Is There a Demographic Craft Labor Cliff That Will Affect Project Performance

This research team analyzed craft availability in the United States and Canada and its impact on the construction projects performance focusing on cost, schedule, and safety.

At the strategic level, RT-318 followed two parallel paths to investigate the labor cliff. Following a literature review, the first track sought to identify the location of the labor cliff based on an extensive analysis of secondary data sources. The second track constructed a database of completed projects using data from an RT-318 survey and the CII Benchmarking and Metrics Database. Statistical regression analysis was used to develop the Craft Risk Availability Forecasting Tool (CRAFT) which quantifies the risk posed by labor availability on project safety, cost, and schedule performance. These parallel research paths derived the following conclusions and recommendations:

• The demographic craft labor cliff is here, and it is impacting project performance.
• The cliff varies by trade and region. The Southwest and Southeastern United States are currently experiencing skilled craft shortages, particularly among welders, pipefitters, and electricians.
• There are significant declines in real wages and widespread use of per diem to attract the needed craft. Construction craft workers feel less pride in their work and are increasingly focused on higher wages at a time that the wage gap between construction craft labor at all other industries has shrunk.
• The average age of the U.S. construction craft workforce is increasing four times faster than all other U.S. industries during the last decade.
• Lack of educational attainment among the Hispanic workforce serves as a barrier to Hispanics moving into higher skilled trades where there is great demand such as welding, pipefitting, and electricians.
• Decline in career and technical education among high schools across the country and the emphasis on four-year degrees as a path to career success.