How Labor Shortages are Hurting Texas Construction Firms and What AGC is Doing to Help

Written by  Stephen Sandherr

As demand for construction continues to grow in Texas and in many other parts of the country, the fact is the construction industry needs more workers than are currently being recruited and prepared into the industry.

According to the results of the AGC of America & Autodesk 2019 Workforce Shortage survey we released in late August, 80 percent of construction firms responding to the survey report they are having trouble filling hourly craft worker positions, which represent the bulk of the construction workforce. Those shortages are even more severe here in Texas where 84 percent of responding firms report they are having trouble finding craft workers to hire.

And most firms in the Lone Star State expect labor conditions will remain tight. Seventy-six percent of Texas firms report it will continue to be hard, or get even harder, to find hourly craft workers over the coming twelve months. As a result, workforce shortages are having significant impacts on the way firms compensate employees, train their workers and complete projects.

Seventy-five percent of Texas firms report they have increased base pay rates for craft workers because of the difficulty in filling positions. Twenty-four percent report they are providing incentives and bonuses to attract workers. And 21 percent have improved their employee benefits.

Firms are also taking a greater role in developing their own workforce. Thirty-eight percent of Texas firms report getting involved with careerbuilding programs at the high school and collegiate levels. In addition, 48 percent of firms report they have launched, or expanded, in-house training programs because of workforce shortages.

Many firms have also embraced new technologies and new techniques to become more efficient as they cope with workforce shortages. Twenty-three percent of the state’s firms report they are investing in technology to supplement worker duties. And 23 percent of firms report they are using more labor-saving equipment, including drones, robots, and 3-D printers.

Despite all that firms are doing, construction labor shortages have pushed up costs and delayed completion times. Fifty-three percent of Texas firms report that tight labor conditions are prompting them to put higher prices in their bids. And 30 percent of firms report they have put longer completion times into their bids for new work.

Firms can only stretch schedules and alter costs so much before demand for new construction projects is jeopardized. This could hurt broader economic growth by stifling new development and infrastructure projects in Texas and across the country. That is why AGC of America is continuing to advocate for new federal measures to help alleviate construction workforce shortages.

Among the steps federal officials should take is doubling investments in career and technical education over the next five years. Congress and the Trump administration must also enact comprehensive immigration reform that allows more people with construction skills to legally enter the country. And we continue to urge Congress and the administration to include substantial new workforce development programs as part of any new infrastructure.

The Trump administration should also explore ways to support the proliferation of rigorous, highquality construction apprenticeship and other training programs. And federal officials should allow students enrolled in constructionfocused community and technical college programs to qualify for federal Pell Grants.

The bottom line is that construction workforce shortages are a challenge that can be fixed. And this association will continue to do everything in its power to make sure that happens.

Steve Sandherr is the chief executive officer of the Associated General Contractors of America.

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