Capitalizing on Growth: Building an Engineering and Construction Workforce in 2025
As a key player in the engineering and construction industry, you’re aware of its impressive growth. Capturing this momentum, however, requires a skilled workforce. Let’s explore innovative talent management strategies to attract and retain the professionals necessary for success.
Construction spending has surged by 11% over the past two years, with infrastructure and manufacturing spending rising by over 8% and 20%, respectively, in May 2024 compared to the previous year. The Dodge Momentum Index increased by 10% in June 2024, signaling continued strength in the sector. Additionally, the construction industry’s employment rate outpaced general job growth, increasing by 1.4% annually between 2019 and 2023.
The U.S. Bureau of Labor Statistics predicts an average of 188,000 annual job vacancies in architecture and engineering professions from 2022 to 2032. Trades like metal fabrication are seeing unprecedented demand, while the complexity of infrastructure-related skills has risen by 44% in the last five years. Digital skills, such as cloud computing, grew by nearly 15% between 2019 and 2023—a trend expected to accelerate through 2025 as the industry embraces new technologies.
Soft skills, including leadership and business management, have also gained importance since 2019. At the same time, the aging workforce poses a challenge, with the share of construction workers aged 55 and above nearly doubling from 2003 to 2023.
Labor Shortage in Engineering and Construction
Industry growth is often reflected by an increase in job opportunities, but this also unveils the mounting challenge of matching open positions. A recent survey reveals that over 80% of executives find it difficult to fill open positions. Recognizing and understanding the reasons behind the talent deficiency is critical for businesses looking to remain competitive. The incessant evolution of jobs, driven by rapid technological advancements and automation, has created a demand for new skill sets that many workers are not yet equipped with. At the same time, shifting worker needs, such as the desire for flexible schedules, remote work options, and better work-life balance, have altered the traditional employment landscape. These factors, combined with the challenge of upskilling existing employees and attracting the right talent, have made addressing the talent gap more complex than ever before.
The talent gap continues to expand, impacting the search for talent. This could spell trouble for pre-commissioned U.S. construction projects in 2025.
The Challenge of Filling Skilled Roles
Highly skilled roles in engineering and construction require specific industry knowledge and expertise, and these roles are becoming increasingly difficult to fill. For instance, there's been a 40%+ increase in demand for skills in metal fabrication, likely due to heightened labor requirements for infrastructure projects.
Progressive skill requirements further complicate the talent search. As companies continue to invest in technological advancements, skills requirements will likely need to be updated, and some roles may need to be redesigned.
1. The Influence of Technology and the Importance of Soft Skills
Construction companies are progressively seeking applicants with digital skills, allowing them to invest in new technology to boost operational efficiency. At the same time, there's a growing importance placed on soft skills, especially in the construction industry, where projects must be delivered on time and within budget.
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2. The Impact of an Aging Workforce and the Disinterest of Younger Workers
The share of construction workers aged 55 and above nearly doubled to 22% in 2023. Additionally, younger individuals' perceived lack of interest in construction work can exacerbate the skills gap and lead to a loss of essential trade skills each time an employee retires without a replacement.
Embracing Tomorrow's Skills and Jobs Today
To tackle the ongoing talent shortage, organizations need to implement measures that go beyond quick fixes like signing bonuses and outsourcing. The current challenges demand a more comprehensive and long-term approach. So, how can engineering and construction executives actively engage with their workforce to create sustainable strategies for addressing this talent gap?
Here are some strategic approaches, encompassing the entire life cycle of talent management, that executives might consider to develop a future-ready and agile workforce:
1. Nurture the existing workforce while diversifying the potential talent pool: Focus on upskilling and reskilling current employees to meet evolving industry demands. At the same time, attract talent from underrepresented groups and untapped markets to build a more diverse and inclusive team. This dual approach helps expand the available talent base while strengthening the capabilities of the current workforce.
2. Drive cultural change within organizations to meet evolving workforce needs: Foster an environment that prioritizes collaboration, innovation, and flexibility. By building a strong company culture, organizations can better align with the expectations of modern employees, particularly younger generations who value purpose-driven work, inclusivity, and opportunities for growth.
3. Integrate technologies and an ecosystem approach to enhance workforce capabilities: Leverage advanced technologies such as AI, robotics, and digital platforms to automate repetitive tasks and optimize workflows. Additionally, adopt an ecosystem perspective by forming partnerships with educational institutions, training providers, and other businesses to create a pipeline of skilled talent and share workforce solutions.
Conclusion
Proactive talent management is essential for organizations to thrive. It requires a multifaceted approach that includes attracting a diverse pool of candidates, fostering a positive and engaging company culture, enabling internal mobility through cross-skilling and upskilling opportunities, and forming strategic partnerships to address workforce needs collaboratively.
In essence, talent management is no longer just about hiring and retaining employees—it's about future-proofing the entire organization. Companies that invest in creating an agile, adaptable, and forward-thinking workforce will be better positioned to tackle the challenges of tomorrow. By embedding these strategies into your talent management framework, you can build a robust and resilient workforce that drives long-term success and innovation.
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1moThe skills shortage is the predominate business challenge for the construction industry. It transcends supply chain and finance.