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Solving the construction labor shortage means more technology, opportunity, inclusion

7 min read / December 2, 2022 / Staff writer

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Technology, training and the chance to work side-by-side with mentors are all important to the new generation entering the construction workforce.

The construction workforce of the future is at your doorstep. Are you ready?

Baby Boomers are exiting the workforce, Millennials are taking over, and Gen Z is knocking on the door. None of this is news to anyone managing a job-site crew or a construction business. But adapting to this seismic construction workforce shift on top of other challenges — supply chain issues and Covid-19, to name just two — might not be top of mind for you.

It should be. The construction labor shortage is real:

  • While Baby Boomers continue to retire, The U.S. Bureau of Labor Statistics (BLS) estimates that the number of construction job openings for laborers and helpers will grow by 4% through 2031 or 168,500 openings each year, on average.
  • Jobs for construction managers are projected to grow 8% — faster than the overall rate for all occupations – or an average of 41,500 openings each year.
  • In a survey of more than 2,100 construction firms conducted July-August 2021, the Associated General Contractors of America found that 89% of those trying to fill hourly craft positions and 86% trying to fill salaried positions reported having a hard time doing so.

And these trends were established before the $1 trillion federal infrastructure bill, which targets money to rebuild roads, bridges and more.

So, what’s the answer?

First, understand today’s labor pool and how it’s different from the outgoing construction workforce. Despite what you may think, the construction sector has significant advantages in attracting the new generation of talent, and there are tangible steps to leverage those advantages.

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Incorporating technology into the job is important to a new generation of people entering the construction workforce and a key to addressing the construction labor shortage.

What to know about the next-generation workforce

Generally, the two generations after the Baby Boomers (born 1946-1964) and Gen X (1965-1980) are more diverse and digitally savvy the younger they are. As multiple studies and surveys show, they want to work for leaders who care about their well-being. Both seek purpose in their work, look for employers who share their values, and expect to use technological conveniences on the job. They also tend to be job-hoppers.

But after that, the similarities start to break down.

“Millennials were all about finding meaning in their jobs and how best to make the world a better place,” David Stillman told a meeting of the National Asphalt Pavement Association. “With Gen Z coming of age during the recession, they are putting money and job security at the top of the list. Sure, they want to make a difference, but surviving and thriving are more important.”

While groups as vast and diverse as these can’t be labeled uniformly, certain characteristics emerge from surveys and research. Here are some common traits of the two youngest workplace age groups that comprise 46% of the full-time U.S. workforce.

Gen Y: Born 1981-1996

The oldest Gen Y-ers, also called Millennials, are entering their 41st year. They’re coming into their own in the workforce and moving into management positions. But the youngest are still in their late 20s.

In 2016 this age group became the largest generation in the U.S. workforce. The BLS has projected that the Gen Y labor force size will increase by nearly 4.5 million in the 10-year period ending 2029, the largest gain for a single age group. Some traits of Gen Y in the workplace:

  • They are team players and value collaboration
  • They value workplace flexibility
  • They place a high premium on work-life balance
  • They expect to rise rapidly in the workplace

Gen Z: Born 1997-2012

Gen Z currently spans ages 10 through 25, and is just beginning to make its mark on the job market. They are true digital natives who can’t recall when telephones were attached to cords, and there was no world wide web. They are racially diverse: a slight majority (52%) are white, 25% are Hispanic, 14% are Black, and 4% are Asian. Some traits of Gen Y in the workplace:

  • They are independent-minded and hard-working
  • They are highly motivated by financial stability and good benefits, but want interesting work, too
  • They value diversity and inclusion
  • They’re eager for advancement and learning opportunities, and they’re willing to take charge of their career paths
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Technology, training and the chance to work side-by-side with mentors are all important to the new generation entering the construction workforce.

What the construction industry can offer the new workforce

The construction industry has plenty to offer the new workforce, but it will require focused recruitment efforts and, in some cases, a close look at your workplace operations and culture. A Deloitte study about the key issues facing engineering and construction firms in 2022 underscored the point: "Adapting existing talent strategies and forming new talent management and workforce experience strategies could be critical to navigating workforce challenges."

It's clear from the research about generations Y and Z that there are workforce opportunities for the construction industry.

Technology

The misconception that all construction occupations are dirty, physical and low-skilled can be a stumbling block when attracting talent to the construction workforce. But it’s a misconception you can counter. Sure, physical labor in tough conditions will always play a role. But drones, wearables, 3-D modeling, smart machinery and other technological innovations are turning construction into a career that requires technical savvy. Younger workers, especially Gen Z, are attracted by technology. And they are not only comfortable adapting to its ever-changing iterations, they expect it.

Change-agent roles

Studies suggest that Gen Z craves the opportunity to wear many hats, get cross-training, and be valued. Mundane tasks are a turn-off; strategic tasks are a motivator. Giving them a chance to be change agents in workplaces adapting to new technology could be attractive, particularly if given responsibility and meaningful roles. This could also mean a shift in traditional workplace hierarchies. “As the workplace continues to figure out how best to incorporate technology, this generation will lead the way,” said Stillman. “This will not feel natural, as usually it is the older generations to lead the way. However, this is the first time we have the youngest generation as an authority figure on something really important.”

Mobile, mobile, mobile

Whether remote work on a laptop or the ability to exchange data between work sites, the new construction workforce expects to use mobile devices. This new “transboundary” generation will also expect the mobility this technology affords. Bonus: Your perfect candidate might be someone who works halfway across the country but can do the job remotely.

Development and advancement opportunities

The construction industry has the advantage of clear career trajectories for occupations that start at entry-level apprenticeships and then move into journey worker, lead, foreman and beyond. This is an asset to leverage with a workforce eager to keep improving their situations. Internal training programs, mentorships, tuition reimbursement and cross-training will help recruitment and retention efforts.

Stability

Many members of Gen Z watched their parents be downsized when their jobs were eliminated or shipped overseas. They’re tuned in to the value of a stable industry. This is another selling point, given the growth projections for construction job openings.

Diversity and inclusiveness

The new age group expects to see diversity well represented in an organization and a corporate commitment to inclusion. The more your company can do to cultivate this, the more likely you are to attract and retain the next generation of talent.

Corporate responsibility

Gens Y and Z value companies with practices that contribute to the greater good. Sustainability, hunger, climate change and other social causes — companies that take an active interest in these issues will appeal to the new workforce.

Komatsu’s commitment to the future

Komatsu’s role in powering industrial and construction industries worldwide extends to recruitment, training and employee development practices designed with next-generation values in mind. The company emphasizes on-the-job skills training and development programs for employees at all levels. An online learning center offers 24/7 access to hundreds of free, self-paced training courses – a plus for workers who want the flexibility to log in anytime, anywhere.

Komatsu also stresses the opportunities it offers to participate in community volunteerism and work alongside leaders and stakeholders, both of which appeal to a generation that values corporate responsibility and the chance to have a voice. And as a global organization that works with, for, and in many types of communities, it promotes the culture of inclusion and diversity that a younger workforce expects.