Labor shortages in the construction industry have become a critical factor in driving up home prices. This issue directly impacts the pace and cost of home construction. Fewer workers mean longer project timelines, reduced housing starts, which directly impacts inventory, and increased expenses. These are costs that are passed on to buyers in the final price they pay for a home.
Consider also that average hourly wages in construction have risen by about 5 percent in the last year, surpassing the private-sector average, as companies compete for scarce talent. This is especially true in the fragmented Kansas City market.
David Elliott, owner of Construction and Planning Services (CNP) explains that the market here is made up of more than 400 builders and a lot of very small contractors. “All of these businesses are competing with each other for labor.”
Elliott’s company specializes in wood framing and rough carpentry for residential and commercial projects. “I have 30 employees who have worked for CNP for many years,” he explained. “And we offer good pay and benefits to remain competitive.”
Greg Kudrna, president of operations for Henges Insulation, also stressed the need for companies to pay competitive wages and offer benefits to attract and keep workers. Henges installs thermal insulation in new construction single family homes, some multi-family homes and apartment complexes.
Developing a Future Workforce
Despite the industry adding jobs, Elliott and Kudrna know more work still needs to be done to develop the future workforce. As members of the KCHBA Workforce Development Committee, both are promoting the industry to high school and technical school students.
“We have been speaking to groups of young people throughout the metro area getting the message out about careers in the skilled trades,” Kudrna said. “We need plumbers, electricians, welders, insulation installers, framers, HVAC professionals, industrial technicians and more, and we are talking to high school freshmen now about careers in the industry.”
There’s a lot to offer for students who may be looking to enter the workforce after graduation, get on the job training and earn a paycheck at the same time. Kudrna says even for those who want to attend college later or earn a certificate in their chosen trade, those credentials, along with job experience will make them very marketable to employers.
They not only just speak to these groups but provide hands-on opportunities to learn on the job and participate in work projects to further develop their skills and show them what careers are available.
Kudrna and Elliott are out to change public perception about the skilled trades, and they are starting to see change in their engagement with communities and students. “We have both been able to support our families doing this work,” Elliott said. “It’s good work, it’s hard work, but there are plenty of opportunities to learn and grow your career.”
As both men look to the next chapter in their lives, they will remain firm in their commitment to bring along the next generation of workers.
In addition to the Workforce Development programs, the KCHBA job board is also a resource for job seekers.
Visit kchba.org to learn more.
This article on labor is the fourth in a series about the 5L’s of homebuilding and how all five factors affect the cost of new and existing homes.