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Market Watch

Construction Worker Shortage Could Hinder A/E Firms

Short on talent

While A/E firms face difficulties in finding qualified employees, the construction industry is experiencing its own talent shortage—one that could result in the delay or cancellation of design projects. The construction industry’s 7.8% unemployment rate in February 2018 was the lowest February number ever recorded, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics data, while the 65,000 net new jobs added during the month marked a post-recession high. “The shortage of skilled construction workers continues to be a significant drag on construction activity,” reports Bernard M. Markstein, President and Chief Economist of Markstein Advisors, who conducted the ABC analysis.

Home to Mexico

More than most sectors of the economy, the construction industry has historically relied on immigrant labor. A 2017 Pew Research Center study found that 15% of U.S. construction workers were undocumented immigrants and another 12% were legal immigrants. Many of those immigrants came from Mexico, but with the United States now experiencing a net outflow of Mexican immigrants, according to the Pew Research Center, that immigrant labor pool is shrinking.

Going gray

The construction industry is also facing a demographics problem. Workers in the building trades have an average age approaching 50, according to Curbed. While the percentage of construction workers 55 and older increased from 11.0% in 2002 to 20.7% in 2015, according to the U.S. Bureau of Labor Statistics, the percentage of construction workers between the ages of 20 and 24 fell from 10.7% in 2005 to only 7.3% in 2015. The situation could worsen as 20% of construction workers are expected to retire over the next decade.

Residential void

The National Association of Home Builders estimates that there are more than 200,000 unfilled residential construction jobs across the country, according to the Dallas Morning News. That is a particular concern since residential construction is a driver of projects in numerous other industries. The shortage is particularly acute in states such as Texas and Florida that were hard-hit by hurricanes last year. More than 90% of Dallas Builders Association members, for instance, reported the lack of labor was having a “significant impact on their business.”

Technology Corner

Dropbox Targets AEC Industry

More than words

While Dropbox has become a popular hosting and cloud storage service for businesses, users are sharing more than just spreadsheets, word-processing documents, and PDF files. More than 1.5 billion .DWG files have also been stored by Dropbox users, and the company has responded in recent months by unveiling improvements focused specifically on the AEC industry.

Plugged in

In late 2017, Dropbox announced a collaboration with Autodesk to make it easier to access and share AutoCAD design files. The company introduced a new plug-in that integrates with Autodesk software to allow users to directly open and save project files stored in Dropbox without leaving the AutoCAD desktop application.

Price drop

According to law firm Pillsbury Winthrop Shaw Pittman, the market is very competitive as insurers try to build market share, so there are deals to be made as far as the coverage or price you want. Insurance broker Marsh reports that cyber insurance rates fell 1.7% in the first quarter of 2017 followed by a 1.5% drop in the second quarter.

Marked up

Dropbox also has plans to beta-test a .DWG viewer and markup app that runs inside Dropbox and enables Autodesk users to share design files with users who don’t own Autodesk software. Project team members and clients will be able to view shared files even if they don’t have AutoCAD installed, which will assist with project collaboration. The company plans to offer CAD Previews in 2018 across select Dropbox subscription plans.

The New Workplace

The AEC Industry’s #MeToo Movement

Immunity denied

The AEC industry is hardly immune to the revelations of workplace sexual harassment and misconduct that have garnered frequent headlines in recent months. In fact, the industry has a high-risk factor given its interface with clients and subconsultants as well as its male-dominated power structure. In the architecture industry, for example, women account for 31% of its workforce and only 20% of its principals and partners, according to the American Institute of Architects (AIA).

Less screen time

AEC firms need to do more than simply force their employees to sit through training videos if they hope to solve the problem. A 2016 report by the Equal Employment Opportunity Commission (EEOC) found that “much of the training done over the last 30 years has not worked as a prevention tool— it’s been too focused on simply avoiding legal liability.” According to the report, too many firms rely on cookie-cutter or web-based training programs that are not only ineffective, but can be counterproductive.

Co-worker empowerment

The EEOC report recommends that firms undertake interactive training sessions that use relevant hypotheticals tailored to specific workplaces and are “part of a holistic culture of non-harassment that starts at the top.” The study also advocates the incorporation of “bystander intervention training” that provides tools for co-workers to intervene when they witness harassing behavior and has proven effective in combating sexual violence on school campuses. The EEOC report also prescribes the use of “civility trainings,” which focus on promoting respect and civil behavior in the workplace in general rather than on eliminating unwelcome or offensive behavior.

Balance of power

As a November 2017 Harvard Business Review article argued, the most effective way to reduce sexual harassment in the workplace is ultimately not through training programs, but the promotion of more women. “Reducing power differentials can help, not only because women are less likely than men to harass, but also because their presence in management can change workplace culture,” wrote article authors Frank Dobbin and Alexandra Kalev.

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