The widening labor shortfall in the US construction sector could affect the infrastructure upgrades

There is a historic construction labor shortage in the country that is threatening to get worse at the moment. Around 440,000 job openings in the US construction industry as well as more than one million openings in the manufacturing industry seen in April are the highest since industry-level job data collection started. If the situation persists, we will have a challenging time filling the additional jobs that will arise through the Bipartisan Infrastructure Law (BIL) every year.

The BIL aims to increase labor demand. All projects are relying on a chain of companies spanning multiple sectors such as engineering, materials fabrication, distribution, freight, and construction. If materials or labor is scarce anywhere on this chain, it will cause delays in projects leading to costs hikes and downscaling. Thus, a labor shortage in the construction sector will affect a lot of other sectors of the US economy.

There are multiple causes behind the labor mismatch:

• baby boomers leaving the workforce
• a record number of quits as people prioritize their personal lives
• slowed-down training programs
• low net migration

Although the reasons vary, the result does not. There are not enough workers to fill the available vacancies. The jobs being created in the future too will have almost no workers to take them up. Amidst this situation, employee wages are rising.

So, how can we address this potential labor shortage? Though the situation seems unfavorable, a few broad actions could help dissolve the issues at hand.

Companies could increase the supply of construction labor by reskilling and upskilling existing workers to fit the targeted roles. Employers could also expand their candidate pools by hiring workers from nontraditional segments such as veterans, previously incarcerated individuals, etc. Recruiters can also employ approaches such as offering nonwage benefits, allowing flexible work schedules, and starting apprenticeships at younger ages to attract new workers to the industry.

Improving the productivity of the entire value chain will also have a favorable effect on the situation. Incorporating technology into projects is vital. Technology will have an impact on digital design, automation of material production processes, transparency of material performance, earlier decision-making, professionalization of procurement, and job site management.