FMI Corp., provider of investment-banking and management-consulting services for the engineering-and-construction (E&C) industry, recently released its 2015 Talent Development Survey in the Construction Industry, which reveals intensifying labor shortages, a widening gap between employer offerings and employee demands, and a lack of standard processes and frameworks.
“People development is critical to companies’ future success and ability to stay competitive,” Chris Daum, president of FMI Capital Advisors, said. “It is especially important in an environment of skilled-labor shortage and increasing competition. Firms need to have strategic and holistic processes in place for recruiting and retaining talent in order to stay viable today and in the future.”
The survey, taking insights from executives and employees of companies in the E&C industry, presents findings on various aspects of people development, including talent retention, labor-force structure and dynamics, standard processes and frameworks, measurements, succession plans, and corresponding company-development strategies. The survey examines challenges and trends impacting the construction industry and identifies training strategies required to maximize performance and development.
Skilled-Labor Shortage Grew Over 30 Percent
One of the survey's key findings is that skilled-labor shortages are intensifying and broadly affecting construction firms. Eighty-six percent of respondents reported their company was experiencing skilled-labor shortages, compared with only 53 percent two years ago, a 30-percent increase. This stems from the structural mismatch of labor capabilities and employer demands, as well as continuing fallout of the last recession. Moreover, the extent of labor shortages probably is more severe than expected and starting to impact construction firms nationwide.
The survey also reveals an intriguing mismatch where employee engagement is concerned, especially among millennials. Offering competitive pay (89 percent), providing an enjoyable work environment (81 percent), and offering training opportunities (76 percent) were the top three methods for retaining key talent reported by employers. Conversely, competitive pay (29 percent), work-life balance (23 percent), and personal development (16 percent) were identified by millennial employees as the three most important factors for keeping them engaged.
Other key findings include:
- Companies in the construction industry lack processes to develop and promote high-performing employees.
- Executives and field managers are expected to have the highest attrition rates over the next five years.
- The majority of firms do not connect training expenditures and performance-management metrics.
- Annual performance reviews are a top priority for increasing employee performance and development.
- Having a defined and well-communicated vision is critical to retaining key talent, regardless of age.
Talent Development Survey in the Construction Industry offers a roadmap for companies looking to strengthen existing people-development programs and build out future talent-retaining strategies. Companies can benefit from developing a firmwide vision that encourages culture and building project-management and field-supervision capacity. In the meantime, companies can invest in creating and implementing an effective performance-management process.
To download the full survey report, click here.