Diving into the 1% problem with the construction labor force

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Insights for better decisions MONDAY NOVEMBER 29, 2021 This week's industry gems   ?? Terminated nuke project workers seek new ruling in pay suit against Fluor "The issue is whether an independent contractor should be treated legally as an owner." This pending ruling by the 11th Circuit Court of Appeals is one to pay attention to. It could significantly change how contractors approach layoffs. If the court rules in favor of the class action lawsuit, contractors could be subject to the WARN Act which typically has been enforced on single site employers. The WARN Act requires 60 day notice for pending layoffs, which would be a major shift for construction projects. ?? Samsung picks Texas for $17B semiconductor plant "Texas Gov. Greg Abbott’s office says the project will support at least 6,500 construction jobs." The chip industry is moving forward yet another major project. On the heels of Intel ($20B in Arizona) and TSMC ($12B in Arizona) projects, the Samsung project is another major construction project. We talked last week about how leading indicators are pointing toward a major labor crunch.  Announcements this these are more fuel on that fire.   What's new on Road Dog Jobs? ?? The Launch Pad For people looking to build a career in construction and don't know where to start, we've built the Launch Pad. We're helping the people who sign up with information, training and help finding jobs. For employers on RDJ, we'll be sending you this list each week.  If you're looking to hire entry level, this is a great way to fill jobs and also help get these folks into the industry.   Did you know  Has your company been around for 40 years or less? Have you been awarded an project of $17M or more in your history? Well, congrats, you may be on your way to becoming a multi-billion dollar international construction company. It took Kiewit - an $8B company today - 40 years to win its first $1M project in 1924 (approx. $17M in today's dollars). The construction labor challenge is about the 1% What if we told you that solving the construction labor challenge doesn't require a total overhaul of the system? What if solving the labor challenge only requires just a few tweaks? We're thinking about the topic because of this Construction Dive article. The article is great and it talks about a really important program from the great state of South Carolina to fund scholarships in the trades. We love everything about the article. Except for one thing.  The article included a data point intended to highlight the dire state of the construction industry. Here's the specific sentence we took note of. "Only 16.7% of Generation Z has expressed interest in construction as a career path, according to a report by Tallo, a networking platform." Only 16.7%, yikes! That sounds scary and awful and full of doom, right?! Not really. We think data like that is actually bullish for construction. Since 1939 when the government started collecting construction employment data, construction has represented essentially 5% of the workforce. Here's the graph comparing construction to manufacturing as a % of the total workforce. It's 5% today.  It's been 5% forever. You know that tells us? It tells us that about 5% of Americans are inclined to work in construction. It tells us that the industry has been able to hold that number steady while manufacturing has been in complete freefall. Understanding the 5% threshold for construction employment, now how does 16.7% sound? Do you look at a stat of 16.7% of kids expressing an interest in construction any differently? If 16.7% of kids enter the construction workforce, we're about to 3X the workforce over the coming years! The point is that yes, the labor problem is big and ugly in construction. There's a real need for more people. The challenge, though is more like a 1% problem.  We're talking 1% of the workforce. If 1% of the American workforce (145M people today) were to move into construction, that would completely solve the issue. We don't need anything even close to 16.7% of people to want to get into construction.  We need 1%. By understanding the size of the challenge we hope the industry can focus its efforts on the people who are most likely to want to move into construction. We think the real impact will be in targeted campaigns that look to shift the workforce by 1%. Think small, and make a big impact.   Have a great week everybody! Get in touch!