A News Tribune story on Aug. 9 about workforce challenges in the construction industry presented conflicting opinions on whether a shortage exists and then lapsed into the city’s solution to the shortage: imposing specific project-hiring thresholds on contractors. (The story was headlined, “Construction or constriction? Retiring workers heighten concerns for upcoming Duluth-area projects.”)
As CEO of Minnesota’s largest construction-employer organization — Associated General Contractors of Minnesota, or AGC, whose members include all major union-affiliated general contractors in the greater Duluth area — I was disappointed that the condensed reporting skipped material nuances. This may have misled readers.
The commercial construction workforce is different from most employment contexts because it uses a multi-employer model. Commercial tradespersons regularly move from project to project and employer to employer. A worker does not work exclusively for one employer and often does not work on a project from start to finish. Rather, the cement mason may finish a Duluth apartment floor for one employer and then work the next week on a Virginia parking lot for a second employer, etc. Other workers assemble the ironwork and complete the framing and electrical components.
This specialization by trades means the trade representative in one craft may not see a worker shortage at a specific point in time or among other crafts.
General contractors who manage entire projects involving all scopes of work and trades see the shortages from a broader context. A worker shortage in one craft can impact the entire project’s timely completion.
Lesson one: your place in the production chain influences your perception of workforce supply and demand; and recruitment is a broad initiative across employers, localities, and projects. Construction labor demands also fluctuate based upon the volume and type of work, project schedule, and scopes performed. To illustrate, a $20 million commercial building will employ more skilled labor over a longer period than a $20 million bituminous roadway overlay. The building project requires licensed and specialty crafts employed at different times — like electricians, plumbers, and carpenters — while the roadway project employs a modest number of laborers and operating engineers over a much shorter duration.
Lesson two: assuming all construction markets experience the same degree of worker shortage is false. AGC member firms consistently have reported a shortage of skilled and available workers as their biggest challenge. Since this concern first emerged, contractors report using more technological solutions to supplement their labor needs. Operating this new technology spawns new challenges to recruit and train. Today’s construction work is highly skilled and on a fast trajectory toward becoming more automated and manufacturing-based. This means that future workforce demand will require workers with greater training and more varied and refined skills.
Lesson three: the perception that construction work is unskilled and has a low barrier to enter is false. Construction work is a skilled trade requiring specialized training. Recognizing the changing and growing needs for trained workers, construction employers and labor unions have been recruiting new talent and have broadened their outreach to new communities of talent.
Lesson four: it is in the industry’s self-interest to recruit and train workers, and the industry has been working on this issue aggressively for years. The commonly held perception that the construction industry needs “warm bodies” is being perpetuated by misguided observers. The News Tribune article quoted city staff who co-created the Duluth Community Benefits Program, or DCB Program, a well-intentioned effort to pair construction jobs with disadvantaged or marginalized persons in need of a pathway to a better future. Unfortunately, the DCB Program presents an oversimplified narrative of the many challenging steps required to recruit people off the street, deliver the necessary training, and assign them tasks that are complex and specialized. The apprenticeship model of skills training, safety instruction, and jobsite learning is the model that consistently produces career tradespersons. The path from apprentice to journey worker is long and filled with unique challenges both specific to the work and imbedded in the industry culture, like managing seasonal layoffs and interrupted cash flow. Recruiting without this training dooms retention and squanders recruiting resources.
Lesson five: a workforce that is not well-matched to employer needs or market demands is inefficient and wastes workforce-development resources. We at AGC fear that city regulators will eventually tighten compliance efforts by unilaterally disciplining employers which fail to meet unrealistic goals established and applied under the DCB Program without justification or substantiation. The DCB Program needs to recognize the nuances of the construction workforce and support current efforts rather than enforce a vague discretionary compliance program based on largely unachievable goals and unmeasurable outcomes.
We met recently with Duluth’s mayor and city staff to press these concerns and to highlight other obvious program irregularities, including conflicts with federal and state employment and affirmative-action laws. We cautioned that the program will not earn support for the city’s goal but potentially will drive contractors to non-city jobs. We further suggested incentive-based ideas that might elicit better results and help better serve the shared program goals. We have not received a meaningful response to these concerns or ideas.
Construction workforce needs are complicated and have been the subject of many government and private efforts to recruit, train, and retain workers of all backgrounds. These workers are needed and wanted. We sincerely hope the city of Duluth will stand on the shoulders of these efforts, hear our concerns, and recognize contractors as partners in building the Northland’s construction workforce.
Tim Worke is CEO of Associated General Contractors of Minnesota, based in St. Paul.