Last updated: September 25, 2023
The construction industry worldwide is facing massive changes today, in some ways of a nature that is unprecedented. Over the next two decades, the industry will have to overcome problems and challenges for which solutions aren’t immediately evident. Companies that fail to adopt innovative approaches to these problems will struggle, and many will fail.
Demand for construction services is high
A bright spot for the construction industry is that demand for services is currently high and expected to grow significantly over the next two decades, a welcome upturn after suffering a severe downturn during the recession of the last decade. This rising demand is due to economic growth, increased consumer confidence, and an economy that’s more friendly to business.
After the collapse in 2008, a lot of construction companies went out of business, and those that remained had to fight for scraps because there simply wasn’t enough business. Over the last few years though, we’ve started to see an increase in new construction because valuation, both in terms of home prices and commercial real estate are climbing, which has instilled greater confidence in contractors and investors alike.
Workforce changes are the biggest challenge
Workforce changes and a current labor shortage will prove to be the biggest challenges for the construction industry in the foreseeable future. During the last recession, the construction industry lost over 40% of its workers, and many didn’t return. Also, experienced workers are retiring in great numbers as the Baby Boomers and Generation X ages, leaving a vacuum of skilled workers that the industry is struggling to replace. One obvious and absolutely necessary source of new workers is the Millennial Generation, but they bring their own challenges to the industry.
Millennials and the construction industry
Millennials have borne the brunt of much criticism from all business sectors. Deserved or not, they’ve gained a reputation for apathy towards work and education, demanding self-centeredness, and unreliability. But probably the biggest challenge for the construction industry regarding the Millennial generation is that they are just not interested in entering the construction workforce at all.
The children of this generation grew up with smartphones, computers, and the Internet, and therefore their skills and preferences are towards technical professions. Another factor is that most of these children grew up in households where both parents worked, and so their fathers weren’t around to pass on the skills that previous generations inherited.
Millennials in general grew up in a lifestyle of comfort and indoor pursuits, and the hard, dirty, hands-on work of construction simply doesn’t appeal to them, indeed is quite foreign to their upbringing. Attracting these necessary workers into the construction industry will be a major challenge, but it’s not an insurmountable one.
Millennials and drug use
Illegal drug use has been a major problem in the industry for many years, costing companies billions every year due to accidents, productivity loss, and workers compensation claims. The trend towards the legalization of marijuana in many states has been cited as a major contributing factor in recent years.
In can be argued that the Millennial generation has had more exposure to the drug culture than any previous generation. The wide availability of so many types of drugs today, as well as a culture and society that condones, and often even glorifies drug use and abuse, have been the biggest contributing factors to this situation.
However, while many sources cite that alcohol abuse and abuse of some types of drugs has declined during the years of the Millennial generation, with teen alcohol use in particular declining by as much as 60% since the mid 1990s, the use of opioids, prescription drugs, and marijuana has increased. Studies have shown that over 21 million Americans over the age of 12 have been diagnosed with a substance abuse disorder.
Combating Millennial drug use on the job
Since construction companies will have to attract and hire Millennials to cope with the growing labor shortage, adopting strategies to combat their particular drug usage trends will be crucial. One method is to put an emphasis on hiring military veterans, among whom, although drug abuse certainly exists, it is generally much lower than in the general population, due to zero-tolerance policy and strict testing, and the general character, discipline, and attitude of those in the military.
Construction companies should adopt the same approach as the military. There is simply no substitute for a comprehensive employee drug testing program that includes pre-employment, random, and post-accident drug testing.
Reaching out to a Millennial workforce
Despite the unique problems associated with the Millennial generation, they can and will make up the majority of the construction workforce in the decades to come. They will of course be a major source of technology workers in all industries as companies embrace new technologies.
Expanding internship opportunities, as well as supporting trade and vocational schools, should be a major component of the construction industry’s outreach to Millennials. Knauff says:
You also need to connect with them where they spend a lot of their time, and that’s social media. You need to engage with them where they’re comfortable, and show them that you’re a trustworthy and exciting company to work for. Video can and should play a big role in this strategy, because it’s a dominant and growing medium that creates a level of engagement and trust that no other can.
By the year 2030, Millennials will make up over 80% of the global workforce. All industries, including construction, will have to adopt strategies to attract and retain these workers if they hope to survive and thrive.