Construction Labor Shortage to Continue in Kentucky & Ohio
The growth in the construction industry has moved at a quick pace and the number of new projects across various sectors spells opportunity for many local industry companies. The Bureau of Labor & Statistics has reported that construction is one of the hottest industry sectors and expects it to remain so through 2020. In a recently published blog post, Continued Growth for Contractors Highlighted in Benchmarking Report, there is data from other sources that corroborate the expected industry expansion. While the growth trend is welcome news for Ohio and Kentucky construction companies, it comes in the face of continuing troubles finding and retaining hourly and salaried employees. According to the 2018 Workforce Survey Results published by the Associated General Contractors (AGC) of America, 92% of companies in Ohio and 79% of companies in Kentucky are having a hard time filling open positions. To help clients, prospects and others understand key results and how it could impact their business, Barnes Dennig has provided a summary of key information below.
About the Survey
Although the survey was conducted on a nationwide basis, the trends, facts and figures provided below come from the results for companies surveyed in Kentucky and Ohio only. A total of 57 Kentucky-based companies participated in the survey while 64 Ohio-based companies participated.
- Hiring Trends – The survey wanted to identify how many companies were expecting to hire in the next 12 months. According to the survey, 72% of Kentucky companies and 90% of Ohio companies expect to hire hourly craft personnel for new projects. Only 8% of Ohio companies indicated they were hiring to replace existing staff while there appears to be a greater need for replacement labor in Kentucky where 20% of companies are hiring replacements over the coming year. It appears that retention issues are more prominent in Kentucky than Ohio where growth is driving hiring needs.
- Hiring Challenges by Position – To get a better sense of what positions are posing the greatest hiring challenge, the survey asked participants to rank those which post the most difficulty. According to the Kentucky survey, 100% of companies are having difficulty hiring bricklayers, 88% with roofers, 65% with concrete workers, 63% with sheet metal workers, 62% with iron workers and electricians and 61% with carpenters. According to the Ohio survey, 79% are having difficulty hiring drywall installers, 78% with carpenters, 75% with iron workers, 67% with roofers, 64% with painters and 57% with laborers. While each state has its own challenges, it’s obvious the labor shortage is a real obstacle for companies in both states.
- Hiring Expectations – Another area the survey wanted to explore was the expectations companies have about whether hiring will become easier, stay the same or become more difficult in the coming months. According to the Kentucky survey, 56% of companies believe it will become harder to hire hourly labor, 23% believe it will continue to be difficult, while 21% expect no changes. According to the Ohio survey, 51% of companies believe it will be harder to hire hourly labor, 23% believe it will continue to be difficult and 14% expect no change. It’s clear the consensus is that companies expect the labor market to continue to be tight and challenging.
- Employee Attrition – To understand where ex-employees go after they leave, the survey asked participants to identify ex-employees’ next employment location. According to the survey for Kentucky, 24% of hourly labor is going to other construction companies while 26% are going into other industries. According to the survey for Ohio, 52% of hourly labor is going to other construction companies while 21% are going to other industries. It’s clear that employee attrition to other industry companies is an issue in Ohio and companies may decide to address through compensation or other changes.
- Benefit/Pay Changes – The survey wanted to understand what actions employers are taking to attract and retain labor. According to the survey for Kentucky, 76% of companies have increased pay for hourly labor, 19% offer incentive pay or bonuses, 24% increased employer benefit contributions and 9% have not changed benefits or pay and do not intend to do so. According to the Ohio survey, 50% of companies have increased pay for hourly labor, 19% offer incentive pay and bonuses, 21% have increased the employer portion of benefit payments and 10% have not increased pay/benefits and do not intend to do so.
While growth in the construction industry spells opportunity for many, the obstacle of difficulty finding qualified hourly labor will continue into the foreseeable future. This makes recruiting and employee development an important function that companies need to consider. If you have questions about the survey or need assistance with a construction or tax issue, Barnes Dennig can help! For additional information please call us at 513-241-8313 or click here to contact us. We look forward to speaking with you soon.