Battling Labor Shortages and Employee Turnover in the Design-Build Industry
Low unemployment plus high growth equals trouble finding top talent. It’s an equation that will hold true for the foreseeable future.
The Bureau of Labor Statistics (BLS) indicates the unemployment rate among people 25 and older with a bachelor’s degree or more, was 2.1 percent in April — a decrease from the same time period in 2017. In construction the problem is compounded by specific project requirements, skills, experience and certifications.
Growth for commercial construction is expected to rise 16.4 percent in 2019, while industrial construction is expected to realize a 10.6 percent increase, according to economists at ConstructConnect, Associated General Contractors of America (AGC) and the American Institute of Architects (AIA). Associated Builders and Contractors, Inc. (ABC)’s most recent Construction Confidence Index reported “abundant confidence regarding sales and staffing levels for the next six months.”
With growth comes the challenge of attracting, recruiting and retaining qualified and experienced managers and skilled workers for all aspects of the design and construction industry, in both the office and the field. The ADP Workforce Vitality Index reports that the high turnover rates among employees are indeed one of the major problems facing design and construction companies today. Job turnover for the industry averaged 54.4 percent during the first quarter of 2018, which is higher than four other industries tracked.
When employees change jobs, the cost borne by design and construction companies, in particular, is significant and includes hard costs such as hiring resources and training and development, as well as the possibility of intangible costs resulting from the loss of relationships both inside and outside of the company.
A Design-Build firm’s workforce is often considered its most valuable resource. As the Design-Build project delivery method continues to increase among owners, this will further necessitate the importance of having a trained and experienced team of individuals who understand the importance of positive collaboration between design and construction, who share a common and vested interest in the success of the project, and who possess the unique skill set specific to the design-build industry. Furthermore, retaining these individuals becomes paramount to ensure consistency in project delivery among clients and markets.
To address these growing issues, the best Design-Build firms find success, and even reach a level of peak performance, by adopting a long-term strategy while taking the following steps:
- Investing their resources in focused recruitment efforts at both the university and vocational school level, as well as creating and implementing specific training and leadership development programs for all employees.
- Seeking and creating opportunities for individuals, not only to build industry experience, but to also provide both a personal and professional growth and development path.
- Establishing and maintaining relationships with select and preferred vendors and suppliers who share these same philosophies toward focused recruitment, specific training and personal career development.
The industry difficulties related to a shortage of qualified talent and labor in the Design-Build industry will not be going away anytime soon. However, the firms that choose to adopt a long-term approach, and take the proactive steps to attract, develop and retain this talent, will ultimately deliver the best projects for their clients.
Dan Crist is Vice President of Operations for A M King.