Finding Solutions to the Workforce Skills Gap in Construction and Logistics

Developers are partnering with educators and local communities to launch new training and recruitment programs.

A new report published by the NAIOP Research Foundation titled Addressing the Workforce Skills Gap in Construction and CRE related Trades explores innovative partnerships among developers, educational institutions and local communities to improve training and recruitment in the construction and logistics trades.

Researcher Barry Stern, Ph.D., a consultant specializing in workforce development and industry-education partnerships and a former deputy assistant secretary at the U.S. Department of Education, reviewed recent literature and interviewed industry experts, employers, educators and community leaders to examine a range of different workforce development strategies.

Respondents agreed that a shortage of qualified workers poses significant challenges for the construction and logistics industries. Recent trends suggest that employers cannot rely on the status quo to produce enough qualified workers to meet future demand. However, the report reveals that multisector partnerships can go a long way toward expanding the pipeline of prospective workers who are qualified to begin a career in construction or logistics.

Excerpts from the Executive Summary

Recent economic growth has been a boon to developers, owners and investors across the commercial real estate industry, but has also made it more difficult for contractors and warehouse operators to recruit and retain qualified workers. While low unemployment has made recruitment and retention more challenging for employers in most industries, recent trends have contributed to more pronounced workforce shortages in construction and logistics than in other sectors. The construction industry has struggled to recover the workers it lost during the 2008-9 recession. This can partly be explained by declining secondary school resources devoted to vocational education and relatively limited millennial interest in construction trades. The logistics industry faces a similarly limited pipeline for new workers while demand for employees in warehouse and distribution centers is growing.

This report draws from interviews and secondary sources to explore five partnerships for workforce development in the construction and logistics industries. An analysis of these partnerships reveals several important findings that merit the attention of warehouse owners and operators as well as developers across the real estate industry:

Contractors will increasingly need to adopt new technologies to improve worker productivity. Adoption of labor-saving technologies like 3-D printing and robotics can help substitute for scarce labor. Other technologies, like augmented and virtual reality and wearables, can improve the site design process and boost worker safety. In addition to mitigating the workforce shortage, a commitment to increasing worker productivity through technology adoption will help contractors grow their businesses more rapidly.

The most successful workforce development programs rely on multisector collaboration. When employers, educational providers and community leaders work together to promote workforce development, they are able to leverage their unique capabilities and resources to maximize program outcomes. While employers can often develop effective in-house training programs, a partnership with an educational institution and local community leaders can allow for more effective and comprehensive training, unique insights into the local talent pool and better access to prospective workers.

It is important to align workforce development programs with local trends. Worker training and recruitment programs should be designed to prepare prospective workers for jobs that are currently in demand in their local area. Program leaders should also tailor recruitment efforts to the local pool of prospective workers. For example, a new program in a rural area may need to demonstrate that prospective workers can find long-term employment in the area.

Demonstrating that a job can be part of a long-term career is important to recruitment and retention in the logistics and construction industries. This is particularly true for recruiting and retaining workers in entry-level positions as these workers are less likely to be familiar with industry career tracks. When prospective or current employees are aware of future opportunities for development and advancement, they are less likely to treat a job as a short-term arrangement and are more likely to invest in their own skills.

The construction and logistics industries need to invest in training and recruiting high school students and recent graduates. Declining public school investment in vocational education has contributed to lower awareness of careers in construction and logistics. This has exacerbated a shortage of entry-level workers. To reverse this trend, employers in construction and logistics will need to proactively reach out to high school students to expose them to opportunities in each industry and offer them relevant vocational training.

Shawn Moura, Ph.D., is the director of research for NAIOP.