How Are Montana Construction Firms Tackling Labor Shortages?

December 16, 2024

Montana construction firms are grappling with a significant labor shortage, prompting them to target Generation Z as a potential source of new workers. Across the state, contractors are struggling to fill open roles despite strong demand for construction services. This labor gap has led many companies to adopt innovative recruiting strategies, including launching educational and apprenticeship programs and engaging directly with high school students to encourage them to consider careers in construction.

The Scope of the Labor Shortage

Impact on Construction and Healthcare Sectors

A September report from the Montana Department of Labor and Industry highlighted that the state’s rapidly growing population is facing workforce shortages in several trades, with construction and healthcare among the most affected sectors. Sarah Swanson, the department commissioner, emphasized that both industries would require considerably more employees by 2032. Despite a 7% year-over-year increase in the number of construction workers in Montana as of October, as reported by the Associated General Contractors of America (AGC), there remain numerous unfilled positions, reflecting a broader national trend where 94% of contractors reported difficulties in filling roles according to AGC’s December annual workforce survey.

The strain is particularly acute in regions experiencing substantial population growth, such as the Bozeman area, which has seen a surge in housing developments and commercial projects. Construction companies are increasingly relying on out-of-state workers to meet demand, often covering travel and accommodation expenses. The struggle to keep up with the need for infrastructure to support the growing population is putting pressure on contractors and state planners alike. Meanwhile, the healthcare sector faces parallel challenges, with hospitals and clinics also competing for a shrinking pool of qualified professionals. This dual crunch underscores the critical need for a coordinated strategy to bolster workforce numbers in both industries.

Aging Workforce and Historical Underinvestment

A significant factor driving the labor shortage in the construction industry is an aging workforce. Many experienced workers are retiring, and there has been a historical underinvestment in vocational and technical training due to a prolonged emphasis on four-year college degrees and the “knowledge economy.” This shift has resulted in fewer young people pursuing trade careers, exacerbating the shortage of skilled labor in construction.

The predicament is compounded by the fact that many high schools phased out shop classes and similar programs over the past few decades, reducing the visibility and attractiveness of trades among young people. Additionally, there is a lingering stigma associated with blue-collar work, where societal narratives have predominantly favored white-collar professions. As seasoned journeymen and master craftsmen exit the workforce, the wealth of hands-on knowledge they possess leaves with them, creating a significant skills gap that does not easily replenish itself. Pivoting away from the entrenched academic pathways to vocational training is now seen as an essential move for industries desperate to close these gaps.

Innovative Recruitment Strategies

Engaging with High Schools

To combat this, Montana construction companies are boosting their recruitment initiatives. Efforts include visiting high schools to promote the value of hands-on careers to Gen Z students. Bill Ryan, the education coordinator at Dick Anderson Construction, noted that the tide is slowly turning, with more young people showing interest in trades. Firms are also offering higher wages to attract new workers, recognizing the need to compete not just locally but against other sectors and states. Montana’s relatively lower cost of living, compared to states like California, has already attracted numerous transplants, many of whom receive competitive salary offers and additional perks such as moving expenses.

High school visits have proven instrumental in dispelling myths about construction jobs, emphasizing the opportunities for creativity, advancement, and financial stability within the sector. Interactive sessions, including hands-on activities and virtual reality simulations of construction sites, are being used to make the industry more accessible and engaging to students. Field trips to active construction sites and workshops hosted by experienced tradespeople offer firsthand experiences that textbooks and lectures cannot match. These initiatives aim to forge a stronger connection between theoretical training and real-world application, showcasing the varied and rewarding career paths that construction offers.

Wage Growth and Living Costs

Despite these efforts, the rising cost of living in Montana means that wage growth may not be sufficient to maintain the standard of living for some workers. From 2020 to 2023, wage growth in the construction sector averaged an annual increase of 0.6%, with an average salary of $67,386. However, studies by industry sites like Construction Coverage suggest that the average construction worker in Montana would need to work up to 68 hours a week to afford a median-priced home, highlighting the disparity between wages and living costs.

This economic imbalance is further complicated by fluctuating housing markets that have seen significant appreciation in property values, especially in areas close to growth hubs. Rent prices have also surged, putting additional financial strain on workers already grappling with high living costs. Construction firms have started negotiating group-rate housing options and providing commute allowances to partially offset these challenges. Workforce housing initiatives, where companies partner with local governments and developers to create affordable living solutions specifically for their employees, are also emerging as potential remedies. However, ensuring that wage increases keep pace with inflation and living costs remains a formidable task for the industry.

Apprenticeship Programs

Earn and Learn Model

Apprenticeship programs are a crucial part of these recruiting strategies, allowing young workers to “earn and learn.” Both Dick Anderson and Sletten Construction have developed four-year apprenticeship programs that enable employees to work while also taking classes, often in partnership with colleges. These programs not only provide students with work experience and earnings but also the opportunity to graduate with an associate degree. This dual approach helps to satisfy both the practicalities of career advancement and the educational aspirations that many parents have for their children.

The “earn and learn” model offers a structured pathway into the construction industry, combining paid on-the-job training with classroom instruction. This strategy not only helps to bridge the skills gap but also reduces the barrier to entry for those who may be deterred by the cost of conventional education. By earning a wage while studying, apprentices can avoid student loan debt, making the prospect of a career in construction financially attractive. These programs are often complemented by mentoring from seasoned tradespeople, fostering a transfer of knowledge that is as invaluable as the formal education itself.

Union Training and High School Outreach

Michelle Cohens from Sletten highlighted how the company’s apprenticeship program includes periodic training with the union. By maintaining strong relationships with high schools and educators, contractors are reaching out to young people who might otherwise overlook trades in favor of college. These recruitment efforts seem to be yielding positive results, with more students expressing interest in construction jobs. Young recruits are often drawn by the appeal of hands-on work and the ability to avoid student loans.

Union involvement adds a level of legitimacy and rigor to apprenticeship programs, ensuring that trainees receive the highest standard of education and practical skills. Union affiliations also mean access to benefits and protections that non-union jobs might not offer, further sweetening the deal for prospective apprentices. Collaborative efforts between schools, unions, and construction firms create a feedback loop that continuously improves the quality of training and aligns curricula with industry needs. Classroom presentations, career fairs, and informative workshops are part of ongoing outreach initiatives designed to keep high school students informed about and interested in construction careers.

Adapting to Gen Z Expectations

Work-Life Balance

David Smith of the Montana Contractors’ Association emphasized that construction firms are adapting their cultures to align with the expectations of Gen Z workers. This younger generation often prioritizes work-life balance, desiring more breaks and the flexibility to take time off, contrasting with the longer work weeks of previous generations. Realizing that competitive wages alone won’t attract young talent, contractors are rethinking their approach to worker satisfaction and engagement.

In response, many construction companies are implementing policies that promote a healthier work-life balance, such as flexible scheduling options and generous leave policies. Innovations in digital project management allow for remote work opportunities, which were previously unheard of in the construction industry. Employee wellness programs, including mental health support and fitness memberships, are becoming more commonplace. These initiatives are designed to create a more holistic workplace that meets the multifaceted needs of modern employees, thus making the industry more appealing to tech-savvy Gen Z workers who value personal time and mental well-being.

Creating Modern Work Environments

Montana construction firms are facing a notable labor shortage, causing them to turn their focus toward Generation Z as a potential solution for filling the workforce gap. Contractors across the state are encountering difficulties in hiring enough workers to keep up with the high demand for construction services. In response to this labor shortage, many construction companies are coming up with innovative recruitment strategies. They are launching educational and apprenticeship programs designed to attract young talent. Additionally, they are engaging directly with high school students, encouraging them to consider a career in the construction industry as a viable and rewarding option. These efforts are aimed at building a skilled labor force for the future, ensuring that construction projects can proceed without delays due to staffing issues. By reaching out to the younger generation, Montana’s construction sector hopes to alleviate its staffing challenges and meet the ongoing demand for construction services efficiently.

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