Leaders In the Construction Industry Have Never Faced a Labour Shortage Quite Like This

Written by Eric Beaudan, Partner and Global Head, Leadership Advisory Services; Robert Quinn, Partner and Head, Industrial Practice; and Trevor Smith, Partner, Industrial Practice

Truthfully, the construction sector has for many years been short of workers – from skilled trades to general labourers. However, the global pandemic and the global boom in construction have taken a bad situation and made it even worse.

In British Columbia, for example, a 2022 survey found that 75 per cent of sector companies are short-staffed and turning down work as a result. These findings are consistent with the experience in other provinces; Statistics Canada reported the Canadian construction industry was short 69,000 workers and that vacancies just for trades helpers and labourers had increased by more than 150 per cent from 2019 to the fourth quarter of 2021.

And this isn’t just a Canadian problem.

In the United States, construction industry groups have estimated an additional 650,000 workers – many of them skilled – are needed to meet current demand. Those numbers are echoed by the American Home Builders Institute, which has indicated a whopping 2.2 million workers of all types are needed in the next three years just to meet the demand for new housing.

How can leaders in construction firms address a labour shortage that went from bad to worse during the pandemic? Construction businesses – particularly smaller to medium sized companies – can invest in leadership development to not only attract a new generation of employee but convince them construction is a long-term career.

Can leaders on their own help reduce the construction labour shortage?

There are many within construction that believe stronger leadership culture could make or break efforts to draw more young people into construction and related trades. There’s only one problem: in a market where there is a drastic shortage of workers, there is also a shortage of leaders. And for an industry that is desperate to attract new generations of workers, that is a very bad trend.

For example, McKinsey identified leadership as a key issue to addressing the construction labour shortage. In a report on the labour shortage in the U.S. construction industry strongly recommends current leadership develop a stronger emphasis on strategic labour initiatives to attract under-represented groups of employees. It also suggests that “leadership will likely need to be increasingly present in the field and on the job site too, celebrating and recognizing top talent throughout the organization.”

Unfortunately, construction industry leadership as a professional discipline is struggling to gain traction with younger generations.

In the U.S., enrollment in construction management graduate programs is dropping. Some have theorized this is because these specialty programs are not well promoted to students; others point out that save for the skilled trades, few post-secondary students see themselves as future leaders in the construction industry.

Not surprisingly, the average age of workers in the construction industry is rising. Surveys taken before the pandemic showed significant increases in workers older than 55, and double-digit declines in those 16 to 24. 

A checklist to help build impactful leaders

Larger construction companies have invested in sophisticated human resource systems and processes for some time. However, smaller and medium-sized firms often struggle to find the resources to invest in HR functions beyond things like time and attendance, labour relations and payroll.

Many of these companies are family owned and have taken a mostly hands off approach to HR concerns. Plus, the seasonal and transactional nature of construction – where employment levels ramp up and drop off with each new project – make something like leadership development seem impractical.

But all construction companies of all sizes need to spend some time developing leaders if they hope to bridge the labour shortages that are so prevalent now. But where to start? The following provides a simple checklist for construction companies to help get them started on the road to building a leadership culture.

Acknowledge that there is a need. It is impossible to undertake something as complex as leadership development unless current leaders acknowledge that there is room to improve. This can be a particularly thorny issue for smaller, family-run firms that have their own unique approach to managing human resources. However, even the smallest firms can benefit from a leadership culture that helps attract and retain talent. 

Assess the state of your current leadership team. Bringing in an outside consultant to assess the state of current leadership can be a revealing process. It helps identify the good, bad, and ugly of current leadership culture, while also identifying strong performers and those that may need some help. Psychometric assessments, interviews and interactive work with the leadership group will help you figure out whether the people you have in leadership positions now are the people you will need in the future.

Use the tools best suited to the job at hand. The good news for construction companies hoping to build more impactful leaders is that there are wide variety of tools and strategies available. Companies may choose to make coaching available to leaders, either through a traditional one-on-one format, mentoring or through a team coaching approach. Things like team coaching or virtual coaching, can help smaller or mid-sized companies to provide this support to their leaders at an overall cost that will fit most budgets.

Measure. In the construction industry, the prevailing adage is to “measure twice, cut once.” A similar philosophy can be applied to leadership development. If you’re going to invest in your leaders, it’s important to measure the outcomes to ensure you’re getting good value for your money. The process of measuring in leadership development starts with establishing benchmarks for improved behaviour and skills. Assessing leaders both before and after training helps ensure they absorbed the learning and are now applying it in their day-to-day work.

Just about every industry and sector is facing a labour shortage right now. But not every company within these industries and sectors are being proactive about addressing the shortage. Although it’s important to have an effective recruitment strategy, once you get newer and largely younger employees in the door you must do everything you can to make sure they stay.

Simply put, there are few things you can do to improve retention more than providing a contemporary and positive leadership culture. All it takes is a commitment to developing more effective leaders.

About the Authors

Leaders In the Construction Industry Have Never Faced a Labour Shortage Quite Like This

Eric Beaudan is Partner and Global Head of the Leadership Practice at Odgers Berndtson Canada. Using the proprietary LeaderFit assessment method he designed, Eric works with organizations to assess and develop the leadership potential of their executives and high-potential talent. 

Leaders In the Construction Industry Have Never Faced a Labour Shortage Quite Like This

Robert (Rob) Quinn is Partner and Head of the Industrial Practice in Canada, as well as Head of the Global Mining Practice. He specializes in recruiting senior executives and board directors in the Mining, Energy & Utilities, Manufacturing, and Infrastructure sectors. 

 

Leaders In the Construction Industry Have Never Faced a Labour Shortage Quite Like This

Trevor Smith is a Partner with Odgers Berndtson’s Industrial Practice in Canada. With over 10 years of search experience in both the public and private sectors, he has successfully completed numerous executive-level assignments with a focus on Energy, Manufacturing, and the broader Industrial sector.

 

Leaders In the Construction Industry Have Never Faced a Labour Shortage Quite Like This

About Odgers Berndtson

Odgers Berndtson is a global integrated leadership advisory firm providing expertise in executive and board search; interim executive search; leadership assessment, coaching and development; board and team performance; and business strategy consulting.  Nationally, we support our clients from six offices across the country. Globally, more than 1,100 Odgers Berndtson colleagues support our clients from 65 offices in 33 countries.