As we enter the final quarter of 2023, the construction industry is experiencing significant shifts in its hiring landscape. After enduring several challenges over the past few years, especially pandemic-related disruptions and supply chain issues, the construction industry is tentatively showing growth and resilience. Let’s look into some of the challenges the construction industry faces in Q4 and what the landscape might look like going into the new year.
Rising Demand for Construction in Q4
For construction in Q4, one of the most prominent trends in the industry is the increasing demand for skilled labor. Since 2020, the growing labor gap has created a desperate need for workers, and the gap is not closing. The construction industry will need to hire over half a million additional workers to keep pace with the expected hiring and to keep up with demand. In 2024, the construction industry will need to hire 342,000 new workers alongside regular hiring to meet industry demand. This is under the assumption that growth in the construction industry slows down. As a result, there is a pressing need for experienced professionals in all trades, especially construction.
Aging and Retiring Workforce
A significant contributing factor to the rising demand for workers is the current construction workforce is starting to retire. This trend we’ve been seeing all year, but construction in Q4 is getting hit especially hard. 1 in 4 construction workers are older than 55, meaning the current workforce is slowly beginning to whittle away. These experienced workers are taking their knowledge and training with them, putting additional strain on the industry. They’ve had decades to hone and refine their skills, making them more productive than newer workers. So, while older laborers are retiring, new skilled workers cannot replace them adequately.
And yet, working in construction in Q4 is one of the best times, financially. Pay is booming, and plenty of overtime hours and work opportunities exist.
On August 8th, the U.S. Department of Labor (DOL) issued a decree stating that the prevailing wage standard for construction workers would be raised. This rule would immediately impact an estimated 1 million workers and increase due to several federally funded infrastructure projects.
Cultural stigmas make people hesitate to enter the construction industry despite the pay increase. We’ve raised a generation of workers, telling them they are worth more than construction, stigmatizing a job industry, and steering people away. Now, we’re starting to feel the ramifications of that, although it has been increased by the disruption of 2020. Construction is not seen as an appealing career path for the younger generation, a big hurdle the industry needs to jump if they want to foster interest in it.
Diversity and inclusion are gaining prominence in the construction sector.
The U.S. Chamber of Commerce has been a vocal supporting factor for investing in diversity and inclusion. This push for diversity enhances the industry’s social responsibility and brings fresh perspectives and ideas to construction projects. The Bureau of Labor Statistics released statistics about who is making up the construction industry. 9.9% of construction professionals are women, 6.2% are African American, and 2% are Asian. Initiatives to grow these numbers and make the construction industry more diverse would go a long way toward closing the labor gap. Efforts to promote diversity and inclusion include Construction Inclusion Week, October 16th-20th.
In Q4, the construction industry is rebounding from the challenges of the past few years with a renewed focus on growth and innovation. The demand for skilled workers and raised wage rates have increased opportunities for career advancement. However, the widening gap in labor and retirement of the most skilled continue to spout the industry. Should the sector be able to fill the hole in labor, the overall state of hiring in construction continues to look promising, with an abundance of opportunities for skilled, adaptable, and committed to the industry’s continued growth.
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