While several headwinds facing the housing market are more cyclical in nature, the challenge related to the construction labor shortage is a constant. The strain of the labor shortage has been more subdued as home building volumes are lower, but the quality and quantity of skilled labor will remain a significant limiting factor for construction as activity scales back up.
The issue consistently ranks as a top concern for builders surveyed by the NAHB. Chief economist Rob Dietz says the labor shortage is a “critical issue” discussed in each market he visits across the country. The industry’s labor challenge is multifaceted; at the same time workers are aging out and retiring from the workforce, the industry is struggling to attract younger generations to careers in the trades. Recent estimates suggest that for every five people that retire, the industry is bringing in approximately two new workers.
According to estimates from the most recent Home Builders Institute (HBI) Construction Labor Market Report, the required amount of construction workers needed per year is 723,000. For the period between 2024 to 2026, this estimate represents the need for an additional 2.17 million adjusted net hires for the industry. Ed Brady, CEO of the HBI, has previously shared with Builder that there are no quick fixes to the labor shortage and the correction in the labor market is “going to happen over a generation.”
Recognizing the need for additional skilled labor, industry organizations, including the HBI, Building Talent Foundation (BTF), The Home Depot, and Lowe’s, are piloting efforts to encourage individuals to consider careers in the trades and support local organizations with skilled training focuses.
After monitoring the skilled trades workforce gap, the Lowe’s Foundation in 2023 launched a goal of preparing 50,000 people for careers in the trades over a five-year period through a $50 million commitment. To date, the Gables Grant program has provided support for 35 community and technical colleges, community-based nonprofits, and national nonprofits across 27 states.
While the labor shortage remains a long way from being solved, Betsy Conway, director of the Lowe’s Foundation, says anecdotally, demand is strong for training programs Lowe’s is supporting through its Gable Grants.
“Across the board, the demand for these training programs is very strong and part of why we chose to partner with each organization,” Conway tells Builder. “Each grant recipient has a unique way of addressing the local needs, whether that’s bringing training to incarcerated learners through mobile classrooms or hiring new instructors to support a larger volume of students aspiring to these careers.”
In a conversation with Builder at the end of August 2023, Brady shared optimism for the future of the labor shortage because perceptions of certification credentialing compared to four-year universities were beginning to shift. Survey data collected by the Lowe’s Foundation also supports these observations of increased interest in vocational-focused training.
“The Lowe’s Foundation survey found that awareness of trades training opportunities at community colleges and nonprofits has grown more than 10% since 2023,” Conway says. “This correlates with the growing number of students enrolled in vocational-focused community colleges. Enrollments rose 16% last year—the highest level since the National Student Clearinghouse began tracking such data in 2018.”
Data from the National Student Clearinghouse Research Center for 2023 indicates enrollment for community colleges with a high vocational program focus increased by 117,000, or 17.6%, compared to 2022 and surpassed pre-pandemic enrollment for 6.1%. Trade-focused programs, which include mechanic and repair technologies, precision production, and construction trades, saw high enrollment growth year over year in 2024. Enrollment for majors with a focus on construction trades increased by 8.1% at undergraduate two-year institutions.
Total enrollment for construction trades-focused majors at two-year institutions was 71,585 in 2024, the highest since data began being tracked in 2018, according to the National Student Clearinghouse Research Center. Within the construction trades field, electrical and power transmission installation; building/construction finishing; management; inspection; carpentry; and plumbing and related services are the most popular sub-specialties at two-year institutions.
Construction trades ranked as a top 10 major for total enrollment at two-year institutions in Florida, Kansas, Kentucky, Louisiana, Maine, Minnesota, Nebraska, Ohio, Oregon, South Dakota, Utah, Washington, and Wisconsin.
Despite the increases and percentage gains for enrollment, the numbers are still below what the construction industry likely needs to fill its shortage of nearly half a million workers. Efforts to shift perceptions and messaging from parents, counselors, and school boards to younger individuals are as important as the efforts to reach the next generation of skilled labor.
“From building and maintaining homes to critical infrastructure, shoring up America’s skilled trades workforce benefits us all,” Conway says. “In addition, the skilled trades offer fulfilling and lucrative careers, not just jobs. Our collective commitment to these training programs is good for business, good for those entering—and already in—the workforce, and communities we serve.”
Reaching the Next Generation
As part of its Gable Grants program, Lowe’s has conducted on-site visits to grant recipients to better gauge the challenges facing organizations on the ground. The Lowe’s Foundation also hosts quarterly meetings, in-person convenings, and workshops with grant recipients to allow for peer-to-peer learning and knowledge sharing.
The HBI has opened two additional training facilities and BuildStrong academies in 2024, in Sacramento, California and Charlotte, noting the lack of skilled labor in each market and the impact on the local economy and infrastructure development. In total, the HBI has seven training academies across the country in Orlando, New Orleans, Houston, Phoenix, and Denver in addition to Sacramento and Charlotte.
“We are in a crisis which not only impacts home builders, but it also affects consumers and communities everywhere,” Brady said at the opening of the Sacramento training facility. “HBI is training the next generation of skilled workers and ensuring the supply of construction labor for several generations.”
Additionally, the HBI’s Pre-Apprenticeship Certificate Training curriculum is available at 67 Job Corps locations across 42 states.
The BTF, an organization established by 20 home builders to develop the residential construction workforce, is on track to serve 300,000 individuals, place 30,000 individuals into jobs or training programs, and reach 30 markets by the end of 2025. According to the organization’s most recent Impact Report in 2023, nearly 16% of the individuals placed by BTF were female, 68.5% were people of color, and 73.3% were individuals under the age of 30, helping the industry become both more diverse and younger.
The Home Depot Foundation’s Path to Pro program has helped train nearly 43,000 participants and introduced more than 245,000 people to the skilled trades, surpassing its initial commitment to train 20,000 people six years ahead of schedule.
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