Navigating the Construction Labor Shortage

People that watch the calendar know that November 11 to 17 was National Apprentice Week in the US. It’s a time to focus on the next wave of workers coming into the industry. But for those who build things for a living, there was some heavy subtext that went along with Apprentice Week. 

Right now, the construction industry is facing a crippling labor shortage. And according to the Associated General Contractors of America (AGC), 80% of contractors in the US can't find qualified workers. That’s a national average. In some regions, the number is higher. “There aren’t enough carpenters,” says Ryan Ware, Vice President of Construction at Vantis in Santa Clara, California. “There aren’t enough electricians. There aren’t enough plumbers. You get a painting crew on-site and it’s a crew of a couple of people to paint an entire building. 

When it comes to new talent filling the void, young people just aren’t considering the world of construction. They have been conditioned by their parents to think it’s archaic. Even dangerous. And in a connected world where technology reigns supreme, a lot of high school and college grads are looking for jobs that tap into that. Tech-related companies are a draw for those entering the job market. And conventional construction doesn’t have that reputation. 

Those left on the job site are facing burnout as they have to do more with less. And clients are paying for it. With fewer people to do the job, prices go up and schedules get longer. Forbes has reported that construction wages are up 3.8% year over year, but that stat doesn’t tell the whole story. According to Mike Iannone, the director of constructability at DIRTT, it impacts the whole industry. 

“Large contractors that pay top price are getting the available work force,” he says. Due to the shortage, general laborers in Seattle are earning up to $100/hour. Between two to three times what it used to be. With uncertainty being the only certainty, contractors are artificially padding their schedule to ensure delivery. 

“Project start dates are getting pushed back. It’s always been typical, but it’s starting to happen on a much greater magnitude,” says Iannone. “They may have had 15 electricians, but because that contractor is working on multiple projects, there’s only six electricians the next day. If you’re doing a 2,000 square foot commercial tenant improvement project, it could be very difficult to find someone to do that in a timely manner.”   

Now smaller companies can’t afford those higher rates for labor. If they can find someone to fill the position, they often have less experience. “You have a gap in training,” says Ware. “You have a loss in ability.” 

It’s like the old saying, they just don’t make ‘em like they used to. A less-skilled labor force can’t make complex buildings. The cost and intricacy are too great. “So, we’ve lost quality which makes the architecture simpler,’ says Ware. 

And the trickle down is even more troubling. Spaces are less impactful. Projects are downsized. Upgrades aren’t happening. Talent-driven companies can’t recruit in the way they want. And they can’t retain. “Their jobs are to recruit the best talent they can and conventional construction can’t provide the spaces that they need in order to benefit our economy,” says Ware 

All this to say, the effects of the labor shortage are huge. And wide reaching. It’s got everyone trying to figure out how to fill the gap. 

There isn’t just one way to find a solution, but Ware says off-site construction is a leading choice. Prefabrication streamlines the process by putting the bulk of materials and labor in the same place. Interiors are built in a factory and assembled on site. A 2019 report from McKinsey puts the cost savings of off-site construction as high as 20%. And the time savings as much as 50% compared to conventional means. According to Iannone, it’s a method that’s poised for a huge expansion. “Contractors now have to face up to the fact they’ve got to get more done with less people,” he says. “The more that they can bring to site that requires less labor to assemble, the better.” 

DIRTT is a great option to alleviate the pressures of this labor shortage. Prefabricated DIRTT walls takes less time to install and fewer people to do it. And because it’s a multi-trade solution, it becomes even more efficient. 

“It picks up speed from framing to finish,” says Ware. “If we can tilt all the frames and get an inspection done immediately and start installing the finished faces of the system, we have just eliminated numerous stages that would have been done in the conventional process. 

Take the electrical impact for example. A DIRTT solid wall ships with electrical already inside. “You need fewer electricians on-site for fewer days,” says Iannone. “We don’t need people to get into our wall to put stuff in. In a conventional build, every piece of conduit and wire is cut and done by hand on-site. From a structural standpoint the people who are doing framing and Sheetrock are focusing on core-and-shell rather than offices and corridors and conference rooms. So, you are seeing a scope reduction… that is significant enough to allow them to take on projects with a much smaller skilled workforce.” 

“If you can reduce your electrical, flooring, framing, and sheet rock labor because DIRTT is being employed, it reduces the labor burden on the general contractor,” says Iannone.   

The construction labor crisis is going to take some work to fix. But according to Ware, it’s not impossible. He says a part of finding the solution is changing the way we think. And a new wave of apprentices and a new way of doing things could be just what it takes. “We are so stuck on what’s been done in the industry,” says Ware. “We need students to go to the what ifs.” If we do that, we’ll be able to build our future. 

“Let’s stop saying there’s a problem and start saying these are the solutions to address it,” says Ware. “What are we truly capable of doing?”