The primary focus in any construction project is the owner, the entity that pays the bills. But while owners are a diverse and amorphous group, large corporate owners often have been the driving force behind many of the positive changes in the construction industry. In the 1980s and 1990s, it was workplace safety. Now, major owners are focusing on a new pressing concern: shortages in the trades and professions.

For many owners, industry problems are evergreen. Productivity and the speed of construction have been ongoing complaints for decades. “Customers need to get their products to market quickly, but the construction process can’t keep up with this need,” says Stephen Ayers, Architect of the Capitol and president of the Construction Users Roundtable (CURT), a Cincinnati-based owner and constructor group.

Ayers acknowledges that some productivity gains have been made with the increasing use of lean construction methods, along with the growing popularity of building information modeling and its use in aiding modular building and prefabrication. But these gains in productivity have been incremental. “We haven’t seen [the] revolutionary improvement in productivity that we have been looking for,” Ayers says.

Ayers also says a major concern among CURT owners is inadequate design documents. “Designers are not delivering full and complete designs,” he reports. Incomplete or faulty design documents lead to redesign and rework during the construction process, slowing project progress, he says. He says this issue should be a focus for CURT.

The Construction Industry Institute, an Austin-based industry research group, is looking into this issue. CII is researching how to align front-end engi­neering with the construction process, says Wayne Crew, CII’s director. “Front-end design decisions have a bigger cost impact than at any other time in the construction process,” he says.

Workforce Shortages

The U.S. construction market has been growing steadily since the financial collapse of 2008-09. However, during the Great Recession, many workers left the industry and have not returned, and baby boomers are beginning to retire in large numbers, leaving owners worried.

The scope of the problem can be seen from figures recently released by Construction Industry Resources LLC, a Kentucky-based industry research group and home of the Construction Labor Market Analyzer (CLMA). “We found that 11% of current industrial craft workers will reach age 61 in the next two years, and 29% will reach that age in the next 10 years,” says Daniel Groves, CEO of CIR. The CLMA tracks worker availability in the skilled trades, allowing contractors and owners during the planning stages of their projects to assess potential future staffing problems.

Groves says the industry has failed to recruit enough young people. “According to Bureau of Labor figures, over the past 10 years, the number of new entrants into the construction space has decreased by 60%, so the people leaving the industry, either through retirement or to other industries, are not being replaced,” he says.

CII did a recent study on whether the industry has hit a demographic cliff on craft labor that will affect project execution. “We found that we are not falling off the cliff yet, but we can see the cliff’s edge,” says Crew. He notes that the study found shortages of trained craft workers already showing up among the electrical, mechanical and, particularly, welder trades.

The study by CII’s Research Team 318, which was presented at CII’s annual conference in Boston in August, analyzed past projects that experienced craft shortages. The study found that, for projects that experienced moderate to severe staff shortages, the average increase in costs was 17.3%, schedules were extended by 22.4% and the recordable injury rate rose to 0.94 from 0.26 per 200,000 work-hours for a fully staffed project.

Many owners say worker shortages are beginning to show up. “We are not seeing wholesale shortages yet, but we are seeing some in certain skilled crafts,” says Eddie Clayton, manager of contracting and workforce development strategies at Southern Co. He says skilled electricians, boilermaker welders, scaffolding carpenters and insulators are in short supply. “Our contractors are not having a problems supplying bodies for our projects, but we require skilled craft workers.”

On the heavy-civil side, workforce issues are not as pressing but still a concern. John Elnitsky, senior vice president for ash-basin strategy for Duke Energy, is working with heavy contractors to close ash basins. In that market, the issue is less about finding truck drivers and equipment operators as it is making sure they are trained to work efficiently and safely. “Civil contractors are working hard to staff up, but many of them are unused to the level of oversight we require to ensure a safe and productive workplace,” he says.

CLMA is providing many owners and contractors with the information on local and regional trade-labor shortages, causing owners to push for greater participation in the program. “We are launching a pilot project to require contractors bidding on some of our projects to participate in CLMA,” says Clayton of Southern Co.

To encourage industry recruitment, the National Center for Construction Education and Research, Alachua, Fla., in 2014 launched the so-called Contractors Workforce Development Assessment (CWDA) tool, which contractors can use to get a third-party assessment of their workforce development program as well as suggestions for improvement.

“This is the same path we used when owners pressed contractors to make projects safer,” says Greg Sizemore, CURT’s executive vice president. He says owners can now assess a contractor’s safety record through its workers’-compensation experience modification rating. It is harder to develop a rating system for workforce development, but Sizemore says the CWDA is a step in the right direction.

Some owner groups hope this tool will push contractors to be more proactive and effective in recruiting and training young people in the industry. “Making an effective, measurable workforce development program a prequalifier for projects will cause contractors to focus on the problem of worker shortages,” Sizemore says.

However, the CWDA is still in its infancy. Some owners have taken an interest in the program but have not yet incorporated it into their RFQs. For example, Clayton says Southern Co. strongly urges its contractors to participate in the program, but the company is still waiting to see how effective the program is before mandating it. The CWDA “is off to a good start, but it remains to be seen how effective it will be,” adds Elnitsky. In fact, owners’ safety initiatives too years to bear fruit, he observes.

Local Efforts

There are numerous trade-recruitment programs that are showing promise. For example, Clayton says Southern Co. is a sponsor of the Central Gulf Industrial Alliance, Mobile, Ala., which fosters workforce development, training and best practices in the construction industry.

Ayers notes that many state programs have aided in recruiting young people into the industry, notably “Go Build Alabama,” which started up in 2012. Georgia has followed this lead, and, most recently, Tennessee in May enacted a “Go Build Tennessee” program. Administered by a coalition of the Associated Builders and Contractors, Associated General Contractors of Tennessee, Home Builders of Tennessee and the Tennessee Road Builders Association, it will be paid for through the state Board of Licensing Contractors’ surpluses and fines.

But the issue of staff shortages is not limited to craft labor. “We are finding shortages in recruiting civil and geotechnical engineers, as well,” says Elnitsky. He says CURT has worked hard to push engineering and construction-management curricula in colleges and universities to meet this professional shortfall.

Groves notes that shortages in supervisory positions are affecting projects. “Shortages in superintendents, project managers and construction managers have forced owners and contractors to advance younger and younger managers to supervise projects,” he observes. A lack of experience could affect project costs, schedules and safety. “You can mitigate cost and schedule, but you can’t mitigate worker injuries or deaths,” Groves warns.

The industry is facing challenges. But many owners are impressed by the willingness of the construction community to come together to address these challenges. “I am really pleased to see our vendors learn from each other and share best practices, even while competing with each other,” says Elnitsky.