March 18, 2019

Opportunities for Georgia Construction Companies Abound

Construction companies in Atlanta and across Georgia struggled in 2018 to manage workforce shortages. Almost three months into 2019 it is apparent this challenge has not weakened the demand or appetite to pursue growth opportunities. According to the 2019 Sage Construction Hiring and Business Outlook Survey, 77% of national survey participants are expected to increase their headcount, while 88% of Georgia survey participants are expected to do the same. Although the expected increase in demand is certainly welcome news, it does come with the challenge of attracting and retaining labor. In fact, 78% of national survey participants are having difficulty filling positions, while 75% of Georgia participants are facing the same. This dichotomy of increasing opportunity versus a limited labor pool has forced many companies to look for ways to maximize their production ability. The results of the survey provide insights not only into expected growth trends but also into how Atlanta construction companies are solving this unique puzzle.

About the Survey

The Georgia survey findings are based on results from 55 industry companies including general contractors, specialty and sub-contractors, architects, engineers and designers as well as material suppliers. The survey consisted of 20 questions pertaining to hiring and workforce practices, business plans, IT and other technology integration. It’s important note that survey participants also included both union and non-union companies.

Georgia Construction Trends

• Dollar Volume of Projects – The survey wanted to understand the expected increase or decrease in the dollar volume of new projects in 2019. There were fourteen project categories included in the survey ranging from highway, public buildings and hospitals to water/sewer and residential construction. What’s interesting about the results is that participants expect an increase in every category but one over the prior year. Results show there is an expected 52% increase in public building construction, 36% in multifamily residential, 29% in higher education, and 24% in hospital construction. Participants also indicated they expect highway to remain the same while sewer/water will experience very little growth.
• Headcount Changes – Given the amount of expected growth, the survey wanted to determine if participants will increase their headcount (and by how much) to manage demand. According to the survey, 44% of companies expect to increase their headcount by 11 or more total employees, while 52% will increase headcount by 1-10 employees. In evaluating percentages, 90% of survey respondents expect to increase head count while 2% will be reducing overall staff numbers.
• Ability to Fill Positions – The survey also wanted to understand how difficult it is expected to be for companies to fill new positions. 78% of respondents indicated they are having a hard time filling positions, while 12% reported no difficulty and 10% reporting no open positions to fill. At the same time, the survey also inquired about anticipated hiring challenges which revealed a similar sentiment. Results concluded that 38% of respondents indicated that it will continue to be difficult to hire, 29% believe it will become more difficult to hire, while 29% expect no real change.
• Increased Pay/Benefits – Given the tight labor market, the survey sought to understand how if companies are increasing pay, benefits or both to attract labor. According to the survey, 55% of respondents increased base pay rates, 33% offered performance incentives and bonuses, 24% increased the company’s portion of benefit payments and 9% are considering these changes. The balance of respondents either had no plans to increase or cut back in both areas.
• Training Investment – In seeking to get more productivity from employees, companies need to offer additional training. According to the survey, 80% of respondents plan to increase investments in training and development while 20% indicate they will stay the same. No respondent plans to decrease spending on training and development.
• Biggest Concerns – While labor appears to be the most pressing concern the survey wanted to find out what other issues are on the minds of management. According to the survey, 39% indicated worker shortage, 16% indicated growth in federal regulations, 10% indicated safety, 9% rising subcontractor costs and 3% the rising costs of materials and supplies.

Contact Us

The construction industry in Georgia is facing the unique challenge of large growth while concurrently managing a growing labor shortage. The survey findings reveal that companies are not avoiding the opportunity but rather finding ways to increase productivity with existing resources. If you have questions about the survey, it’s findings, or need assistance with a construction tax, accounting or audit issue, Wilson Lewis can help. For additional information please call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.