workers is another. If ever home building needed a “Got Milk” branding moment, it’s now.

During a press conference at the International Builders’ Show last February, Brady labeled housing’s chronic labor shortage “a long-term structural crisis” that would require home builders to make fundamental changes in the way they do business. He called for an all-hands, industrywide effort to bolster training, compensation, diversity, and productivity.

Toward that end, HBI advocates hiring more women and people of color into the trades, both of which are sorely underrepresented in the field; compensation that’s adjusted to the industry’s cyclical nature and includes a broader range of benefits; financial support for trades training at the middle and high school levels; a national visa program to spur legal immigration specific to the construction sector; and greater use of online learning tools.

And, as a result, to appear to be doing more than trying to fill a 50-gallon barrel using an eye dropper. “This industry has to work together,” says Branka Minic, CEO of Building Talent Foundation, an Orlando, Fla.-based organization dedicated to addressing the construction worker shortage. “It can’t be solved with everyone playing in their own sandbox.”


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An increasing number of home builders, industry trade associations, privately funded organizations, schools, and others are actively and aggressively working to fill the ranks of skilled construction labor. Find out more about these efforts and how you can get involved


 

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