As construction wages rise in response to inflation and an industry labor shortage, contractors continue to struggle to attract and keep talent, according to constructiondive.com.
The Associated General Contractors of America’s 2023 Construction Hiring & Business Outlook, which gathered data from more than 1,000 construction firms, shows average hourly earnings for construction workers rose 6.1% from December 2021 to December 2022—higher than the 5% increase in average pay for all private sector production workers.
Although 72% of contractors increased base pay rates and about a third boosted bonuses and benefits in 2022, 80% reported having difficulty filling positions. AGC reports workforce shortages likely will worsen, with 69% of contractors expecting to need more workers in 2023.
“Contractors are now competing not only with other contractors but also with Amazon and the distribution segment and potentially jobs that offer remote work,” said Associated Builders and Contractors Economist Zachary Fritz. “So, that’s pushed wages up, and they’ve particularly accelerated over the past year. Construction wages have increased faster than overall wages in 10 of the past 12 months and increased at a faster rate than overall monthly inflation in each of the past six months.”
AGC Chief Economist Ken Simonson said construction companies have always had to pay a premium to attract workers; that premium averaged 21.5% from 2000 to 2019 but despite wage increases this year has dropped to 18%. He said firms are going to have to raise pay even more to meet or exceed the historic premium.
Contractors are trying to find other ways to attract workers and compete with other industries, including employee coaches, direct access to company leaders, more paid time off, higher per diems and more work-life balance. More construction companies also are moving toward creating employee-owned organizations.
