There is no doubt about it, labor shortage is probably today’s biggest challenge to the construction industry; and steel-based companies are not oblivious to what is taking place. For the last 14 months, I’ve been the chief designer of a structural steel product aiming to simplify the erection of steelwork on site. I’ve been in constant communication with steel manufacturers in the United States, Canada, and Mexico. In Puerto Rico for instance, where steel manufacturers are usually the erectors too, most have not added new labor for the last five to 15 years. When need to, they hire from the competition, increasing wages and diminishing the company’s profits. It’s getting harder to hire younger welders and other technicians. It is a serious and growing problem.
We all know the factors up to this point. We have read about the slower population growth, the aging workforce, millennials perception of the industry, and that this trend is expected to continue for the next decade. The consequences are many and are slowly impacting every player in the construction industry.
I’ve experienced the consequences of this problem myself. My company is a customer to steel manufacturers. Though I haven’t noticed price changes for their services directly, I did noticed longer delivery periods. I had to wait up to seven weeks longer than usual to receive my order. It may seem like good news for steel manufacturers for having more work load that they can quickly manage, but this is happening at expenses of shorter profit margins while also impacting their customers work.
In 2018, I participated in the National Science Foundation I-Corps program and I spent seven weeks meeting with real estate developers, engineers, and steel erectors in the U.S. and Mexico. We met with more than a hundred, seeking information about their businesses pains. They complain about the same issue: longer delivery periods trigger schedule delays and shorter profit margins in the long run.
Being realistic about the lack of an immediate solution to the labor shortage among steel welders and fabricators; some steel manufacturers are heading toward automation and the robotization of the process. Others, especially those manufacturers that fold as steel erection companies, are also hoping for construction technologies that allows them to simplify the installation of the steel on site with fewer personnel. Basically, they are all expecting solutions so they can prescind from skilled labor in the future.
All steel manufacturers and steel erectors agree that technology will help their companies to overcome this foreseeable crisis. However, they also agree that innovation is something the construction industry has fallen behind. In most of my conversations with them I hear they want something new to improve their businesses, but there is nothing out there. The problem is that they seem to be waiting for the solution to appear and not taking any action about it. They are not searching for alternatives to prevent a more acute labor shortage. Probably because they don’t know where to start.
Since I lead a construction technology startup, I have searched for steel-based solutions and they surely exists. Nevertheless, it seems that they don’t quite fit to the solution that steel manufacturers want. This is because normally steel structural solutions focus on the structural engineer and the architect’s pain, and not necessarily in the manufacturers.
As the labor shortage continues to increase, there is no doubt it will jeopardize the operations of both steel manufacturers and steel erection companies. Those who will avoid the struggle of finding new workforce in an even harsher labor environment will be those investing in new technologies, allowing them to evolve their businesses today. Reskilling, training, and new talent attraction could be insufficient to tackle the labor shortage magnitude in the future. The research and development of new construction technology, and the investment on emergent innovations targeting the simplification of both the fabrication and construction processes will be the key toward a permanent solution to the labor shortage crisis.
Wilfredo Méndez Vázquez is founding president of construction technology startup, Zero Damage LLC, and professor at the School of Architecture of the Catholic University of Puerto Rico. He can be reached at firstname.lastname@example.org