The most recent recessive economy, coupled with the focused push by our educational system toward 4-year degrees, has left the nation with significant gaps in our craft labor talent pool. By some accounts, the construction industry downsized its personnel by 30% or more compared to staffing levels from a few years ago.
Trends in craft labor recruiting are revealing shortages in a number of key areas. The top five trade workers in demand for the next five years include laborers, heavy equipment operators, carpenters, and ironworkers. At the same time, the top five trade workers that will be hardest to find include: heavy equipment operators, welders (boilermakers), carpenters, pipefitters, and ironworkers.
Human Resource departments must become the prime engine supporting a company’s growth, through effective talent acquisition. This means most HR departments must change the way they are thinking. Our nation’s current skilled labor demands require that they adjust their traditional methods of recruitment and retention to attract the talent they need.
Rick Clevette, Sr. VP Human Resources for M.A. Mortenson Company stated that: “He who controls craft, wins.” This trend is demonstrated by the projected shortfalls in craft labor based on our most recent historical averages. In 2008, 3.8% of the construction workforce was in the oil and gas industry. In 2012, that percentage climbed to 6.4%. It is projected that in 2017, 10% of the construction workforce will be directly related to the oil and gas industry in the United States.
“He who controls craft wins.”-Rick Clevette
The competitive challenges for companies and HR departments are dramatically more challenging than in the past. The need to keep up with labor laws and regulations, record-keeping challenges, skill-specific training, and safety procedures have become prerequisites to a fully qualified workforce. Our current state finds us with a unique segment of workers mired in what many call “Structural Unemployment.” Structural Unemployment is an extended downturn or sudden shift in the economy when the available jobs do not match the available skill sets. Sound familiar?
Contractor business models are beginning to trend toward more self-performing roles within this emerging economy. Contractors who self-perform work have determined that they have a greater ability to control margins and cash flow strategies. In doing so, they have found that the key to successfully implementing this model is a fully trained and reliable workforce. This workforce is crucial to their ability to deliver projects on time and with the quality demanded by consumers. Human Resource teams are finding it increasingly difficult to process an increased number of new employees, indoctrinate them into the safety culture, and ensure they are fully trained and on-boarded—all while aggressively recruiting new talent. An ever-changing economy will only put more stress on HR departments, striving to deliver fully qualified employees in a timely and efficient manner.
Human Resource teams need to keep up with new technologies for processing “paperwork” even as more of this function is being accomplished and stored electronically. Company websites, social media and other electronic recruiting methods are being used to not only to recruit management-level roles but skilled trades positions as well. Companies will need to continue to find ways to embrace various tactics recruiters are using to ensure a good fit between the open position and a candidate’s experience. They will be required to create, or at least have access to, a database that logs prospective hires around the country, and brings HR personnel on board with keeping in touch with these prospects.
There appears to be a growing trend amongst companies to expand the traditional role of Human Resource’s function by assigning or contracting with a dedicated resource to focus on recruitment and retention of trade/craft employees. In order to create the human resources machinery needed to consistently recruit, train, retain and promote the best talent, the HR process must be both systematic and humanistic.
Results from a 2015 FMI Craft Labor Recruiting and Retention Report indicate that some of the most important things companies are doing to promote talent development include:
- Exceptional training and development and increased focus on employee engagement
- Improved delivery and quality of training programs
- Stronger focus on internal and external development, including coaching
- Robust talent management system that prepares for future needs and growth
The upward cycle of growth in construction trade companies requires that recruiting strategies be constantly improving. Additionally, companies are expected to invest in and update the skills of their workforce, helping them advance in their careers. Any company thinking it can wait until the direct hiring needs arise before starting a long-term recruiting plan will be caught napping and find it difficult to impossible to staff their next large project.
SOURCE: FMI Craft Labor Recruiting & Retention 2015 Survey Report
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