Building boom intensifies competition for skilled workers

When the construction industry screeched to a halt during the Great Recession, James Kamenar was doing everything he could to keep a job.

The time he wasn't swinging a hammer he spent going to school for training and sending out resumes.

Times have changed. About a month ago, Kamenar was offered a position as a project superintendent at RBVetCo, a contractor in Carnegie. It was a step up from his gig as a carpenter. And he wasn't even looking for a career change. The job came to him.

“I know that right now, the industry is looking for good guys,” said Kamenar, 42, of Kennedy Township. “I get phone calls a lot.”

Competition for skilled workers is growing fierce as a rebound in home and commercial construction squeezes a shallow talent pool. It has forced firms to raise wages, develop training programs and rely on subcontractors and recruiters to fill out their payrolls even as they poach the most experienced talent from each other.

Industry analysts say the pressure has been building for decades, but was thrown into high relief the past year as pent-up demand for projects put on hold during the recession strains a thinning pipeline of workers.

“You've got a drop off in the workforce at a time when work is scaling up quite a bit,” said Jeff Burd, who tracks the construction market with Tall Timber Group, a Pittsburgh-based company that follows the construction industry. “It went from being a coming concern to an immediate problem over the last 12 months.”

About nine out of every 10 contractors say they are having difficulty filling key positions in their crews, according to a nationwide survey released last week by the Associated General Contractors of America, a trade group in the Washington area.

The situation is no different in Pennsylvania, where only 8 percent of firms surveyed said they were not worried about finding enough workers.

Developers and contractors say that the shortages of skilled workers so far have not led to cost overruns, but that the impact for their bottom line is a concern if the worker shortage continues much longer.

More than half of the firms surveyed by AGCA said they were increasing base pay rates to keep experienced workers, and 43 percent have relied more heavily on subcontractors. Some are using recruiting firms, which charge a 15 percent to 20 percent finders fee.

The biggest concern from having inexperienced laborers is the unpredictable productivity, Burd said. This can add to project costs because contractors will need more hours to complete work. And missing a construction deadline can cause other problems, like losing a key tenant.

“If it's a commercial building, it can be catastrophic,” Burd said. “If I'm building it for a major tenant and I'm going to be six months late, the tenant can up and leave.”

In greatest demand are project managers and carpenters. Many left the industry as home building stalled during the recession and have either moved on to other industries or retired, Burd said.

That is why Russell Heyz, of RBVetCo, didn't hesitate to hire Kamenar even though he had no immediate position available.

Kamenar has 15 years of experience and multiple associate degrees in construction-related fields, plus certifications in specialized areas like green building. He was a rare gem.

“I interviewed him and I'm like, ‘Oh my god, if I don't hire him, I'm going to lose him,' ” Heyz said. “I don't have a place to put him, but I've got to hire him.”

Kamenar wasn't idle for long. A week passed before he was on a project.

Western Pennsylvania contractors have added 3,200 workers to payrolls in the past year, as a boom in hotel building, rebound in housing and ramp up of state-funded road projects from the 2013 transportation bill has kept firms busy.

Housing starts in the Pittsburgh region the past two years has been higher even than in the boom times between 2004 and 2005, mostly because of increased apartment construction, according to Tall Timber figures. And hotels continue to go up at a brisk pace. There are 6,524 rooms in the pipeline, which if built would expand the supply by 25 percent, according to PFK Hospitality Research, a division of Los Angeles-based commercial real estate firm CBRE Inc.

About 40 percent of the construction workforce is 45 years of age or older, according to the U.S. Census Bureau. That means there are 3.7 million construction workers who will be approaching retirement within the next 10 years.

The situation has forced contractors to get proactive.

The Master Builders Association of Western Pennsylvania has been recruiting veterans, minorities and even reaching out to grade schools to generate interest in a career in the trades.

Massaro Construction Management Services in O'Hara helped start an outreach program this summer in the Hill District to help prepare people for a construction job, said Steven Massaro, the firm's senior vice president.

“We're trying to communicate to every group of individuals that we can,” he said.

Enrollment in apprenticeship programs is growing — new applicants doubled this year for the electrical apprenticeship program run by the Western Pennsylvania chapter of the Associated Builders and Contractors Inc., said Katy Rittle, director of education and workforce development.

Developing a robust pipeline of talent will take years, but Heyz, of RBVetCo, said he can't wait for them to get up to speed. He needs them now.

“I just need to bite the bullet now and hire the apprentices,” he said. “I'm going to start planting the seeds now so I can reap the crops down the road.”

Of course, he'll need experienced talent like Kamenar to train them. Which is why Kamenar, who once had regular periods of unemployment, expects to be busy for some time.

“Now, I am very confident,” Kamenar said.

Source: Tribune Live