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Builders Welcome the Increase in Demand, But the Supply of Workers Has Not Kept Pace

October 12, 2017

Brick mason Juan Rodriquez regularly fields calls from contractors trying to hire his brick laying crews. With plenty of work already lined up, he often turns them down.

“It’s really easy to find work,” Rodriguez said. “It’s real hard to find help.”

The demand for his two crews comes in stark contrast to the slowdown he experienced during the Great Recession, when he turned to Home Depot for a side job. Some of his crew members landed jobs in other sectors, such as restaurants or landscaping, but have since returned to the industry as owners of their own business. “Everyone is busy,” he said.

Nashville’s building industry has taken off in recent years, illustrated by new homes popping up throughout Middle Tennessee and cranes dotting the downtown skyline. But, the supply of workers has not kept pace. The shortage of skilled laborers has manifested in better wages but has led to increased building costs, higher prices for consumers and project delays. The issue is not just felt in Nashville and in Tennessee, but nationally.

“We really do have a problem,” said David McGowan, owner of Regent Homes, a top Nashville-based home builder. “We are constantly fighting for labor.”

114,000: The number of individuals in the construction sector in Tennessee in 2006. Ten years and a massive recession later, that number has declined by 20 percent to fewer than 91,000.

$36,600: The median pay in Tennessee’s construction sector, an increase of 25 percent over the past decade.

David McGowan, owner of Regent Homes, walks through the new Carothers Farms subdivision in southeast Davidson County. SHELLEY MAYS/THE TENNESSEAN

For every five tradesmen retiring, one apprentice is in training to fill their position, according to Go Build Tennessee, a marketing initiative to grow the trade workforce. At the same time the sector is expected to grow 22 percent by 2022 nationally.

“The math doesn’t work,” said David Stansell, president of Go Build Tennessee.

In 2006, there were 114,000 individuals in the construction sector in Tennessee, according to the Tennessee Department of Labor and Workforce Development. Ten years and a massive recession later, that number has declined by 20 percent to fewer than 91,000.

While efforts are underway to bolster the pipeline of tradesmen, industry leaders see no signs of the issue fading. New funding has been approved for highway infrastructure projects statewide, with major roadwork planned for December. Meanwhile damage from Hurricane Harvey and Hurricane Irma will only add to the demand for Southeast tradesmen, according to those in the field.

“It’s tight and with these hurricanes, it’s about to get really tight,” John Sheley, executive vice president of the Home Builders Association of Middle Tennessee, said. ‘There is going to be competition to get people to move down to Texas.’

McGowan, who is building 300 homes in Middle Tennessee at any given time, said he has lost three superintendents in a year to competitors offering higher pay or a promotion they couldn’t pass up. It is also not uncommon for apartment and hotel builders facing tight deadlines to visit residential sites and offer bonuses to those willing to switch projects, he said.

Higher hiring costs are passed on to home buyers or absorbed by the builder, he said. Meanwhile, he estimates the time it takes to build a home has increased by 20 to 30 percent because of a worker shortage.

For the Alvarado family, who own Twin Services painting and drywall company, the issue is not talent poaching, but people they train often will recognize the abundant demand and leave to start their own business.

‘The demand here is crazy,’ Sandra Alvarado said. ‘Anyone is able to branch off and get a project here and there. Even if they find one person to help them, they can run their own show.’

BUILDING THE PIPELINE

Signs of the labor shortage began to emerge before the Great Recession, said Stansell, owner of Stansell Electric Company. The economic downturn delayed the problem and then exacerbated it as the temporary decline in projects prompted those considering the trade to look elsewhere.

At the root of the issue is perception, industry leaders say. Students have been encouraged to pursue a four-year degree that could help them boost earnings over time, and many high schools have shifted away from vocational programs to college prep. But, many students fail to complete degrees while amassing significant debt. Less than 45 percent of students at two and four-year public colleges in Tennessee complete their degree, according to Complete Tennessee’s Room to Grow report.

Pursuing a trade skill out of high school can lead to a meaningful career, without the cost of a college degree, according to industry leaders. And for those who obtain a degree with a focus on trade industries, the earnings are more lucrative.

A construction manager in Tennessee made $94,400 on average in 2016, according to the labor department, and industry leaders say six-figure earnings are attainable at the top of the sector.

“You very quickly can be earning a solid income,” Sheley said. “We need to start looking at skilled construction trades as a positive career move for kids growing up in Tennessee.’

Rodriguez said the brick mason trade has allowed him to send three children to college. ‘I feel pride because I started from the bottom,’ he said.

Median pay in the sector in Tennessee has climbed 25 percent over the past decade to $36,600, growth that is in line with overall median pay gains statewide. But, addressing the problem means more than just upping pay. If there are not enough skilled workers to hire, projects cannot be completed. Especially for commercial building, workers must be highly trained, said Toby Compton, President of the Associated Builders and Contractors’ Tennessee Chapter.

“To do some of these jobs that are the higher wage jobs, you have got to have training,’ Compton said. ‘For someone who is working on the top of a building, they need to be trained about how to harness in, run a crane, understand weight loads or work with high-voltage electricity. It’s not that easy, You have to have the supply of people and there is not enough people.’

Go Build Tennessee was launched in 2016, inspired by a similar effort that began in Alabama and has spread to several other states. The initiative includes a marketing campaign through social media and television that emphasizes the opportunities that exist in the field. Representatives also attend job fairs and high school events to shift the conversation surrounding electricians, equipment operators, carpenters and masons. The program is funded by contractors, with dollars that were accrued through state licensing fees.


Go Build Executive Director Ryan Dwyer said enrollment in construction related courses has increased by 24 percent in Alabama since the initiative was launched there in 2010 and 125 new training courses have been added to meet student demand. In its second year in Tennessee, Go Build is making an impact, Compton said. His association’s training program saw peak enrollment this year, with 330 students.

“The good thing in the industry is we have a nice pipeline of projects,” Compton said. “Our guys have a lot of solid projects on the books for the next couple of years. We hope over time people begin to see value of getting into these jobs.”

This article originally appears in the Tennessean.

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