As the construction industry aggressively rebounds, skilled labor shortage concerns continue to rise. Many projects are already feeling the pain of having inadequate skilled trades available for the projects at hand and, until now, industry has lacked an effective way to collaborate and understand skilled labor risks in the U.S. With the amount of large projects underway and in the pipeline, in addition to the baseline demand for skilled labor for small capital spending and maintenance/turnaround projects, it’s time for the industry to work together to address the skilled labor shortage risks.
The Construction Labor Market Analyzer (CLMA®) is a collaborative tool where owners, contractors, labor providers and unions participate to understand their projects’ craft labor shortage risks anywhere in the U.S. Owners provide the demand data through a secure, confidential, anti-trust protected portal and can instantly see which crafts they will need and how they are competing against other projects for those crafts. Contractors, labor providers and unions provide the supply through a secure, confidential, anti-trust protected portal where they can see labor mobility, age attrition and headcount by skill level and region over time. The CLMA tracks 49 different crafts for comparative analysis. Understanding this information in real time allows for the industry to adequately plan for projects using data it can trust.
The nation’s nonresidential construction labor force currently stands at about 5 million workers. While up slightly from last year, it remains down from an approximated 6 million prior to the Great Recession. As reported in the “20/20 Foresight Report” released in May, the CLMA estimates at least 5.6 million skilled workers will be in demand toward the end of this year for planned industrial and nonindustrial projects, rising to 6.1 million or more as soon as next year. Looking ahead, labor demand is expected to intensify and with the CLMA’s five-year pipeline valued at over $3 trillion, a peak of about 7 million workers will be needed by 2018. Nearly all key trades will face rising demand and without an increase in the available supply; a deficit of about 2 million skilled workers will continue to be a major challenge. Furthermore, demands for skilled labor from unidentified construction projects and from continued development in oil and gas may create an even greater shortage.
The Construction Users Roundtable (CURT®) has honed in on this issue quite specifically. In fact, this topic has raised awareness among all members leading to a successful Skilled Labor Shortage Risk Mitigation Summit held recently in Houston. CURT members also developed a white paper on this topic over the past year including options to mitigate the skilled labor shortage risk.
The capacity to know and plan early is a major component of a new CURT initiative — Labor Shortage Risk Mitigation, which is all about the “early actions that owners and contractors can and should take in order to avoid negative impacts on a project (cost, schedule, quality, safety) as a result of regional skilled labor shortages,” said Chris Affuso, associate director at Praxair and co-chairman of CURT’s Handoffs to Construction Committee.
Figuring out a way to alleviate shortages is one reason why Affuso became involved with the Handoffs to Construction Committee. “Focusing on the specific skilled labor needs of an upcoming project and then tackling labor shortfalls in the project planning and execution stages is incredibly important,” said Affuso. “The CLMA enables project analysts and planners to know, with a high degree of certainty, what labor issues to expect during a project.”
“This past spring there has been a severe shortage of labor in our region,” said Eddie Clayton, contracting strategies manager for Southern Co. “Several of our projects have run short but with a tool like the CLMA, we are able to make educated decisions on how we want to handle the shortages. We are better equipped, better able to plan and we are in control of the outcome instead of simply reacting to a situation that was previously out of our hands.”
For more information about the CLMA, visit www.myCLMA.com. For more information about CURT, visit www.curt.org or call (513) 563-4131.
