What Does 2018 Have in Store for Construction Hiring?

Construction worker walking on a worksite

Construction hiring demand continues its post-Recession boom, increasing nearly 25 percent between 2011 and the end of 2017, according to the Bureau of Labor Statistics. That growth is predicted to continue through the next decade, with an overall increase of around 11 percent by 2026 overall and more for some occupations — 16 percent for plumbers and 13 percent for construction laborers, for instance.

Industry landscape

There are a number of trends impacting positive predictions of construction growth throughout 2018, experts say. “Some are evolutions of past years, such as offsite construction and an increasing reliance on technology, and some trends are new, such as a focus on resiliency after the most damaging hurricane season on record and devastating fires in California,” notes Construction Dive.

In the broader economy, factors including strong corporate earnings, global economic expansion and high consumer confidence also support the rosy outlook. The Tax Cut and Jobs Act enacted in December 2017 eased the tax and accounting burden on construction company owners, freeing up capital that can be put toward additional growth. And momentum is also increasing to provide funding for the country’s vast infrastructure needs, which has the potential to transform not just 2018 but the next few decades of construction expenditures.

Trends in hiring

“What we’re seeing is a continuation of trends that have driven up demand and tightened the labor pool for years, with the understanding that factors have the potential to become more extreme rather than abating,” noted Ed Gruss, director of divisional operations for Aerotek.

According to a 2017 report by the Associated General Contractors of America, 67 percent of the firms surveyed predicted that it will continue to be hard to find craft workers throughout 2018. With 47 percent saying they had increased their overtime hours to cope with the workforce shortage, many firms also reported a renewed focus on compensation and retention efforts:

  • Increasing base pay rates: 50 percent
  • Providing incentives and bonuses: 24 percent
  • Providing more in-house training: 46 percent

Gruss notes that these efforts are a reflection of today’s reality in the industry: “If you aren’t willing to offer a competitive package of pay and benefits to your workers, you can bank on the fact that someone else will. They’re getting phone calls all the time for construction jobs.”

Invest time in the employee experience

Because of this, Gruss recommends prioritizing the employee experience. “It’s crucial to make sure your workers feel valued, listened to and respected, and that any issues they have are resolved in a reasonable amount of time.”

A 2017 FMI Talent Development Study found that 61 percent of employers surveyed didn’t measure employee engagement, though. Gruss notes that construction firms, often operating with ever-shrinking profit margins as rising material costs and labor shortages continue to negatively impact the bottom line, may be reluctant to carve out additional money for programs that measure and promote employee engagement. However, since around half of a project cost is labor, it makes sense to do what you can to keep that number contained, he says. “Plus, the costs are more interdependent than they may seem. Relying on a workforce that is not engaged can lead to more material cost once waste is factored in,” he explains.

Not to mention, the labor cost can be inflated by the necessity of replacing workers who are vulnerable to poaching by a competitor, a risk that can grow when the human resources department is understaffed or located far away from the jobsite. “To be fair,” added Gruss, “effectively managing overhead costs must be at the top of mind for any successful project, but too much can reap unintended consequences on both labor and material, if you’re not careful or haven’t identified an alternative way to manage your workforce.”

A streamlined approach

The mounting demands and difficult market circumstances is driving a new approach to how construction businesses handle hiring. Many, Gruss notes, are demonstrating an increasing interest in a “one-stop-shopping” approach, pursuing a managed resources solution that covers all personnel activities, from recruiting and hiring to onboarding and performance evaluation. “Construction companies are experts in construction, and for some it makes sense to outsource those non-core responsibilities to recruitment partners who are equally expert in handling human resources services.”

If you’d like to learn more about recruitment or managed resources for the construction industry, contact Aerotek now.