Demand for homes may be strong, but demand for construction labor is even stronger. There were 172,000 construction jobs available nationwide in March 2017, according to the Bureau of Labor Statistics. Although that’s down from 209,000 a year earlier, and includes all construction types, the shortage of workers remains one of the biggest drags on the housing industry’s recovery.
Builders are responding by finding new ways to recruit and train the next generation of workers. One such response is the formation of the Colorado Homebuilding Academy, in Denver, which provides hands-on training to help build the current and future labor trade.
Recruiting the unemployed, underemployed, military veterans and graduating high school students, the CHA can almost guarantee participants will get jobs after completing the program because of the current lack of people in the market that can offer the skills they'll learn as part of the program to employers.
The CHA was founded by Pat Hamill, chairman and CEO of Oakwood Homes, in Colorado and Utah, which provided the initial funding, and was formed with the Colorado Construction Institute, a workforce training nonprofit. Local builders, recognizing that even with the land, the money and the buyer they’re still unable to make the supply happen, are also investing in the program.
In a recent study of nine trades central to home construction, the National Association of Home Builders noted an increase in the number of single-family builders reporting some level of a worker shortage. Whereas 21% of respondents indicated a shortage in 2012, 56% said the same four years later. The need is greatest among rough and finished carpenters, framing crews and bricklayers/masons.
To learn more about the CHA and how it aims to help fill the skilled-labor gap, Construction Dive talked with CHA director Michael Smith, previously the co-founder and executive director of the Colorado Construction Institute.
This interview has been edited and condensed.
If the housing industry is recovering, why do we still have a labor shortage?
SMITH: There are several reasons. Even though our housing market is incredibly strong today, we’re still suffering from its collapse in 2008. Leaving behind double-digit unemployment, many workers that left haven’t returned. But it doesn’t stop there.
Community colleges used to offer technical training but they stopped during the downturn because there were no construction jobs. When I was in [high] school, we had vocational and industrial arts programs, but little by little those went away due to budget cuts.
At the same time, we had a shift in attitude that everyone should go to college. Add a generation that has only heard that housing caused the recession, and [residential construction] hasn’t been the chosen career path for many. We didn’t expose our young people to the plethora of opportunities in construction and now, 20 years later, we’re trying to right that problem.
How does a program like the CHA aim to contribute to the solution?
SMITH: We’re focusing on present and future workforce problems by training field labor. Our Construction Skills Bootcamp is an eight-week program that is about 70% hands-on because we believe those entering the industry need hard skills. The remaining 30% [of the program] is completed online.
Partnering with the Home Builders Institute, which is commonly referred to as the workforce development arm of the National Association of Home Builders and has a nationally recognized certification, we teach the competencies needed to earn that certification.
Our Building Pathways program takes a partnership approach with high schools that don’t have the money to offer career exploration in construction. And we have an apprenticeship program for opportunity youth, or who used to be called at-risk youth.
We’ve also launched a new superintendent training program to manage the byproduct of having such a severe labor shortage. While the trades are struggling to get skilled people in the field, now more than ever we need well-trained superintendents who understand what each trade is doing.
How do programs like the CHA differ from training offered in the past?
SMITH: Construction used to be learned on the job as an apprentice. They had to work hard but in three to four years, depending on the trade, they’d become a journeyman in that craft. What we’re trying to do is give them the basic skills first, minimizing how long it takes before they’re productive and valuable to their employer. Centralizing the training is a new way of doing things.
What is the cost of training to students and how is your program funded?
SMITH: We currently offer this program at no cost to the participant. If they come to us with a genuine desire to work in construction, we’ll cover the cost. And when I say we, I’m talking about the industry. The program has a variety of sources, beyond Oakwood Homes’ contribution. They include reaching out to other builders through partnerships with the Home Builders Association of Metro Denver as their approved training partner.
There are also grants and funding available from government entities. Local workforce offices will often pay the tuition of a student who qualifies. We just received a new grant from the Denver Urban Renewal Authority that has funding earmarked for construction training. Last year, the Colorado WORK Act, run by the state’s Department of Labor and Employment, gave us about $150,000 in grants to pay for outreach and recruitment. We match that money 100%.
What has been the biggest challenge in getting the academy up and running?
SMITH: Getting the message out to the public that jobs in construction are great jobs has been a challenge. There should be a line of people out the door who want to work in this industry — with free training and an almost guaranteed job, and because there are so many looking for those with the skills we give them. Still, we often have a class with one or two slots available. We’re training 90 to 120 people per year just through one program [the CHA also has Superintendent Training and Infrastructure Boot Camp programs], but the number should be bigger.
What does the future look like for construction labor?
SMITH: Eventually we’ll solve the problem, but it’s going to take a lot of hard work. If you look at the data, we’re already short of how many people we need. The housing market is incredibly strong and we don’t see that changing for a minimum of three years. It will probably be more than that before you see any correction. But here’s the scary part: The average age of the skilled labor in the field right now is 42 years old. What happens when they retire?
We need to create solutions at scale — not 100 people a year but 1,000 people a year or more, just in Colorado. This is a big problem and we can’t just increase production cycle time. We need solutions for the long run.