By Jay Holtzman. If the U.S. Department of Labor projections hold true, the shortage of qualified workers soon to materialize may make the labor problems of the late 1990s look like a walk in the park.
Between 2000 and 2010, the number of jobs in the United States will grow by 22.2 million, according to the Bureau of Labor Statistics. The civilian work force will grow by 17 million workers during that period. That works out to an overall shortfall in the economy of some 10 million workers. And forecasts promise it will be more than a blip. By 2030, say some analysts, the shortfall in the United States could be as much as 35 million workers.
As for the effect on housing in the near term, the message is mixed and varies, as always, with local market conditions.
In Las Vegas, Kent Lay, president of Beazer Homes USA's Nevada division, sees shortages already. "There are definitely labor shortages, especially on the trade side. My framers are currently having a hard time attracting carpenters. They've got signs up at every one of my jobs. Now some of these companies are actually sharing crews back and forth to help each other. When have you heard of that before?" Lay asks, adding that the situation is worse than it was two years ago.
Some builders are having an easier time of it, but are finding that qualified workers aren't as available as they expected, given the cooling off of some sectors of the economy. According to Matt Koart, president of Pulte's Northern California division, hiring qualified people is, "a little easier today than it was two years ago during our major high-tech boom when every builder was hiring like crazy. But I wouldn't say it is as much easier as you would think it should be when you have all these people in other industries out of work."
Others, including Steve Nellis, vice president of recruiting for Centex, note a difference between availability of employees and contractors. "At the college level two years ago, the faculty were telling students to entertain as many job offers as possible," he recalls. "Now they're telling them to take any job offer they get." But finding tradesmen is another story, Nellis adds. "[It] is still difficult and in certain markets ? smaller markets like Charlestown, S.C., or Nashville ? it is extremely difficult."
Not all builders are feeling the bite that is expected to become widespread by the middle of the decade.
"Right now, this is not a problem we are spending a lot of time on," says David Hill, chairman of Kimball Hill Homes, in Rolling Meadow, Ill. Hiring is, "the easiest it has been for some time," he says, adding that this holds true for most jobs and in all the company's markets in the Midwest, West Coast, Texas, and Florida.
In fact, Hill questions the BLS projections, pointing out as an example that, "the federal bureaucracies don't have a real good handle on immigration, illegal or otherwise. At the moment, this is a well-staffed, well-functioning business."
Rich Staky, too, finds that the economy has taken care of the labor shortage for the time being. "We are not dramatically expanding our operations right now," says Staky, who is president of John Laing Homes' Colorado region. "More of our emphasis is on keeping really good people as opposed to recruiting new people," he explains.
Even if their current situation is rosy, many builders aren't waiting to address this lurking problem. The hiring and retention habits formed in response to the labor pinch a few years ago are still in practice at many building companies. They continue creating trade alliances. They've stepped up recruiting efforts and made efforts to work with an ethnically diverse work force. They are refining corporate cultures to attract and retain the high skilled workers they seek. They're pouring greater resources into training as a way to develop and retain employees.
Kimball Hill will "about triple our training budget for the next fiscal year," says Hill. The position Nellis holds at Centex didn't exist three years ago. "Our executives decided we had to focus on that area and have a person dedicated to this effort," he says.
At Beazer, in Nevada, Lay hired a director of training and personnel development a few months ago. "That person's job is to keep our people trained and keep the enthusiasm for training high," he says. Putting resources into training serves the company and employees directly and it sends an important signal, he explains. When employees see how the company invests in their training, they think they must be "pretty special, and that this must be a pretty special company, too," he adds.
Big builders also aggressively recruit on college campuses, much more so than in the past. Centex recruits on more than 40 campuses across the U.S., according to Nellis. Pulte has a national college recruiting initiative, says Koart, and each division is required to fill a quota of college recruits. In Denver, Staky says his division of John Laing Homes is, "putting a lot of effort into our college recruiting program. We work with three or four universities in Denver throughout the year looking to pull people primarily from construction management programs as good candidates for our field operations," he explains. He terms the effort "very successful."
In response to the changing marketplace, hiring practices and training have begun to extend to a multi-ethnic work force. It's not uncommon for conversational Spanish geared to a construction setting to be part of a training regime, builders report.
"You have to equip your people," Staky says. "We are doing contracts in Spanish for labor and materials with some of the trades. We have sales contracts in Spanish. Some of our marketing materials are in Spanish. You have to be prepared to conduct your business in the language that people are comfortable in, not just English," he adds.
|More About Workers|
|Impending Crisis, Too Many Jobs, Too Few People (Oakhill Press, Nov. 2002), by Roger Herman, Tom Olivo, Joyce Gioia. Available at bookstores and online at www.impendingcrisis.com|
|Bureau of Labor Statistics, www.bls.gov|
Big builders are focusing on corporate cultures to help attract and retain quality people. To achieve this, builders focus on training, more operational autonomy, "employee fast tracking," a company's reputation, a track record of growth, and an enjoyable workplace where people feel respected.
"By assigning someone a mentor when they come into the company, by giving them a good training effort and something in writing about what we expect, it sets a cultural tone," explains Pulte's Koart. "It says we are a professional organization and you have an obligation to act professionally, too. If you don't make an effort to provide meaningful training or establish any culture, you're making a statement about your culture right there."
Most fundamentally, it's about values.
Using employee surveys, Lay's division came up with a set of shared values ? quality, integrity, teamwork, accountability, and communications ? that, "we have stenciled on the walls," Lay says. "Everything we do centralizes around those values because these are the values our employees expressed. That's the kind of culture they want it to be."
In addition to builders' own efforts to attract and retain help, NAHB economist Michael Carliner points to two demographic sectors that may mitigate home building labor shortages.
Baby boomers. Construction has traditionally relied on young male workers who often leave the industry around the age of 40, Carliner explains. "But over the past decade, we've succeeded in retaining a lot of those baby boomers who we were afraid were going to leave," he says, so the industry won't have to rely entirely on young workers. Supplementing them will be a new wave of workers, the so-called echo boomers born in the late 70's and 80's.
Immigrants. An influx of immigrant workers, primarily Hispanic, helped cut industry labor shortages in the 90's, Carliner points out. How much immigration the country will experience is always uncertain, he explains, but ever since the World Trade Center attacks it is more of a wildcard than ever. "We may have some immigration issues because of tighter enforcement of regulations," Carliner adds.
Beginning around 2005 and continuing for the next 30 years, employers can expect a workplace characterized by "dynamic change that will create persistent shortages of qualified employees," says Ed Potter, president of The Employment Policy Foundation, a nonprofit based in Washington, D.C. "Failure to close the labor supply gap will mean slower economic growth and rising wage costs," says Potter, who adds a positive note. "The shortage of labor can be overcome by a combination of increased labor force participation, increased productivity, education, and immigration."
?Jay Holtzman is based in Jamestown, R.I.
Published in BIG BUILDER Magazine, December 2002