Infrastructure investment means construction jobs galore—but not workers

Four ways to tackle labor shortages ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

TODAY'S NEWS. TOMORROW'S INSIGHTS. A daily newsletter from McKinsey & Company   Edited by Katy McLaughlin   Senior Editor, Southern California Hunger for hard hats In the news • Help wanted. Recent policies adopted by the US are likely to create millions of new construction jobs, according to academic and industry research. This will add to a backlog of 407,000 already-existing unfilled construction jobs. For generations, immigrant workers have contributed to major infrastructure projects, from skyscrapers to railroads. Now, ahead of an intensifying labor crunch, construction trade groups are calling for immigration reform in order to find workers. [Construction Dive] • Knock-on shortages. A shortfall in construction labor is contributing to a major shortage of housing in the US, according to a report released by a large home builder trade group. The US currently lacks at least one million homes for sale or rent, and more than two million net hires are needed in construction between 2022 and 2024. The difficulty in hiring workers is in part ironic because construction pays relatively well. Half of payroll workers in construction earn more than the US median wage, and the top quartile of earners make a minimum of $75,820. [Builder Online] In the year of peak demand, we estimate a shortfall of more than 160,000 contractors and subcontractors, 145,000 materials sector workers, and 40,000 engineering and technical-services workers. On McKinsey.com • A building problem. How can the US fill hundreds of thousands of construction jobs likely to be created annually between 2023 and 2033? The causes of the construction labor shortage include baby boomers leaving the workforce, record quit rates, low net migration, and a shrinking pipeline of new construction workers. The consequences are serious: a labor shortage could deprive the US of urgently needed upgrades to aging infrastructure, add to inflation, and jeopardize the opportunity to position the country for greater economic success, explain senior partner Adi Kumar and coauthors. • Laying the foundation. In light of labor challenges in construction, there are four ways to prepare for the infrastructure work ahead. First, focus on increasing the labor supply by reskilling workforces and hiring from nontraditional segments. Second, improve productivity through better technology, professionalized procurement methodologies, and improved jobsite management. The industry can also explore new ways to work with contractors and smarter approaches to prioritizing and sequencing jobs. See specific actions company leaders can take to combat the labor shortage and help the US capitalize on this transformational moment. Dig into labor issues Was this forwarded to you? Sign up here. Or send us feedback—we'd love to hear from you. Follow our thinking This email contains information about McKinsey's research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy. You received this email because you subscribed to the On Point newsletter. Manage subscriptions | Unsubscribe Copyright © 2022 | McKinsey & Company, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007