Building Contractors Facing Colossal Hiring Crisis

While most cities angst about a lack of housing to meet demand and many homeowners struggle to find contractors to fix or upgrade their homes, a recent survey shows how dire the situation has become.

A staggering 93 percent of contractors have positions to fill and 91 percent are having a hard time finding workers, according to a survey released last week by the Associated General Contractors of America and Autodesk.

The survey said those engaged in projects are finding it difficult to complete jobs “on time” and that this labor shortage in all types, all sizes and all labor arrangements are a “threat” to the success of recent intended federal spending on infrastructure and manufacturing.

Association officials said in prepared remarks that public officials should have “a vested interest in investing in new construction-focused workforce development programs.”

Ken Simonson, the association’s chief economist, added in prepared remarks that these workforce shortages are “compounding the challenges firms are having with supply chain disruptions that are inflating the cost of construction materials and making delivery schedules and product availability uncertain.”

Pandemic ‘Super-Charged’ the Problem

Elaine Ervin, CPA, Partner, and Construction Practice Leader for Seattle-based Moss Adams, tells GlobeSt.com that labor shortages have been an ongoing issue for the construction industry, but the pandemic “super-charged” the problem as pent-up demand caused project backlogs.

“Contractors have had difficulty attracting individuals to fill construction jobs at all levels within the organization,” Ervin said.

“This emphasizes the need for the industry to develop programs focused on high schools to heighten the awareness of the benefits of careers within construction before students graduate.

“On the customer side, labor shortages and supply chain shortages are causing project delays that are impacting the real estate industry.

“Developers will benefit from engaging a contractor as early as possible in project initiation and establishing communication channels that promote regular and frequent progress updates to work through any issues that may arise from labor or supply deficits over the lifecycle of a project.”

Making matters worse is that most job candidates are not qualified for the positions (77% of firms say) or cannot pass a drug test, AGC said.

Fewer Vendor Options Another Complication

Barry Wurzel, president of Wurzel Builders, tells GlobeSt.com that in addition to finding workers, the material issue is finding qualified and reliable workers and receiving timely pricing so GCs and owners can make timely decisions.

“Slow pricing timelines (qualified estimators and salespeople) and fewer vendor options are both also increasing project costs to owners and delaying project approvals,” Wurzel said.

“And, supply chain issues still exist. The root cause here appears to be driven by the shortage of labor. Manufacturing and transportation are the elements hurting the supply chain. Customs authorities and their ability to process the shipments (shortage of labor) is exacerbating the supply chain delays.”

Other Key Findings

• 82% report projects they work in have been delayed because of supply chain challenges;
• 66.7% said projects have been delayed because of labor shortages;
• 86% have raised base pay rates for their workers;
• 70% have passed along rising materials costs to project owners;
• 58% report owners canceled, postponed or scaled back projects due to increasing costs.