The construction boom has now lasted for well over a decade. The industry has witnessed unprecedented levels of building, so much that labor supply has been unable to keep up with demand. While it’s impossible to know when the cycle will turn, this dynamic won’t last forever. When the cycle does turn, there are implications for the labor market that workers and companies alike should prepare for.
The power dynamic will shift from worker to employer
For years, contractors across the country have struggled to fulfill their labor needs. There are a number of factors driving this, including fewer capable young people entering the trades over the last several decades and an inefficient labor market due to a lack of construction-specific hiring technology.
That said, when the cycle shifts, demand for workers will subside, and companies will more than likely be far more selective in who they hire. Therefore, workers will need to be more creative and more proactive when seeking employment since jobs won’t be so readily available. They’ll need to be able to showcase their skill sets and experience in a compelling fashion and at a moment’s notice, they’ll need to leverage technology platforms to get exposure to employers, and more and more of them will likely engage with staffing firms who are adept at placing workers at appropriate jobs.
A platform technology supporting the labor market will become even more critical
In a more normalized labor market, workers will need to embrace technology platforms to get ahead. Word of mouth and sourcing jobs through buddies simply wont be as effective. To successfully leverage these platforms, workers will need to organize their work examples, have references from prior jobs and be hyper responsive to interested employers.
Today’s construction worker is incredibly adept with technology, particularly mobile technology, and they will need to harness this skill for the purpose of landing their next job. Platforms like these are far more prevalent in the other industries, and there’s no reason to believe that can’t support a more efficient flow of labor in the construction industry.
Geographic Movement
Workers will be forced to relocate to where the jobs are located. Certain parts of the country will be more affected than others by a slowdown in building, and workers will need go to recognize that and make difficult decisions. Companies that are more national in scope, and therefore more diversified, will likely win in this market.
Wage Pressure
For the last several years, workers have been able to change jobs for higher pay due to supply-demand labor imbalance. In a building slowdown, companies will have far more negotiating leverage, and the risk of leaving a job that is paying a competitive rate will be far higher. The bottom line is a likelihood of less labor movement and some wage stagnation, especially in areas where the construction market is most adversely affected.
Reskilling/Upskilling
Workers whose skills are no longer in high demand may be forced to reinvent themselves to be more employable. Deciding to upskill certainly has some considerable opportunity cost associated with it, but it could bear fruit for workers over the longer term if they’re willing (and able) to make the short-term sacrifice.
