Blue­print for build­ing cri­sis

Colorado has mas­sive shortage of con­struc­tion work­ers

The Denver Post - - FRONT PAGE - By Erin Dou­glas

In a 25,000-square-foot ware­house that smells of freshly cut wood in north Den­ver, 20 adults — in­clud­ing a refugee fam­ily from So­ma­lia, a math teacher and a laid-off re­tail worker — gather in the un­fin­ished frame of a house to take notes on the Pythagorean the­o­rem.

They are hop­ing that the equa­tion, along with other ba­sic mea­sur­ing prin­ci­ples, will help them find work at the end of an eightweek con­struc­tion course.

“When the mar­ket crashed in 2008, a lot of peo­ple were forced to do some­thing else. Now that the in­dus­try is boom­ing, there’s re­ally not that qual­ity crafts­man­ship any­more,” said Tim Reyna, who en­rolled in the class at the Colorado Home­build­ing Academy after he lost his re­tail job. “I def­i­nitely think there’s a ton of op­por­tu­nity.”

As far as the con­struc­tion in­dus­try is con­cerned, Reyna and his class­mates can’t hit the job mar­ket quickly enough. In­dus­try of­fi­cials in Colorado say the shortage of skilled la­bor­ers is at a cri­sis level. They need peo­ple now — to build homes, malls, of­fice build­ings and roads.

In a state with a red-hot real es­tate mar­ket and hun­dreds of new res­i­dents ar­riv­ing each day, the sit­u­a­tion isn’t ex­pected to im­prove any­time soon. Ex­perts at Colorado State Univer­sity’s depart­ment of con­struc­tion man­age­ment es­ti­mate that by 2025 there will be 96,000 va­can­cies in the con­struc­tion trades — a 38 per­cent in­crease from to­day.

Con­struc­tion lead­ers say the prob­lem was caused by a per­fect storm: record low un­em­ploy­ment, an ag­ing work­force, the nar­ra­tive that ev­ery­one has to go to col­lege, mas­sive lay­offs of con­struc­tion work­ers dur­ing the re­ces­sion who never re­turned, a lack of af­ford­able hous­ing and a huge de­mand for con­struc­tion work across Colorado.

“I don’t know some­one in con­struc­tion that doesn’t have this shortage is­sue,” said Michael Smith, di­rec­tor of the academy, a non­profit that trains work­ers for con­struc­tion jobs. “Colorado is ex­pe­ri­enc­ing (an ex­plo­sion) in ev­ery sec­tor of con­struc­tion.”

And the shortage is im­pact­ing ev­ery­one from home­buy­ers who are reel­ing from sticker shock to com­muters who are fed up with pro­longed work-zone traf­fic.

By 2025, the state ex­pects to add 56,000 new con­struc­tion jobs, and 40,000 more could be­come avail­able be­cause of re­tire­ments, ac­cord­ing to an eco­nomic im­pact study re­leased in Jan­uary by the CSU re­searchers. Right now, the in­dus­try em­ploys 148,604.

The shortage is na­tion­wide but par­tic­u­larly dis­tress­ing in Colorado, a state with the low­est un­em­ploy­ment rate in the coun­try (2.3 per­cent) cou­pled with one of the high­est growth rates. In other words, there are a lot of things to build and too few peo­ple to build them. As some ob­servers put it, if you are un­em­ployed in this state now, there’s a rea­son — typ­i­cally a lack of skills.

To high­light the need in Den­ver, Colorado As­so­ci­a­tion of Me­chan­i­cal and Plumb­ing Con­trac­tors ex­ec­u­tive vice pres­i­dent and chief ex­ec­u­tive Dave Davia said, “Count the cranes.”

Any­one with a stake in Colorado con­struc­tion is fran­ti­cally try­ing to come up with so­lu­tions to meet the mount­ing de­mands of a grow­ing pop­u­la­tion be­fore cir­cum­stances be­come too dire. Some say they al­ready are.

Statewide pop­u­la­tion is ex­pected to in­crease to 6.43 mil­lion by 2025 — adding nearly a mil­lion more peo­ple in a decade — and it’s pro­jected to hit 7.3 mil­lion by 2035, ac­cord­ing to the State De­mog­ra­phy Of­fice. Den­ver alone needs be­tween 16,000 and 18,000 new homes per year to keep up, ac­cord­ing to John Covert with the Den­ver Metro As­so­ci­a­tion of Real­tors. But last year, only 11,038 home starts were counted across Den­ver by Met­ros­tudy, a Han­ley Wood com­pany that tracks home foun­da­tions.

“The bot­tom line is that there is a sig­nif­i­cant amount of new work­ers that are needed to sup­port this work. If those work­ers are not here and not trained, then there’s a fear that some of those projects won’t be able to hap­pen,” said Tony An­der­son, train­ing and busi­ness de­vel­op­ment man­ager for the Colorado Of­fice of Eco­nomic De­vel­op­ment. “The econ­omy will con­tinue to grow, but it will im­pede the rate at which the econ­omy can grow.”

High home prices

The in­dus­try would typ­i­cally rely on mi­grants to take jobs that the na­tives don’t want. But though Colorado has no prob­lem get­ting peo­ple to move here, the right ones can’t af­ford to.

Be­cause home prices are high — the me­dian sales price for a sin­gle-fam­ily home in metro Den­ver reached a record $407,000 in May, and statewide it topped $365,000 — home­own­ers can no longer af­ford to up­grade to new homes. They re­main “stuck” in smaller homes than they could typ­i­cally af­ford in an­other mar­ket, oc­cu­py­ing houses that would oth­er­wise be avail­able as af­ford­able hous­ing.

In turn, this fur­ther deep­ens the la­bor shortage be­cause first-time home buy­ers, such as con­struc­tion work­ers, can’t af­ford to move to Colorado to take the jobs the in­dus­try so des­per­ately needs them to fill. And the cus­tomers “stuck” in smaller homes turn to ren­o­va­tions and up­grades, an­other strain on the con­struc­tion work­force.

The shortage forces com­pa­nies to fight for crews, ac­cord­ing to Smith. He said he has seen en­tire crews leave a project for a raise of 50 cents per hour.

In 2007, be­fore the re­ces­sion, the me­dian hourly wage for con­struc­tion and re­lated work­ers in Colorado was $13, and con­struc­tion man­agers made $77,720 per year. Nine years later, in May 2016, me­dian hourly wages were $16.17, and con­struc­tion man­agers made an av­er­age of $92,370 per year.

“Con­struc­tion jobs pay very well now,” said Jeff Whi­ton, CEO and ex­ec­u­tive vice pres­i­dent of the Home Builders As­so­ci­a­tion of Metro Den­ver. “The la­bor shortage has never been this bad.”

Wages have re­sponded, but work­ers have been slow to no­tice.

“Many times (stu­dents) are nearly dou­bling their hourly wages and get­ting ben­e­fits for the first time,” said Michael Gif­ford, pres­i­dent and CEO of the As­so­ci­ated of Gen­eral Con­trac­tors of Colorado.

But the per­cep­tion that con­struc­tion is a “dirty job” re­mains in the way, ac­cord­ing to Davia, with the plumb­ing con­trac­tors’ as­so­ci­a­tion.

“There still ex­ists some kind of stigma at­tached to con­struc­tion,” Davia said. “So, I think we’ve got an im­age correction that we need to em­bark on. … These are careers with ben­e­fits and a lot of room for ad­vance­ment.”

The ef­fort to make that correction in­volves the state, com­pa­nies, city of­fi­cials, trade as­so­ci­a­tions and com­mu­nity col­leges fran­ti­cally try­ing to reach work­ing-age mil­len­ni­als through so­cial me­dia, career fairs and di­ver­sity out­reach.

“The hard­est chal­lenge is re­cruit­ing stu­dents,” said Scott Thor­son, COO of Oak­wood Homes, a Colorado-based home build­ing com­pany. “I don’t think peo­ple re­al­ize the earn­ing po­ten­tial. It’s a mes­sage that’s been lost.”

That mes­sage is part of An­der­son’s job. His state of­fice works with work­force cen­ters to de­velop bet­ter trained work­ers and a bet­ter im­age. Con­struc­tion hopes to re­place ag­ing-out baby boomers and the hordes of peo­ple laid off dur­ing the re­ces­sion with younger gen­er­a­tions.

In 2008, con­struc­tion took a hard hit. And in April 2010, the in­dus­try reached an 18.8 per­cent un­em­ploy­ment rate in Colorado. While builders were pre­oc­cu­pied with re­cov­ery, a loom­ing boomer re­tire­ment was over­looked.

Now, Thor­son es­ti­mates the av­er­age age on any one of his con­struc­tion crews is 45, and he said his com­pany’s in­abil­ity to find hire­able work­ers is af­fect­ing how quickly they can build.

Al­ter­na­tive to col­lege

The huge loss of la­bor, cou­pled with the in­creas­ing cul­tural em­pha­sis on higher ed­u­ca­tion and loss of shop classes in high school, is what many in con­struc­tion at­tribute as the cause for a shrink­ing num­ber of young work­ers.

“We be­lieve that not ev­ery stu­dent is bound for col­lege,” Davia said. “I started and stopped col­lege more times than I care to ad­mit, be­cause I didn’t know this op­por­tu­nity was out there. It’s a highly tech­ni­cal career.”

Pat Hamill, chief ex­ec­u­tive of Oak­wood Homes, said he be­lieves stu­dents do not choose con­struc­tion be­cause they were not ex­posed to the ben­e­fits. He says the no­tion that “ev­ery­one goes to col­lege” is hurt­ing stu­dents. They have op­tions, he said. Go to col­lege and grad­u­ate with $100,000 in debt, or go into in­dus­try and end up with a $100,000 salary.

To draw high school grad­u­ates to the trades, big com­pa­nies, non­prof­its and lob­by­ing or­ga­ni­za­tions are pump­ing money into train­ing cen­ters, out­reach and state sup­ported pro­grams.

The Colorado Home­build­ing Academy trains work­ers in res­i­den­tial con­struc­tion. The Colorado As­so­ci­a­tion of Me­chan­i­cal and Plumb­ing Con­trac­tors, one of the old­est trade as­so­ci­a­tions in the state, is ramp­ing up re­cruit­ment ef­forts.

Sim­i­larly, Michael Gif­ford, pres­i­dent and chief ex­ec­u­tive of the As­so­ci­ated of Gen­eral Con­trac­tors of Colorado, said his or­ga­ni­za­tion started build­col­ in 2014, a re­cruit­ment site that helps peo­ple find ap­pren­tice­ship pro­grams. AGC also re­ceived a $1.1 mil­lion grant from the state in 2016 to ramp up re­cruit­ment ef­forts across Colorado, and was one of the lead­ing au­thors of the “Work Act.”

The act, which started as House Bill 15-1276, cre­ated a three-year in­vest­ment pro­gram for train­ing pro­grams such as the home­build­ing academy. Colorado has also at­tempted to im­ple­ment more ap­pren­tice­ship pro­grams and to help with re­cruit­ment by con­nect­ing job seek­ers and em­ploy­ers, An­der­son said.

In the academy’s free “boot camp” course, stu­dents learn ba­sic safety, mea­sure­ment, math and how to read blue­prints. The pro­gram also of­fers cour­ses to be­come a su­per­in­ten­dent for those look­ing to move their careers for­ward but do not have the right cer­tifi­cates or skill sets.

“We want all jobs to be earned,” Smith said. “What we do is teach them the skills that em­ploy­ers are look­ing for and we put you across the ta­ble with them. There’s no rea­son you should not be em­ployed within a week (after com­plet­ing a course).”

Smith said the academy “casts a wide net” when it comes to re­cruit­ment and out­reach. Sim­i­larly, Davia said his or­ga­ni­za­tion’s work­force de­vel­op­ment strat­egy is “all of the above.”

Though CEOs and state of­fi­cials alike said they are en­cour­aged that ed­u­ca­tion, train­ing and ap­pren­tice­ship pro­grams are the most vi­able route to solv­ing the is­sue, many ad­mit­ted it will take time.

“This is a longer-term bat­tle,” Davia said, “and there’s no short­term so­lu­tion.”

John Leyba, The Den­ver Post

Stu­dents at the Colorado Home­build­ing Academy lis­ten June 14 to in­struc­tor Mark Bab­cock dur­ing an eight-week course on con­struc­tion. The con­struc­tion skills “boot camp” meets two nights a week for three hours to hone the tal­ent the in­dus­try needs.

John Leyba, The Den­ver Post

Stu­dents at the Colorado Home­build­ing Academy lis­ten June 14 to in­struc­tor Robert McEl­reavey dur­ing a con­struc­tion skills “boot camp.” Part­ners in the con­struc­tion in­dus­try are work­ing to­gether to solve what they con­sider to be an in­dus­try cri­sis — a shortage of skilled la­bor. Con­struc­tion lead­ers don’t have enough skilled work­ers, or peo­ple in gen­eral go­ing into the in­dus­try, so free train­ing fa­cil­i­ties are open­ing to hope­fully kick-start careers for peo­ple look­ing for needed work that pays well.

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