The Building Industry’s Next Generation of Workers
We already know the building industry in 2023 can’t find enough workers. Now, imagine the same situation persisting well into the years ahead. Without dramatic change today, that’s exactly the future we face.
Compared to the workforce in all industries, construction has a smaller share of younger workers. The most recent data shows that 8.7 percent of construction workers were 20 to 24 years old, far less than the employment share of this group in all other industries. Gen X represents a smaller generational group than the Baby Boomers. The share of workers ages 55 and older is over 20 percent in construction. That indicates that a substantial portion of the workforce could retire in the near future, highlighting the need for more efforts in attracting talent in the industry.
740,000 new workers are needed by the building industry nationwide this year alone. That is the estimated number of new workers required to keep up with housing demand, according to the Home Builders Institute’s (HBI) Construction Labor Market Report compiled by National Association of Home Builders’ (NAHB) Chief Economist Robert Dietz and his economics team.
That means the industry would have to train and place approximately 2,500 new workers every single working day this year—and again next year —just to keep up.
Think about that: 2,500 new workers every day for the next 48 months. For perspective, look at the limits of what we can do as the nation’s leading nonprofit provider of trade skills training and education for the building industry.
At the Home Builders Institute, we support 625 programs across 49 stales providing pre-apprenticeship training and certification programs to middle and high school students, transitioning military and veterans, unemployed and displaced workers, low-income and opportunity youth and justice-involved youth and adults.
Through new training academies, Job Corps programs, expanded curriculum in more secondary schools and other initiatives, we’re expanding offerings every month. Still, producing 10,000 HSI-trained graduates is a good year for us.
The lack of construction workers goes back a long time. It pre-elates the general labor shortage currently plaguing nearly all industries. The construction worker shortage is the result of a societal bias against so-called blue-collar work, one that is a decades-long phenomenon. Misperceptions, absorbed as truth by generations of young people, have obscured the dignity and opportunities inherent to careers in construction.
Perceptions are changing, but not fast enough. It’s true that with high student debt and low-paying postgraduate jobs, many secondary school students are deciding the four-year college track is not for everyone.
But without an industry-wide effort to attract them, they will look elsewhere. The availability of technical education programs that take students weeks not years to get qualified—in many cases at no cost to the graduate—gives our industry a
big advantage.
But it’s only a start. The gulf between the labor supply we need and the labor supply we have is unsustainable. It’s time to act. 2023 is the year to identify new talent, recruit from non-traditional labor sources, create business models that make construction jobs more attractive and advocate for more trades training and education in local communities.
To stay competitive in the labor market, we undoubtedly will see workers’ total compensation increase. But remember: a skilled worker works better and faster, and increased productivity means higher margins.
That’s a hard argument to swallow when most economists are saying conditions could likely worsen before improving. In fact, that’s exactly why now is the time to train. Housing is currently experiencing a severe slowdown. But pent-up demand will remain high. Once things stabilize, housing demand will need to be met.
The United States continues to suffer a housing shortage of at least I million units. The labor shortage is one of the single greatest obstacles the industry faces in shrinking that gap. It’s our job alone to close that gap. Together we do what we do so that Americans have places to call home that they can afford.
Our job in 2023: to build the next generation of skilled workers for our industry. And create a construction labor force that will help protect homeownership and housing for families in the United States in the years to come.
Ed Brady is President and CEO of the Home Builders Institute, the nation’s leading educational resource for career technical education in the building industry. HBI provides its students with the skills and experience they need for careers in residential construction. Learn more at hbi.org or (202) 371-0600.