3 keys to bridging the labor mismatch in U.S. construction
By McKinsey and CompanyApril 06, 2022
There’s soon to be a lot of work to be done in construction, thanks to the Bipartisan Infrastructure Law which projects $550 billion of new infrastructure investment over the next decade. But who will do it?
According to managment consulting firm McKinsey & Company, the upcoming boom could create 3.2 million new jobs across the nonresidential construction value chain. That’s approximately a 30% increase in the overall U.S. nonresidential construction workforce, which would mean 300,000 to 600,000 new workers entering the sector - every year.
That’s a lot to ask from an industry that’s already struggling to find the people it needs. In October 2021, 402,000 construction positions remained unfilled at the end of the month, the second-highest level recorded since data collection began in December 2000, McKinsey said.
In this environment, wages have already increased significantly since the onset of the Covid-19 pandemic, reflecting intense competition for employees, with employers offering higher pay or other nonwage benefits. Between December 2019 and 2021, construction wages grew by 7.9%.
Competition from other sectors for the same pool of labor is heating up, too. For example, over the same period, transportation and warehousing wages grew by 12.6%. The prospect of higher pay and better working conditions is already tempting experienced workers away from construction and into these and other sectors.
According to McKinsey, there are three key objectives in rebalancing the amount of work and the labor available to perform it. They are: improving productivity, reimagining talent and looking at labor through a strategic lens.
To read the full report, visit McKinsey & Company here.