“There’s plenty of work here; staffing is an issue, but the supply issues are probably the ones that are killing us the most. It’s getting better, but we have a long way to go.”

Chris Carson, president and COO of Carson-Mitchell Corporation in Springfield, Missouri, offered his outlook at an Associated General Contractors of America (AGC) livestream discussion following the release of the ninth annual AGC/Autodesk Workforce Survey.

While not HVAC-specific, the survey digs into relevant construction industry issues and conditions. This year’s survey collected input from 2,100 firms of all sizes, both union and open shop.

Reviewing the results, AGC chief economist Ken Simonson reported that “nearly nine out of 10 firms are experiencing project delays. Among all respondents, 75% cite delays due to longer lead times or shortages of materials, while 57% cite delivery delays. Sixty-one percent of firms said their projects are being delayed because of workforce shortages among their teams or those of their subcontractors.”

A whopping 93% of firms report that rising materials costs have affected their projects. Thirty-seven percent said that they have been unsuccessful in passing those added costs onto project owners.

Brett Strassel, vice president of operations for AGC member Hedrick Bros. in West Palm Beach, Florida, echoed the sentiment. Some steel-based materials that usually arrive within 12 or 24 hours then routinely became a 30-day wait, “which is just alarming.”

Strassel said that while dealing with inflation is one thing — at least that had a traceable metric and went up incrementally — “cost escalation is something we’re really taking hard down here.”

His company has had project delays or stops “because we can’t quite deal with what the price is going to be. From an owner’s perspective, that’s concerning, and we understand that.”


Good Hires: What Does It Take?

AGC’s Simonson referenced an industry report that found construction position openings at the end of June had risen to the highest mark in the 21 years of the report. That data reflected 21 types of craft workers and 11 salaried categories. While technician shortages receive the most attention and are generally most acute, staffing is also an issue elsewhere on the payroll.

In the event’s Q&A session, the scenario arose regarding millennial job expectations and how some look for perks like gym or Netflix memberships, possibly as even more attractive than higher pay. Predictably, that has raised eyebrows among many industry veterans, but would it change behavior?

Strassel’s firm hired a consultant to study the topic after the company had spent a couple of years striking out in its attempts to recruit at larger universities.

“We had some of the ‘That’ll never happen’ mindset” about those less traditional priorities, recalled Strassel.

“Then we started losing talent.”

Now, the company has started a task force to see how it can make itself more attractive.

“We can’t ignore an entire generation,” Strassel said. “We’d be foolish to stick our heads in the sand, and I think there’ll be some concessions, some changes made.”

Allison Scott, director of construction thought leadership and customer marketing, encourages companies in the industry to adapt and take the initiative.

“There are life-changing roles available in construction, but if we don’t demonstrate that success, don’t talk about them, don’t provide the education, then people won’t know that it’s there. We need to push those early conversations around the kitchen table,” she advised.

Only 37% of firms reported engaging with career-building programs in education settings. Thirty-one percent have added online strategies to connect with younger applicants, AGC said.

AGC has launched a “Construction is Essential” digital advertising campaign, along with a “Culture of Care” program to help members retain their newly hired workers.

Scott also remained hopeful that the infrastructure bill currently under consideration in Congress will provide yet more focus on and resources for vocational training and technical skill sets.

Stephen E. Sandherr, AGC’s chief executive officer, echoed that sentiment.

“The federal government currently spends only one dollar on career training for every six it puts into college prep, despite the fact only one-in-three jobs requires a college degree,” he said. “Boosting federal investments in career and technical education will help attract and prepare more people into high-paying careers in construction.”

In the meantime, the AGC/Autodesk survey indicates that the larger firms are tapping into their deeper resources to shore up staffing and keep up with demand. These tactics include training and other workforce development, bonuses, or increased base pay rates, as 75% of respondents had done in the last year.

Two-thirds of the firms with revenues that exceeded $500 million increased their headcount in the past 12 months, AGC summarized. That is compared to just over half (53%) of midsized firms — those with revenues of $50.1 million to $500 million — and slightly more than one-third (36%) of firms with revenues of $50 million or less.


Flexible … To A Point

Across the board, lack of qualified candidates is the most common explanation given for hiring troubles, at around 70%. That level stays consistent among union and open shop environments.

Fifty-eight percent of respondents cited unemployment insurance supplements as keeping potential workers away.

In fact, the AGC survey summary projects that “workers will enter, or re-enter, the construction labor pool as COVID concerns diminish and unemployment supplements finally expire.”

Data has been mixed regarding the effects of expiring supplements. In the AGC survey, among companies who encountered furloughed employees who declined to return when asked, a little less than half said that any employees had cited UI benefits as a reason. Either way, COVID and related concerns contribute to some labor reluctance and to other headaches for contractors.

An increasing COVID vaccination rate, and with any luck an easing of Delta variant repercussions, will provide some boost to both the worker pool and a rebound in projects.

That will still leave the core staffing hurdles to clear, and job description latitude has its limits in construction.

“On a project management level, you do a lot from your phone and laptop, and that’s great,” said Carson. For other jobs, there remains no getting around that “it still comes down to getting there at 7 a.m. and working until 3:30 p.m.

“But on mid- and upper-level management, we’re as flexible as we can. We’re going to have to find ways to entice the two- and four-year degree men and women to come on board, and give them an attractive place to work.”

Add to this mix the prominent share of construction employees who, using Carson’s own description as an example, live 20 to 30 miles outside of Springfield and bring not only their skills but a predominantly anti-vaccination perspective to work each day. As long as the pandemic remains a primary factor, the definition of “attractive place to work” in construction may differ more than ever within a given company’s workforce.

COVID issues, complex supply chain woes, and an unprecedented staffing transition present an historical array of management challenges. The AGC survey and analysis suggest that the height of those hurdles is equaled only by the amount of business waiting to be had by owners who can find ways to clear them.


Survey Sentiments a Little Brighter Out West

The core problems of the era — staffing, materials, and pandemic-related issues — affect practically all contractors throughout the United States. However, impacts vary from region to region, as do attitudes about a recovery on the horizon.

Ken Simonson, chief economist for AGC, looked at geographical differences through the lens of one survey question: Has your head count changed in the last 12 months?

Northeastern contractors stood out as a group for how many of them reported a lower head count than the same time last year. The South was the only other region with prominent numbers reporting smaller staffs.

Meanwhile, payroll sizes have fared much better out west. Half of the contractors there reported that their teams had actually grown over the past year, with just one-third carrying smaller staffs.

Midwestern firms as a whole avoided the extremes on the head count question, but that region featured the largest percentage of firms who said projects had been postponed for any reason or canceled, Simonson said.

The Northeast respondents also proved to be the most pessimistic in terms of how long they expected it to take to catch up to last year’s business levels. Forty percent expect it will take more than six months for their firm’s volume of business to return to normal.

To put that cloudier view in context, only 12% of Midwestern contractors held that view, followed by 22% in the West and 34% of Southern respondents.

Northeastern contractors might be squinting a little harder to see a silver lining on account of their comparatively lagging revenue levels as of midsummer 2021. Only 37% of contractors there said they were keeping up with last year’s business, whereas Simonson noted that the national number is closer to 46%.