Why Construction Companies Should Lean Into Diversity, Equity & Inclusion

The construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor, according to Associated Builders and Contractors. In 2024, the industry will need to bring in more than 342,000 new workers on top of normal hiring to meet demand, and that’s presuming construction spending growth slows next year.

Hiring struggles have employers in all industries looking for answers. One potential solution is focusing on diversity, equity and inclusion initiatives.

 

The Associated General Contractors released a report in 2018 that outlined six arguments for why a company should include diversity and inclusion as a key business strategy. Among those arguments were that diversity and inclusion can: positively impact a company’s profitability by improving productivity; create a safer workplace; and, help companies recruit and retain top talent.

According to data from the U.S. Bureau of Labor Statistics, employed citizens broke down like this in terms of sex, race and ethnicity: 77% white, 46.8% women, 12.6% black and 6.7% Asian. 

In construction, the workforce wasn’t nearly as diverse. Of 11.8 million construction professionals, 87.3% of the workforce in 2022 identified as White, 10.9% Women, 6.7% Black, and 2.1% Asian.

“It’s critical for the construction industry to consider diversity as more than a checkbox when considering their workforce,” said Josh Miles, Regional Business Development Executive and Construction, Environmental and Energy Divisional Lead at Aerotek. “Increasing diversity and inclusion is not only of human interest, it’s of business interest and can be a real needle-mover for companies looking to attract, train, retain and build their workforce in a very competitive labor market.”

Job Listings and Gender-Coded Language

Improving diversity, equity and inclusion in the construction industry starts at your first contact with talent in recruitment. 

Sometimes an employer can have great intentions, but remove itself from competition with only a improperly worded job listing. Removing gender-coded language -- words or phrases readers may associate with a particular gender -- from job descriptions can help make opportunities more appealing and welcoming. This could include words that connote masculinity or femininity, or industry terms like “tradesman” and “journeyman.” 

“The consequences of using gender-coded language show up in the applicant pool’s diversity and, therefore, diversity of new hires,” writes Kim Robinson, SHRM-SCP of the Employer’s Council. “Another impact is increased costs per application and an overall negative impact on the employer’s brand. Consider the results Goldman Sachs realized when they removed the word “aggressive” from their ads. Hiring women increased dramatically, one outcome of which was ultimately a workforce of 50% women.”

How To Be A Model For Inclusion

Studies show diversity, equity and inclusion helps improve employee satisfaction. Increased satisfaction leads to increased performance.

Based on an examination of 1,875 firms including some of the world’s largest companies, Morgan Stanley reported in March 2023 that those companies with greater gender diversity outperformed less gender-diverse firms by 1.6% in 2022.

A McKinsey study in 2019 showed companies in the top quartile for racial and ethnic diversity are 36 percent more likely to have financial returns above their respective national industry medians.

The same 2019 McKinsey study showed companies with more than 30 percent women executives were more likely to outperform companies where this percentage ranged from 10 to 30.

Giving employees someone to look up to who looks like them makes it easier for employees to envision themselves in higher roles. When that is possible, retention is easier because they feel career advancement is possible and they gain a sense of belonging.

DEI and Belonging (DEI&B)

Cornell University defines belonging as a feeling of security and support when there is a sense of acceptance, inclusion, and identity for a member of a certain group. Put more simply, Susie Lee of MIT Sloan Management Review wrote that one leader in an executive search firm said: “Diversity is a fact, inclusion is a behavior, but belonging is the emotional outcome that people want.”

A recent McKinsey report showed the top three factors employees cited as reasons for quitting were that they didn’t feel valued by their organizations (54 percent) or their managers (52 percent) or because they didn’t feel a sense of belonging at work (51 percent).

According to Sensu research in 2022, 31% of Gen Z said they will choose to work for employers that proactively prioritize diversity and inclusion in their workforce, compared to 11% of Gen X.

With four in 10 Gen Zs and nearly a quarter of millennials considering leaving their jobs within the next two years, according to a 2022 Deloitte study – now may be a good time to start thinking about diversity, equity and inclusion in your workplace.

Where Can My Company Start With DE&I?

If diversity, equity and inclusion is important to you, but you are struggling to identify where your company is on your DE&I journey, Construction Inclusion Week’s DEI Maturity Model Assessment is a great place to start. 

When you need staffing and services support, contact us to learn more about how Aerotek can help you build a workforce with inclusion in mind.