Skilled Labor Shortage Intensifies; Myths Debunked About Misunderstood Workforce
FMI Corp., a leading provider of investment banking and management consulting services for the engineering and construction industry, recently released two reports: its “2015 Talent Development Survey in the Construction Industry” and “Millennials in Construction – Learning to Engage a New Workforce.” Both reports offer insight into the construction industry.
Talent Survey Among the top findings in the talent development survey are: intensifying labor shortages, a widening gap between employer offerings and employee demands, and a lack of standard processes and frameworks. The survey, taking insights from executives and employees of companies in the engineering and construction industry, presents findings on various aspects of people development, including talent retaining, labor force structure and dynamics, standard processes and frameworks, measurements, succession plans and corresponding company development strategies. The survey examines the challenges and trends impacting the construction industry and identifies the training strategies that are now required to maximize performance and development.
“People development is critical to companies’ future success and ability to stay competitive. It is especially important in an environment of skilled labor shortage and increasing competition.” says Chris Daum, president of FMI Capital Advisors. “Firms need to have strategic and holistic processes in place for recruiting and retaining talent in order to stay viable today and in the future.”
Skilled Labor Shortage Grew Over 30 Percent
One of the leading findings is that skilled labor shortages are intensifying and broadly affecting construction firms. The survey shows 86 percent of respondents reported that their company was experiencing skilled labor shortages, compared with only 53 percent two years ago, a 30 percent increase in the gap. This situation stems from the structural mismatch of labor capabilities and employer demands, as well as the continuing fallout of the last recession. Moreover, the extent of labor shortages is probably more severe than expected and is starting to impact construction firms nationwide.
The survey also reveals an intriguing mismatch where employee engagement is concerned, especially among millennials. Employers surveyed cite offering competitive pay (89 percent), providing an enjoyable work environment (81 percent) and offering training opportunities (76 percent) as the top-three methods they use to retain key talent in the construction industry. Conversely, millennial employees list the top three important factors for keeping them engaged are competitive pay (29 percent), work-life balance (23 percent), and personal development (16 percent).
Other key findings include:
- Companies in the construction industry lack processes to develop and promote high-performing employees.
- Executives and field managers are expected to have the highest attrition rates over the next five years.
- The majority of firms don’t connect training expenditures and performance management metrics.
- Annual performance reviews are a top priority for increasing employee performance and development.
- Having a defined and well-communicated vision is critical to retaining key talent, regardless of age.
The survey offers a roadmap for companies looking to strengthen existing people development programs and build out future talent-retaining strategies. Companies can benefit from developing a firm-wide vision that encourages culture and building project management and field supervision capacity. In the meantime, companies can invest in creating and implementing an effective performance management process.
Millennials in Construction
Findings from the “Millennials in Construction – Learning to Engage a New Workforce” report are based on a combination of survey responses and interviews from almost 400 individuals who work in the construction industry nationwide; half of those participants represent millennials (individuals born between 1980 and 2000). Some of the report’s key highlights include:
- An inspiring and well-communicated vision is critical to engaging millennials long term.
- Seventy-four percent of survey respondents expect to remain more than five years with their company.
- Ninety-six percent of survey respondents are willing to work beyond what is required of them to help the business succeed.
- Ninety-eight percent of survey respondents stated that it was important for them to understand their career path and opportunities within their company.
- Survey respondents listed competitive pay, work-life balance, and personal development as their top choices for staying engaged.
“While the stigma exists that millennials are entitled, disloyal and lazy, it appears that this is not true,” explains Sabine Hoover, content director at FMI. According to FMI’s findings, millennials in the construction industry are indeed very dedicated and loyal to their companies and share similar values as baby boomers and Gen Xers when it comes down to career aspirations, attitudes and goals.
According to the authors, not unlike other generations that enter the workplace, millennials have new perspectives to share, new ideas about getting things done, and new ways of tackling problems. They also want to do more than just punch a clock and take home a paycheck. They are looking to add value, make an impact and find meaning in what they are doing. FMI suggests company leaders leverage these realities by ensuring that younger workers have a clear sense of purpose and an understanding of their roles within the larger plan. The report also provides some practical insights on how to get started with developing a comprehensive talent strategy and a culture of engagement, including specific implications for the young workforce.
Paul Trombitas, research analyst with FMI and contributing author, adds, “Millennials are willing to work hard and put forth the effort when their company provides interesting and challenging work assignments that provide opportunity for career advancement.”
To access the full reports on both surveys, visit fminet.org.