September 17, 2018

Labor Shortages Continue for Georgia Construction Companies

The construction industry is facing a period of rapid growth. The increase in the number of new projects in residential, commercial, roads, infrastructure and renewable energy has created opportunities for industry companies. The Bureau of Labor & Statistics recently reported that they expect construction to be one of the fastest growing industries with a 4.5% annual growth rate. While this is certainly encouraging news for industry companies including contractors and sub-contractors, it does present an interesting challenge. As many are aware, the increased demand for construction services has made it significantly more difficult for companies to attract and retain skilled hourly labor. According to the 2018 Workforce Survey Results for Georgia, published by the Associated General Contractors of America, 83% of respondents expect to have difficulty hiring new hourly labor. This is reflective of the wider labor challenge and provides insights into hiring trends for 2019. To help clients, prospects and others understand the results and what it means for their business, Wilson Lewis has provided a summary of the key information below.

Key Survey Findings

• Hiring Trends – The survey wanted to understand the expected demand for labor to accommodate new projects over the next 12 months. According to the survey, 79% of respondents will be hiring skilled hourly labor, 46% will be hiring hourly office labor, 73% will be hiring salaried field personnel and 64% will be hiring salaried office personnel. It appears the greatest labor demand will remain for skilled hourly workers. The survey identified that 94% of respondents will be looking to hire skilled hourly labor in the coming year. The high demand means that companies will need to assess their recruiting and retention approach to ensure they are well positioned to attract needed talent.
• Difficulty Hiring – The survey also sought to uncover the level of difficulty that Georgia companies are having in the hiring process for both hourly and salaried employees. According to the survey, 83% of respondents indicated they are having a hard time filling all or some slots for hourly craft positions and 63% with salaried positions. Only 5% of respondents indicated they are having no difficult filing hourly craft positions and 12% with salaried positions.
• Hiring Trends by Position – In addition to overall hiring trends, there was interest in identifying where companies are experiencing the greatest challenge by craft specialty. According to the survey, 79% of companies are having a harder time this year compared to last year filling openings for cement masons, 77% with concrete workers, 75% with traffic control personnel, 73% with plumbers, 71% with carpenters, 69% with mechanics, 60% with pipe layers and 53% with general laborers. Honorable mentions include sheet metal workers, roofers, painters, and ironworkers. It’s clear that as more projects become available, the demand for skilled labor will continue to be a challenge for industry companies.
• Employee Attrition – Beyond the trends, the survey also looked at employee attrition to understand where labor is going once they leave an industry company. According to the survey, 56% of respondents indicated they have lost craft hourly labor to other construction companies while 44% indicated the same with salaried employees. 14% of respondents indicated they have lost craft hourly labor to other industries and 13% indicated the same with salaried labor positions. Based on these findings it’s clear that other industry companies are targeting each other’s labor pool to fill projects.
• Changes to Pay and Incentives – To understand how companies are managing the increased demand, the survey looked at what industry companies are changing about incentives and compensation to enhance retention. According to the survey, 66% of respondents have increased pay for hourly craft workers, 26% offer bonuses and incentives, while 19% have increased the employer portion of covered expenses and benefits. At the same time, 5% of respondents indicated they have not made any changes and have no such plans and 10% have not made any changes but are considering the change.
• Changes to Address Worker Shortages – Identifying what changes companies are making to cope with the worker shortage was another area analyzed. According to the survey, 45% of respondents have initiated or increased employee training, 33% have begun using interns, 24% have increased over time, 21% have changed hiring standards and 33% have made no changes.

Contact Us

The growth in the construction industry has opened the door to new opportunities for many companies while also exposing significant issues such as the labor shortage. As companies seek to win new projects and expand their presence, it’s essential to carefully review hiring practices to ensure you are well positioned to attract needed employees to the company. If you have questions about the survey or need assistance with a construction tax or audit issue, Wilson Lewis can help! For additional information please call us at 770-476-1104 or click here to contact us. We look forward to speaking with you soon.