Contractors brace for labor shortage

By Bill Poovey
bpoovey@scbiznews.com
Published May 20, 2014

After having worked decades in construction, Waldrop Inc. President and CEO Bill Caldwell sees a labor problem that is about to get a lot worse. He said that, unlike in the past, young people who might have chosen to start construction jobs and move up through the ranks are now opting for college or training for manufacturing jobs that are less physically demanding.

“I think it’s an issue that is silent and people really don’t realize the potential impact long term on the cost of getting things done,” Caldwell said.

Many skilled construction workers changed careers during the Great Recession and have not returned, Caldwell said.

Waldrop Inc. President and CEO Bill Caldwell said that, unlike in the past, young people who might have chosen to start construction jobs are now opting for college or training for manufacturing jobs.

Waldrop Inc. President and CEO Bill Caldwell said that, unlike in the past, young people who might have chosen to start construction jobs are now opting for college or training for manufacturing jobs that are less physically demanding. (Photo by Bill Poovey)

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The National Center for Construction Education and Research has predicted a nationwide shortage of 2 million skilled construction workers by 2017. On top of that, the industry is aging, with most craft professionals close to 50 years old.

“We as an industry are not doing what we need to do to make the public, the academic world and the youth aware of the opportunities that are available today,” Caldwell said.

He said companies in the Upstate and elsewhere in the Southeast “have to compete in our industry against other areas in our country that may be in a boom.” He said there are huge gas and oil projects in the Gulf Region and “people will be flocking to that work from all over the country.”

Dan Doyle — vice president of development at The Beach Co. in Charleston, a company that has announced plans for mixed-use residential projects in Greenville — said that “from the multifamily rental perspective, availability of labor to build” is a potential pitfall for the industry, along with increasing material costs.

Doyle said the labor pool is a “serious issue.”

Robert Hughes, project manager at Hughes Development Corp., said labor availability is “always a concern for anyone in the development business. With how much construction currently is in the marketplace and … it’s not just in Greenville-Spartanburg. It seems to be everywhere. Contractors can be a little pickier about what they want to do and who they want to work with,” and can price things more competitively.

Brian Gallagher, director of marketing at O’Neal Inc., said there is “growing concern” among contractors.

“There are simply not enough trained and skilled construction craftsmen to fill the construction jobs in South Carolina,” Gallagher said.

“Regional construction booms, in the Gulf Coast and other areas, are examples of the challenges facing the industry,” he said. Gallagher said demand for workers in areas where there is a boom in construction, such as the Gulf Coast, “are pulling resources from the surrounding area including South Carolina.”

He said the “result will be escalating costs for S.C. companies.”

The Center for Construction Education has developed programs used in some schools, and Caldwell has met recently with representatives of the S.C. Chamber of Commerce to discuss a strategy to head off a worsening labor shortage. Caldwell said he and others are working to “make people in public education aware there are a lot of career opportunities available in the construction industry. All we hear is manufacturing. I think our industry is getting left out.”

Caldwell said construction is hard work, the workplace may not be as comfortable outside as an indoor manufacturing facility and starting manufacturing salaries may be slightly higher. He said workers that develop construction skills — electricians, pipefitters, welders, brick masons and carpenters — can reach higher salary levels than manufacturing jobs long term.

“You can make a good living,” Caldwell said. “There are plenty of opportunities. We want to hire young kids coming out of high school and tech school.”

He said people would “rather work on an assembly line instead of in the hot and cold” but 20 years from now they can “be on a management team or own a company.”

Caldwell said there are $30 billion worth of infrastructure projects on the drawing board and “people just aren’t standing in line to be craftsmen right now. There are good, bona fide careers in the construction industry.

“There is always going to be a need to build, renovate and maintain buildings,” Caldwell said. He said Waldrop has an apprentice program “but we can’t find 18-year-old kids who want to be a part of it.”

“You have a lot more opportunity for advancement with a company like ours if you are willing to work,” he said. “In a reasonable period of time you can be a foreman or superintendent or project management.”

“We want to become a manufacturing state but say, ‘Hey, don’t forget about us.’ ” Caldwell said.

Allen Gray — a spokesman for the Carolinas chapter of Associated General Contractors, which represents 1,450 contractors and related firms in both states, said it’s “not only the baby boomers moving on but it’s the length of this recession.”

He said people who left the industry in 2008 and 2009 have gone on to other careers.

“The economy ramps back up and we’re starting to hire again,” Gray said. “We are looking to bring people back into the industry and to grow our own work force.”

He said one member company just got a contract for a job in Charlotte and is looking to hire 60 electricians. He said skilled electricians can make $25 an hour.

“First we need to focus on vocational skills in our public school system,” Gray said. “There’s a lot of money to be made in these jobs.”

S.C. Department of Commerce spokeswoman Allison Skipper said in an email that their data and other reputable sources do “not show a notion of a construction labor shortage. They mentioned that in a true shortage, the high demand would force wage rates in that sector up, which has not been the case. Plus homebuilding permits are up.”

The agency’s reports show employment in the construction industry in March had increased by 3,500 jobs in the previous 12 months.

Will Huss Jr., president and CEO at Trehel Corp., said colleges and universities are “doing a great job” delivering candidates for office and management positions. He said that during the recession many in the construction industry changed fields and the current skilled work force is aging.

“It was a huge impact on the both the architectural world, construction world and engineering world,” Huss said. What concerns me most, it’s not that there is a lack of people right now, it’s that there aren’t any new ones coming about.” He said technology has become an influence that has young people wanting to go directly into management.

“They don’t want to work their way up the old fashioned way,” Huss said. “Some of the starting positions have a higher starting wage than construction, but construction has more of an upside.”

He said the “technological industries are so attractive to young people. Construction is hard.”

Huss commended Greenville Technical College for its construction program, describing it as “incredible.”

Huss said Trehel has about 70 employees.

Greenville Tech President Keith Miller said the college’s building construction technology program has more students than last year, likely due to a partnership with the Greenville Home Builders Association.

“I don’t see a move away from that, but like any other career field when the employers start to feel the crunch” they start talking about it, Miller said.

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