California contractors report difficulties in finding hourly and salaried employees, but labor shortage less severe than elsewhere

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agca survey california

California contractors are reporting they are having trouble finding enough skilled and craft labor, though the labor shortage in the state is significantly lower than the national average, according to a survey by the Associated General Contractors of America (AGC) and Autodesk.

The survey shows that 68 percent of contractors surveyed are having “a hard time filling some or all positions” in hourly paid jobs, while 61 percent report difficulty in finding enough salaried employees. This compares to the national average, where 80 percent of construction firms report they are having a hard time filling hourly craft positions that represent the bulk of the construction workforce.

The national survey received nearly 2,000 responses, though the numbers for California — 85 — are below the threshold for true statistical validity.

Association officials said the industry was taking a range of steps to address the situation but called on federal officials to takes steps to assist those industry efforts.

Survey results for California

In California, employers reported the greatest difficulty in hiring installers, plumbers, pipelayers, roofers and crane/heavy equipment operators, the survey shows.  Slightly less than half of the contractors (49 percent) reported they were having trouble finding project managers. About two thirds say they expect the problem will be as severe or greater next year.

“Workforce shortages remain one of the single most significant threats to the construction industry,” said Stephen E. Sandherr, AGC’s chief executive officer. “However, construction labor shortages are a challenge that can be fixed, and this association will continue to do everything in its power to make sure that happens.”

He said all four regions of the country are experiencing similarly severe craft worker shortages, with 83 percent of contractors in the West and South reporting a hard time filling hourly craft positions, almost identical to the 81 percent rate in the Midwest and 75 percent rate in the Northeast. A possible explanation of the somewhat less severe labor shortage in California than other southern states is that it (compared to elsewhere in the south) has a relatively strong unionized market — and in fact 47 per cent of the contractors surveyed indicated they used union hiring halls to meet their labor requirements.

Nationally, 73 percent of firms report it will continue to be hard, or get even harder, to find hourly craft workers over the next 12 months. One reason for their worries is that contractors are skeptical of the quality of the pipeline for recruiting and preparing new craft personnel. Forty-five percent say the local pipeline for preparing well-trained and skilled workers is poor. And 26 percent say the pipeline for finding workers who can pass a drug test is poor.

Labor shortages are prompting many firms to boost pay and compensation. Two-thirds of firms report they have increased base pay rates for craft workers. And 29 percent report they are providing incentives and bonuses to attract craft workers. Firms are also taking a greater role in developing their own workforce. Forty-six percent report that have launched or expanded in-house training programs and half report getting involved in career building programs.

“Construction workforce shortages are prompting many firms to innovate their way to greater productivity,” said Allison Scott, head of construction integrated marketing at Autodesk. “As the cost of labor continues to increase and firms look to become even more efficient, technology can enable better collaboration and ultimately lead to more predictable outcomes. There is also opportunity in untapped pools of talent such as tradeswomen, veterans, and young people looking for an alternative to the traditional four-year university.”

Scott noted that 29 percent of firms report they are investing in technology to supplement worker duties. One-fourth of firms report they are using cutting-edge solutions, including drones, robots and 3-D printers. Meanwhile, 23 percent of firms report they are taking steps to improve jobsite performance by relying on lean construction techniques, using tools like Building Information Modeling and doing more off-site prefabrication.

Even as the industry works to address labor shortages, 44 percent of firms report they are increasing construction prices and 29 percent are putting longer completion times into their bids for new work because of the lack of workers, putting future development and infrastructure projects at risk. Association officials called on the federal government to boost funding for career and technical education. They also called on federal leaders to allow more immigrants to enter the country to work in construction, let construction students at community and career colleges qualify for federal Pell Grants, and make it easier for firms to establish apprenticeship and other training programs.

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