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Dive brief:
- Contractors’ struggles to find workers will continue in 2024, but most still they intend to increase their workforce due to increased demand for various types of projects, according to a new Associated General Contractors of America survey of its members.
- Almost eight in 10 respondents said they had one difficulty in hiring a salaried or hourly craftsman positions, but 69% still said they anticipate a “full increase” in the workforce. A fifth of respondents said it will be more difficult to hire in 2024.
- However, contractors will need these workers. In 14 of the 17 sectors, respondents predicted the dollar value of the projects they compete for would increase this year compared to 2023.
Diving knowledge:
Recruiting isn’t the only ingredient creating what AGC CEO Stephen Sandherr called a “mixed bag” for contractors this year.
Respondents’ top concerns for 2024 include:
- Increase in interest rates or financing costs: 64%.
- Economic slowdown or recession: 62%.
- Increase in direct labor costs (salary, benefits, employer taxes): 58%.
- Insufficient supply of workers or subcontractors: 56%
- Quality of workers: 56%.
- Material costs: 54%.
During a Jan. 4 webinar on the report, Lynn Hansen, CEO of Charlotte, North Carolina-based Crowder Constructors, expressed cautious optimism for the new year. Crowder works in the energy, mechanical, transportation and electrical sectors in the Southeast, where Hansen said federal Jobs and Infrastructure Investment Act work has benefited the company, but he also anticipates increased competition.
This competition is not just for projects, but for finding and keeping talented workers.
“Our good people are constantly being recruited,” Hansen said. “We’re always looking for more qualified people, and paying them competitively is key.”
In order to hire and retain more workers, nearly two-thirds of respondents to the AGC survey said they increased base pay in 2023 more than the previous year, and a quarter introduced or increased incentives or bonuses.
Hansen said younger workers value more flexibility and time off, and Crowder intends to invest more in technology to hire workers.
At the same time, IIJA funding has come with more strings attached, as federal projects require membership recently updated Davis-Bacon rules.
“Paying our people and reporting requirements has not been difficult for us,” Hansen said, even though he created a registered apprenticeship program in compliance with the Inflation Reduction Act it took almost a year to get up and running, he added.
