Construction is one of the slowest-growing sectors of the economy. For decades, it has been stuck in a time warp with low rates of innovation and productivity growth. It currently contributes about 4 percent of U.S. GDP and employs about 5 percent of U.S. workers, but those numbers will likely keep falling.
Over-regulation and industry fragmentation have slowed investment in new technologies and skills. And more recently, pandemic-related materials shortages and high interest rates have stalled projects.
Despite facing challenges, promising developments are gaining momentum, and a bright future for the industry is on the horizon. Rising demand for apartments and data centers and new funding for industry and infrastructure are generating high-quality jobs on the kinds of large-scale projects where productivity growth is fastest. That shift is unleashing a wave of innovation that holds the key to overcoming the industry’s most serious long-term challenge: a shortage of workers in the skilled trades.
It is a much-needed change. The construction workforce is undergoing major demographic shifts with seasoned skilled trades professionals aging out and the pipeline of new talent simultaneously shrinking due to younger generations pursuing college degrees and opting for less physically demanding roles. The new wave of high-tech projects presents an opportunity for construction companies to modernize their jobs and address their talent shortages and productivity challenges.
ZipRecruiter, a hiring site used by more than 160 million job seekers, recently analyzed trends in the industry and laid out ways recent innovations could boost job seeker interest in construction roles. While there are plenty of candidates for entry-level construction laborer roles in much of the country, experienced professionals in the skilled trades are in very short supply. To attract and retain top talent, here are some ways construction companies can capitalize on trends ZipRecruiter identified in its 2024 Labor Market Outlook:
- Tech-driven transformation: Tech skeptics often fear that automation and digitalization will cost jobs. But in recent years, the construction sub-industries with the fastest productivity growth, like industrial and multifamily construction, have also experienced the fastest employment growth—largely because some projects must have high labor productivity to earn positive returns and also because more technologically advanced jobs tend to be more interesting and engaging while being safer.
- A wider appeal to talent: Women hold only 14.3 percent of all construction jobs (up from 6.5 percent in 1964), but recent technological advances have coincided with increases in the female share of the construction workforce. Women generally have a lower preference than men for manual labor but are attracted to more technologically advanced jobs that involve operating machinery, surveying properties, or designing and inspecting buildings.
- Higher-quality jobs: According to a recent survey by ZipRecruiter, job seekers with construction skills say they most want jobs that offer career advancement, purpose, opportunities to learn new things, work that is not physically demanding and job security. Large, longer-term, high-tech projects are more likely to have those characteristics and appeal to top talent.
- Evolving job requirements: 81 percent of construction employers say they use skills-based hiring, and 57 percent say they have discarded degree requirements for certain roles in the past year. Job posting data suggests that construction employers relaxed educational requirements during acute pandemic-related labor shortages. While they now have the luxury to be more selective again, lowering barriers to entry and retaining only relevant skill and certification requirements can help companies overcome hiring challenges. Offering apprenticeship programs and tuition assistance can also go a long way toward attracting candidates who are interested in the industry but cannot afford training.
- More comprehensive benefits: In a tight labor market, job posting mentions of employee benefits have risen substantially as companies have sought ways to recruit and retain higher-quality talent. As a result, even lower-wage workers now have access to jobs with well-rounded benefits packages. The fastest-growing benefits in construction jobs include paid time off, retirement benefits and tuition assistance, but rarer offerings—such as pet insurance, fertility benefits, and 401k matches for student loan repayment—can also have an outsize effect on recruitment.
- Opportunities to expand awareness: Employers are increasingly taking to social media and partnering with educational institutions to educate potential candidates about the skilled trades and associated high-paying job opportunities. Apprenticeships, mentorship programs, and subsidies for licensing fees or continuing education are attracting candidates who simply didn’t know about opportunities in the industry, but for whom they are a good match.
- Increased emphasis on diversity: Some of the largest construction companies have undertaken bold campaigns to recruit candidates from untapped and overlooked talent pools. Efforts to build a welcoming environment and highlight its inclusiveness to prospective candidates can go a long way toward attracting women and other groups of candidates who have historically been underrepresented in the industry.
- From recruitment to retention: During the pandemic, when companies needed to staff up quickly, many focused somewhat myopically on recruitment, raising starting pay and offering signing bonuses. There has since been a marked shift toward longer-term thinking and a greater emphasis on retention. Even seasonal industries, like construction, have become less seasonal as employers have sought ways to hold onto their high-performing workers rather than lay them off and face the challenge of hiring and training new workers when business heats up again. Some changes that have boosted retention include more incentives for talented employees to become mentors and managers, more incentive-based bonus pay tied to performance and retention, safer and more comfortable worksite conditions, and the use of mobile scheduling tools that give workers flexibility and scheduling autonomy.
Together, these changes are already modernizing construction jobs and changing job seekers’ impressions of the field. Just as manufacturing has seen a century of evolution, shifting from intensive manual labor to high-tech precision, construction is now poised on the brink of a similar transformation. The result could be the reign of safety and efficiency with exciting new opportunities for career growth and adaptability.