Scott Ball / Rivard Report
Historically low-unemployment numbers in San Antonio are a welcome sight to just about everyone, but they add to an ongoing problem the construction industry has been grappling with in Texas for years — labor shortages.
Currently, there is too much work in the industry and not enough workers to do it, especially when it comes to professional trades such as carpenters, concrete workers, electricians and plumbers, industry leaders say.
Construction company executives and trade association leaders say the problem stems from a variety of factors, including an aging American workforce; fights among politicians over immigration which would likely add more labor to the sector; and a culture that tells young people four-year degrees are the way to get ahead, not learning trades.
In April, the Federal Reserve Bank of Dallas released data showing March unemployment numbers in San Antonio were 3.1 percent, a near 20-year low. With so few people seemingly out of work, the construction industry has limited options to add more workers.
“Workforce shortages continue to affect San Antonio across the board from our hourly carpenters and laborers through the professional project management team,” said Albert Gutierrez, President of the San Antonio chapter of the Associated General Contractors. “Subcontractors are experiencing the same workforce shortages and this shortage has impacted how well subcontractors can serve and, or accommodate our project schedule demands. These workforce shortages in a robust economy have also created wage pressure where the cost of projects are increasing.”
Jobs in construction grew by 11 percent in the first quarter of 2019, but that was partly due to more work being available after a soggy fall in the area slowed building projects. Despite that vigorous growth, numerous companies said they’ve had to turn down work or hold back bidding on projects because they can’t find enough skilled trades workers to meet their needs.
“We’ve probably had to turn down at least three or four projects just in the last three weeks,” said Blaine Beckman, vice president of operations and business development at FA Nunnelly General Contractor. “FA Nunnelly is growing quickly and we have a growth plan in place, but the most dangerous thing as a company you can do is outgrow the quality personnel you have to build the job.
“So our biggest problem that we could get ourselves in is if we took on more work than we had the right people to build it because you don’t want to just put warm bodies on a project and just expect it to go well.”
Brian Lennard, vice president at T&D Moravits & Co., a concrete contractor, said his company works in commercial, multi-family and residential and simply doesn’t have the manpower to do all the work it could possibly be doing this spring.
Lennard said one predictable outcome is that some local work is beginning to be contracted to out-of-state market and out-of-state companies and there are new startup companies trying to get involved in more projects, even though they face the same labor problems as established competitors.
Labor shortages in the construction industry have existed in San Antonio and other parts of Texas for much of the past decade. Industry leaders have taken steps to combat the problem longterm through educational programs at the high school and college levels such as the Construction Careers Academy at Earl Warren High School.
The industry even created a website devoted to the problem. Maryanne Guido, CEO of Guido Construction Company, said the industry is seeing some of those educational efforts begin to bear fruit but it’s a slow answer to a problem that needs a more immediate impact.
“Yes but slowly, AGC local and national is working to support trade and academic programs starting in middle school and offering scholarships towards those professional careers,” Guido said. “A tradesman now with experience can earn $50,000 – $100,000 a year or more. It is a very rewarding career path and we are working to get that message out. The AGC National Education Foundation has consistently awarded $500,000 – $600,000 a year in scholarships. That’s putting your money where your mouth is.”
But solutions rooted in educational programs take time to respond to the problem, and with San Antonio growing faster than any other major metropolitan city in the country, industry leaders and company executives can’t afford to be patient. And waiting for national and state political leaders to work out solutions to immigration policies, which would likely aid the construction labor shortage as well as the farm labor shortage, could take years.
Therefore, companies are left to compete for workers either by offering better wages than their competitors or finding ways to retain current employees and subcontractors through bonuses and perks and settle for doing as much work as the current workforce can effectively manage.
The labor shortage is not unique to craft trades but more industry-wide, making it difficult even to find qualified people to serve in management roles and positions such as job estimators, said Doug McMurry, vice president of the San Antonio chapter of the AGC.
“What we’re trying to do is just offer competitive wages or pay rates, and we offer good benefits with medical and 401k plans and bonus structures that a lot of our competitors probably aren’t doing,” Lennard said. “We bonus all of our employees at least annually. All of our foremen, we have a separate program set up where they get quarterly bonuses based on performance.
“I think that is really the most important is just having a good reputation and people saying it’s a good place to work. That’s when guys come in from the outside who want to work and want to stay with the company.”
Beckman said FA Nunnelly has embraced the reality that it might be best and most cost-effective to handle at least some of the training in-house. Doing so assures the company of getting employees it knows are well equipped to do competent work. Beckman, who began his career in the trades before eventually getting bachelor’s and master’s degrees in business to complement his skills, said he is a big believer in the idea that college is not for everyone.
He said the construction industry has to combat the notion Americans have been told for decades that a four-year degree from a major college is the only way to succeed.
“With the workforce shortage, you can’t expect to find the top-notch candidate who is just ready to hit the ground,” Beckman said. “You have to be willing to kind of think outside the box as to where you find quality people, whether it be veterans who are looking to enter back into the workforce; whether it be maybe some of the different programs with people who are getting out of prison. …We can no longer just go the casual route of putting out the job ad and expecting to get that perfect candidate. We have to actually bring people in and train in-house.”