The Construction Labor Challenge by Ken Fredrickson

May 18, 2016  •  Leave a Comment

The AGC of America statistics for the percentage change in construction labor for the twelve-month period between February 2015 and 2016 shows that California construction employment grew 8% statewide, 9% in Riverside-San Bernardino-Ontario region, 5% in LA-Long Beach-Glendale region and 15% in Anaheim-Santa Ana-Irvine region.  Association officials said that it is unclear how many more jobs would have been added if it weren’t for the severe workforce shortages many firms have reported during the past several years.  (April 5, 2016, AGC website). 

As the more construction projects begin to start, how does this expected labor shortage impact upcoming public projects in Southern California?  There are several possible impacts:

 
  • Labor shortages drive up the cost of the work – directly through higher bids as contractors seek the best use for a scarce resource or increased cost for overtime and indirectly through lost productivity and schedule disruption.
  • A lack of labor makes th e work much more difficult to complete on schedule – if there is no labor, things simply don’t get done.  While labor will travel to where the work is, it also means that they can be more selective looking for the best working conditions and highest pay                                  
    • Trying to get more done with fewer workers through 
  • overtime impacts productivity and increases safety incidents – resulting in higher costs and lost time.
  •  

As an owner, don’t assume that it is not your problem.  There are a few things that you can do to ensure a successful project:

  • Allow enough time to get the job done – don’t shorten schedules if you don’t have to!
  • Promote good planning.  Construction is most effective when work proceeds smoothly and construction crews have a constant flow of work that allows consistency in staffing.
  • Help the contractor get the most from the labor force – avoid delays, answer questions and resolve problems quickly.
  • Make certain that the contractor is properly planning their work – be suspicious if schedules show large spikes of labor or if non-critical work gets continuously pushed until it must all be done at once.  Compare actual and planned productivity – avoid overpaying for progress.
  • Make certain that final inspections and punchlists are done while the right skilled labor is there to make corrections and finish the work – this may require “final” inspections in phases but it will be worth the effort. 

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