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Investing in the Younger Generation

July 05, 2017

Katelyn B. Gregor, CPA, MSA
Audit Supervisor

The national construction industry is currently facing two conflicting realities.

The construction industry is booming. Ground is being broken on new construction projects across the country at a rapid pace, and—especially if President Trump’s proposed $1 trillion infrastructure investment plan comes into fruition—many in the industry believe that growth will continue.

If the industry doesn’t address its aging workforce, it will struggle to meet the market’s growing demand. We touched on this topic last July, writing that the industry was on the verge of creating a “significant imbalance between the volume of available work and available workers.” Unfortunately, one year later, that imbalance is still a major issue.

According to the U.S. Bureau of Statistics, the construction industry’s percentage of active tradespeople between the ages of 55-64 has more than doubled since 2002, most recently coming in at 22 percent of the industry’s workforce. When you combine that group with workers in the 45-54 age range, you’re looking at close to 35 percent of your entire workforce.

Over the next decade, the majority of that group will begin to retire, which in other industries would be fine. The older generation would be replaced by a new crop of talent, and the professional world would continue turning. But, in the construction industry, that new crop of talent simply isn’t there. The same U.S. Bureau of Statistics survey shows that just 14 percent of the industry’s current workforce is between 19-24 years old.

And that’s the problem.

What happened?

Why aren’t young workers joining the ranks of the skilled labor industry?

Some industry leaders believe that construction jobs have been stigmatized by a growing portion of American families. Many young adults—especially those who come from educated families or grow up in more affluent communities—never consider a career in the trades. They’re taught from an early age that the path to a good life and a financially stable job goes through traditional colleges and universities, not work sites and trade schools. 

Though shortsighted and perhaps unfair, this stigma may have been created from rational roots. Shortly after the Great Recession, it could certainly be argued that construction wasn’t an attractive industry to launch a career. With a struggling economy, many businesses and government agencies put their construction projects on hold, putting many laborers—folks who rely on steady projects in order to earn a living—out of work.

However, that temporary dip in available work has since subsided. According to the National Association of Homebuilders, there are currently more than 200,000 unfilled construction jobs in the United States—a jump of more than 80 percent in the last two years. In Massachusetts alone, according to Construction Dive, there are 14 million square feet of property currently under development or “shovel-ready.”

That tells us two things: 1) The sheer volume of available jobs shows the central point of this article—that the labor industry is facing a talent shortage created by an aging workforce—seems to be true, and 2) The 80 percent increase shows that, since the economy is recovering, the rate of new construction projects getting approved is getting faster and faster.

As the economy recovered, so did the construction industry—and today, especially here in New England, it’s among the fastest-growing industries in the country. More importantly, it’s an industry that is ready to support—and, quite frankly, needs—an influx of young, available talent.

So, what can we do?

How can the construction industry attract young talent?

Those in the industry understand the benefits of building a career in construction. Laborers can earn a solid living at a young age, and then have plenty of opportunities throughout their careers to advance through the ranks. Want to move into management? You can take classes while you’re working (and getting paid) and accomplish that goal. Want to eventually launch your own contracting business? You can learn on-the-job skills and meet necessary contacts while you’re working (and getting paid) and accomplish that goal, too.

So, the question the industry needs to answer becomes: Why aren’t young people aware of these opportunities? And the answer likely begins with marketing.

Industry leaders need to sell their profession as one that is attractive, marketable and financially stable. To do this, construction professionals should make an effort to:

Reach your target audience early: Having a presence at high schools and community colleges is essential. There are plenty of young students who are anxious to start a career but don’t know where to start.

Reach your target audience on their turf: Utilize social media—and even television—to increase the industry’s popularity. Consider what the Food Network has created over the last five years. Not long ago, food service jobs carried a similar unfortunate stigma of being dead-end careers or fallback options for students with bad grades. Now, walk into any elementary school and you’ll find a handful of first-graders who dream of becoming chefs or working in restaurants. The construction industry has an opportunity to use the media to increase awareness about all of the options a career as a skilled tradesperson has to offer.

Finally, take a hard look at your own company: According to an MRINetwork Study, around 40 percent of job-seeking millennials say they value a company’s reputation in the market; however, nearly half of the recruiters polled in the same study admitted their clients had not developed an employer brand that is attractive to millennials. If you want to attract the young workers that your company needs to thrive in today’s economic environment, you need to make sure those young workers know exactly who you are.

For more information or additional questions, please contact Tom Dearnley, tdearnley@blumshapiro.com

How BlumShapiro Can Help

Like your business, BlumShapiro is a hands-on firm with a group dedicated solely to the construction industry. From our work in damage claims negotiations, we have gained insight into the real costs of projects and their impact on a contractor’s bottom line. Numerous clients rely on our professionals for advice on allocating costs in the bidding process to maximize profitable work. Together we’ll work to see that a sound financial plan is developed and implemented to help your business grow and succeed. Learn more about our construction services >>

 

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