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The construction sector is booming, with large infrastructures, manufacturing jobs and data centers full steam ahead.
But the remote location of many of these projects it means that the surrounding area may not have the skilled labor needed to do the job, or have a large population. This makes it harder to get workers to relocate temporarily where there may not be a grocery store, a medical center, or even a lot of housing nearby.
“Infrastructure construction is booming and there needs to be more skilled labor in every market to meet the demand,” said Jessica Roman, director of business sales at Navan, a corporate travel management company based in in Palo Alto, California.
Extended stay hotels and rental services such as Airbnb have seen an increase in use by the construction industry recently. Still, contractors have had to get creative about how to make these projects more attractive to workers, such as offering bonuses and help with housing.
Movement of skilled labor to meet demand
Extended stay accommodation for project managers and building trades has increased by 120% in the past two years to the end of November, according to data from Navan. Industry also outperformed all other sectors in business travel overall by 9.2% in the 12 months to August. Companies are paying in advance for these types of bookings, Roman said.
Investments in infrastructure have boosted this demand rises. The Biden administration’s Investing in America initiative, which includes the American Rescue Plan, the Jobs and Infrastructure Investment Act, the CHIPS and Science Act, and the Inflation Reduction Act, “has put workers in construction down the road, fueling a race for extended-stay hotels to win their business,” Roman said.
Getting skilled workers to these jobs and keeping them there has become critical, especially since flying them back and forth repeatedly is neither practical nor affordable.
The costs of transit, especially for plane tickets, have gone up, Roman said, and jobs aren’t necessarily near major airports.
“So it makes sense that they want workers to travel less frequently and stay for longer periods of time,” Roman said.
Make distant jobs more attractive
Construction employers with jobs in far-flung areas must be creative in attracting workers to their sites. Because of the national labor shortage, skilled workers may not feel the need to leave jobs close to home, said Mike Dorsey, vice president of the Contractors Association trade unions
“How do we get a union plumber making a big salary in Chicago to go to Stanton, Tenn., on a $6 billion job at the Ford plant? he said, referring to the 3,600 acre mega campus under construction there.
Mike Dorsey
Authorization granted by the TAUC
Contractors are working to do this through financial incentives such as higher wages, monthly bonuses, higher per diems and overtime opportunities. Also, contractors are working with owners to show them the grim reality of the situation and how it plays into costs and schedules, Dorsey said.
For example, the project of Taiwan Semiconductor Manufacturing Co. $40 billion in Phoenix had to push back its opening due to an “insufficient amount of skilled workers.” The Arizona Building Construction Trades Council reached an agreement with TSMC to help build the project, but the company still felt a shortage of available personnel.
Contractors and owners are also planning ahead, Dorsey added, looking at when one megaproject will be done and how they can work to mobilize labor for the next one.
Other accommodations
Contractors are also looking for lodging options beyond extended stays and hotels, said Brian Gallagher, vice president of corporate development for Graycor, an Oakbrook Terrace, Ill.-based contractor.
Gallagher recently facilitated a panel discussion on this topic at a conference and found that owners and contractors are getting creative in marketing these jobs as unique opportunities, both work and of life
Brian Gallagher
Permission granted by Graycor
For example, some owners developed a place where workers could bring their trailers. Because these jobs can be long trips from grocery stores or health care facilities, they partner with local community members to bring food trucks and health care providers to the sites where the workers.
“They’re finding ways to make it more attractive and add more amenities,” Gallagher said.
The problem of extended stay
That conundrum is unlikely to change, especially as major projects continue to break ground, Roman said, and “will continue to put more construction workers on the road.”
Extended-stay hotels are likely to be an attractive option, he added, because of their affordability. They are also likely to continue to play a role even in large projects in more populated areas due to the short term The rental market has recently faced setbacksincluded new regulation in New York.
Contractors who can rise to the challenge will have an advantage, Gallagher said, as some landlords are weighing workforce development efforts over qualifications to bid on projects, and it plays a factor in awarding sites. of work
“When we propose, owners are looking for ‘what’s your plan?’ They want a very detailed plan of what your strategy is going to be,” he said.
Gallagher sees this as a continued challenge, but also an “opportunity for owners and contractors to be more creative in finding some solutions,” he added.
