Outlook 2018: The Year of the Construction Worker
Solving the labor shortage with technology
Today there is a skilled labor shortage in the construction industry that is impacting nearly every business.
Looking at the preliminary November numbers, the industry employed 6.9 million workers, up by 184,000 throughout the past year, but it is still 568,000 below its peak in 2007, according to the BLS (Bureau of Labor Statistics), www.bls.gov, Washington, D.C.
What’s more, the most recent job openings and labor turnover report from the BLS shows that total job openings in all industries have been at or near record high levels since June. In October, job openings increased in construction by 48,000, bringing the total number of job openings in construction to 227,000.
This impacts the construction industry in a number of different ways. Project timelines need to be extended and wages need to increase at a faster rate. Basically, the labor shortage is costing construction companies both time and money.
This is where technology enters the equation. Technology can help in myriad ways, offsetting existing challenges in construction. Not only does the data gathered from technology provide insight into how to streamline processes, but emerging technologies will also help take the burden off of workers, creating a safer and more productive jobsite. It could potentially even inspire new tech-savvy workers to join the field.
The Next Generation
The worker shortage comes at a time when the jobsite is full of many different types of workers—from baby boomers to millennials, and pretty soon, Gen Z. Understanding how these different generations work and think becomes critical to implementing new, emerging technologies in the months ahead.
Baby Boomers: Born between 1946 and 1964, this generation traditionally have been loyal to their careers and employers, having a strong work ethic. When it comes to technology adoption, they typically acquire the skills they need to get the job done, but tend to be a little bit more hesitant about new adoption.
Generation X: Born between 1965 and 1980, this generation is cautious, conservative, and saves, while also working smarter with greater output. This generation tends to assimilate to technology adoption as needed.
Millennials: Born between 1981 and 2000, this is one of the first generations to grow up in a digital world. While they can be ambitious, they are not entirely focused, as they are always multitasking and tend to look to what’s next in terms of a career. Still, this generation focuses on change using technology.
Gen Z: This generation is younger than 21, and tends to think and act more like a boomer than a millennial. This new, emerging workforce has a keen focus on money, savings, debt, spending, and retirement. Some are even calling it the “throwback generation.”
Understanding how these different generations work and think becomes critical to implementing new, emerging technologies in the months ahead.
Looking a bit deeper, Pew Research, www.pewresearch.org, Washington, D.C., says Millennials surpassed Baby Boomers as the nation’s largest living generation back in 2016. Meanwhile, Gen Z is now the fastest growing generation that will soon be on the jobsite.
According to a research report from Alexandra Broennimann, a consumer behavior specialist, research, and university lecturer, by 2019, Generation Z will represent more than 20% of the workforce.
Further, 68% of this group is willing to work hard on nights and weekends, while 78% are willing to relocate for a better job opportunity. Also, 64% believe they need to work harder than the previous generations.
She adds smartphones are an extension of their body and they are ‘speaking the language of technology as their mother tongue.’
Understanding the different generations is critical to technology implementation and adoption at the jobsite. It is also essential to solving the skilled labor shortage dilemma the construction industry currently faces today.
Workers Help Innovate
For the industry, bringing people, process, and technology together is crucial to move business and the industry forward.
This is something that Suffolk Construction, www.suffolk.com, Boston, Mass., understands. Chris Mayer, chief innovation officer, Suffolk Construction, explains, “Any time you can facilitate smart people working together then good things happen.”
Suffolk has been on a journey since 2010 to embed its Build Smart vision into the very fabric of its business. This is to bring a different way of planning and control, incorporating lean principles, modeling, and innovative construction technologies.
Building on that, the company recently unveiled its Smart Labs to identify, test, and scale new technologies. The objective is to empower project teams to explore innovative ways of leveraging new tools and technologies to provide value for the client.
“The answer to anything that is related to technology is yes. It is just a question of time, scope, and money,” says Mayer. “We wanted to start to create an environment where people could understand what the state of the possible was and not just assume that it would be too expensive or was too far out on the horizon to make sense for us to pursue.”
Some of the technologies included within the Smart Labs include a data wall, huddlewall, virtual reality CAVE, and jobsite feeds—all of which are very interactive technologies. Mayer believes technology can help with the skilled labor shortage as well.
“The things that create unique value are where you want to let your really talented people spend most of their time because that is what can help differentiate,” he explains. “I think that is where I see the opportunities for the Smart Labs … to support people in doing those things that create unique value.”
This type of innovation will enable construction to increase both technology and productivity—something that are traditionally low in construction compared to other industries. This is only reinforced by the often cited McKinsey, www.mckinsey.com, New York, N.Y., numbers that show labor-productivity growth in construction has averaged only 1% a year throughout the past two decades, compared with growth of 2.8% for the total world economy and 3.6% compared against manufacturing.
Recognizing that the construction industry’s productivity and technology adoption have been pretty low and haven’t kept pace, Bechtel, www.bechtel.com, San Francisco, Calif., set out on a journey roughly 24 months ago. “The company established the Future Fund to find and resource new, disruptive ideas from our employees and suppliers, colleagues, and customers—inside and outside of the EPC industry,” explains David Wilson, chief innovation officer, Bechtel.
Through innovative solutions, including wearable devices, mobile work stations, and virtual reality applications, Wilson believes that more decisions are going to move closer to the workface without having to travel or without having to hunt or track down resources. This will ensure Bechtel gets the right resource to the right person at the right place at the right time, either predictively or on demand.
Wilson recommends establishing a vision for what future work might look like. “It doesn’t have to be perfect, but at least define a North Star, and then create a structure allowing experimentation and exploration of new technology, quickly killing ideas or advancing incrementally proven innovation.”
For Bechtel, all innovation and technology adoption has some impact on cost, schedule, safety, and quality, ensuring the implementation is beneficial for the company.
Creating the Right Culture
In order to entice younger workers to join the industry, businesses need to create a culture that is both innovative and safe.
“It is really a cultural shift more than anything else,” explains Benard Ruf, director of operations, Lettire Construction, www.lettire.com, New York, N.Y. “It is being dedicated to finding ways to improve not just the efficiency of your jobsite, but the safety of your jobsite, and they work hand-in-hand at the end of the day.”
Ruf goes on to explain that technology—specifically wearables—will follow the same pattern as hard hats. Early adopters are experimenting with the tech now, but soon it will become a good practice requirement, and before long it will be required on all projects.
Enter wearable safety technology, which can help from a compliance standpoint because it can track as soon as somebody is on the job or not on the job. The company uses the technology for monitoring of manpower and workforce statuses. The particular system Lettire is using is the Spot-r system, which operates on a closed mesh network that cuts through steel and concrete and automatically clocks workers on the worksite. It includes the network hardware and wearable sensors that are clipped to workers’ belts.
The outcome is greater visibility, improved communication and safety, and reduced time spent tracking down information. It also helps Lettire adhere to city jobsite compliance regulations, streamlines evacuation procedures, and helps enable proactive risk management.
Ruf explains that it improves both safety and productivity, but it also changes the culture of the construction project. “I think what we saw is it is somewhat of a placebo effect once you actually get the culture of the workers understanding what the tool is,” he continues. “Wearing the tool, just like you would with a hard hat, actually increases the jobsite safety all by itself.”
And this is just one example. There is a cultural shift that is happening across many areas of construction companies right now that are going to change the way construction companies do business.
Still, the data and analytics that technology can provide both in the office and at the jobsite can have a very significant impact on both safety and productivity as well. Un
derstanding and analyzing this data will actually prevent accidents or safety hazards from even occurring in the first place.
“A predictive analytics platform is capable—with enough data—of actually providing a probability of an incident occurring, an accident or an injury occurring, as a result of specific behaviors or conditions that are noted,” says Gary Glader, president, Horton Safety Consultants, www.thehortongroup.com, Orland Park, Ill.
He explains that statistically, for every one death in the workplace, there are about 30 serious injuries, 300 minor injuries, 1,500 close calls or near misses, and 20,000 unsafe behaviors or conditions. Essentially, what the tech does is it incorporates an algorithm that takes into consideration that pyramid.
Glader acknowledges that many companies are concerned about a shortage of qualified labor and just need any warm body on the jobsite, but he asks, “do you really want to hire the person who could potentially become your next million-dollar work comp claim?”
His stance points to the fact that construction companies need to focus on hiring the right people, even amid a labor shortage, and technology can help fill in the gaps.
Mayer of Suffolk sums it up best when he explains that technology can help with the labor shortage, but humans are the ones that provide the unique value to business. It is a matter of identifying where technology can streamline and automate processes, enabling the workers to focus on the job at hand.