Boost worker training to counter the construction labor shortage

In the highly people-dependent capital-project industry, a well-trained staff is essential for success. A good project director can mean the difference between profit and loss. But even experienced employees must augment their skills to keep up with digitization, automation, and changing data strategies—not to mention today’s sustainability challenges and new business practices.

Our yearlong research into next-generation project delivery methods revealed that sustained capability building and a redesigned talent pipeline are fundamental requirements for transforming the execution of large capital projects. Such projects are at the center of the global transition to net zero by 2050, so this type of transformation is now urgent. A plausible net-zero 2050 transition scenario envisions an average of $9.2 trillion a year to 2050 in capital spending on physical assets for energy and land use systems. An additional $1 trillion of today’s annual spending would have to be reallocated from high-emissions to low-emissions assets. To get the desired results from these investments, companies will need innovative approaches coupled with sophisticated stakeholder management—transforming capital-project delivery as we know it.

Yet systematically training and retaining qualified employees is an ongoing issue for most capital-project businesses. Many contractors claim they would like to offer regular, comprehensive training but add that they don’t know where to start or consider the problem just too big. After all, the industry is project based, decentralized, and fluid by nature. Employees rotate not only within companies but also across the sector, and resources are often subcontracted. Add acute labor shortages to the mix, and systematic capability building has become a significant hurdle.

In response, large capital-project companies can take a step up from project-by-project hiring by creating a broad capability-building program that addresses skill gaps across the employee base. Such a program can integrate skill-building efforts into day-to-day people development—including clear career paths and correlated training—and should be aligned with a company’s strategic priorities. A new program should also develop a mix of hard and soft skills and use virtual tools to connect the leadership with employees across the business.

This kind of systemic capability building can’t be an afterthought. With today’s labor mismatches, companies offering superior people development have an advantage. Don’t be left behind.

Hiring, training—and maintaining

Success in the capital-project industry rests heavily on the shoulders of its skilled employees. Companies have a continuing need for workers who can make rapid decisions, even with imperfect information; manage a growing set of stakeholders, from clients and subcontractors to local authorities; and proactively manage the risks, such as commodity price increases or supply chain disruptions affecting project schedules—to name two recent examples.

However, because construction companies typically hire staff only as needed, they rarely have strong incentives to develop the longer-term capabilities of the workforce. Instead, they traditionally default to training new employees by having them work side-by-side with more seasoned ones.

This approach had become more difficult even before the pandemic, when around 85 percent of the respondents in a global survey of industry leaders said that shortages of skilled labor were “highly important” to the industry. A mid-2021 survey of US general contractors found that nearly 90 percent of construction firms were experiencing project delays, which 61 percent of the respondents specifically attributed to labor shortages. A looming wave of retirements will probably increase the challenge, since more than 40 percent of the current US construction workforce is expected to retire by 2031.

The industry also has a rapidly growing need for workers with more advanced digital skill sets, given the number of new digital solutions in use for collaboration, back-office optimization, and on-site execution—including automation, AI, analytics, 3-D printing, modularization, and robotics. Done right, the technological transformation will create leaner, smarter decision-making processes. Nonetheless, recruiting workers with appropriate digital skills is a global cross-industry challenge.

As the industry begins to experience this next normal in construction, capital-project companies can hope to hire, train, and maintain a workforce that has the following three qualities:

• adaptability: receptive to change, able to adopt new methods quickly, and adept at executing projects involving more complex stakeholder ecosystems
• digital proficiency: able to adopt, understand, troubleshoot, and develop new digital workflows and solutions and to manage data securely, efficiently, and effectively
• business acumen: endowed with not only technical proficiency but also business sense, because this is an industry with a great deal of margin pressure

Projects require both hard and soft skills

Project leaders trying to complete work on time and on budget tend to focus mainly on short-term priorities and troubleshooting, and pay less attention to the long-term sustainability of the business. A great deal of training therefore takes place on the job. In addition, the industry tends to focus this training on hard skills like technical proficiency rather than soft ones, such as negotiating with counterparties, tackling unforeseen issues, communicating with the business, and resolving conflicts.

Yet soft skills generate valuable behavioral change with a lasting impact. These skills are especially needed when the nature of work is evolving quickly, as it is today. CEOs have ranked capability building among their top priorities (Exhibit 1).

The traditional approach to capability building won’t change overnight. Nonetheless, many large construction businesses have already taken strong steps in th

Fuente: PMideas (Boost worker training to counter the construction labor shortage).