Thursday, November 12, 2015

Skilled Labor Shortage Intensifies Despite Economic Recovery, According to FMI 2015 Talent Development Survey



Industry Calls for Standard Frameworks and Productive Conversations on Talent Retainment and Development

RALEIGH, NC, October 12, 2015 - FMI Corp, a leading provider of investment banking and management consulting services for the engineering and construction industry, has just released its 2015 Talent Development Survey in the Construction Industry, and the results reveal intensifying labor shortages, a widening gap between employer offerings and employee demands, and a lack of standard processes and frameworks among the top findings in the survey.

“People-development is critical to companies’ future success and ability to stay competitive. It is especially important in an environment of skilled labor shortage and increasing competition.” said Chris Daum, president of FMI Capital Advisors. “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 retaining, labor force structure and dynamics, standard processes and frameworks, measurements, succession plans and corresponding company development strategies. The survey examines the challenges and trends impacting the construction industry as well as identifies the training strategies that are now required to maximize performance and development.

Skilled Labor Shortage Grew Over 30 Percent

One of the leading findings is that skilled labor shortages are intensifying and broadly affecting construction firms. The survey shows 86% of respondents reported that their company was experiencing skilled labor shortages, compared with only 53% two years ago, a 30% increase in the gap. This situation stems from the structural mismatch of labor capabilities and employer demands, as well as the continuing fallout of the last recession. Moreover, the extent of labor shortages is probably more severe than expected and is starting to impact construction firms nationwide.

The survey also reveals an intriguing mismatch where employee engagement is concerned, especially among millennials. Employers surveyed cite offering competitive pay (89%), providing an enjoyable work environment (81%) and offering training opportunities (76%) as the top-three methods they use to retain key talent in the construction industry. Conversely, millennial employees list the top three important factors for keeping them engaged are competitive pay (29%), work-life balance (23%), and personal development (16%).

Other key findings include:


  • Companies in the construction industry lack processes to develop and promote high-performing employees.
  • Executives and field manages are expected to have the highest attrition rates over the next five years.
  • The majority of firms don’t 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.


Business Implications

The 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 firm-wide 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.

Source: FMI

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