How To Prepare For A New Generation Of Construction Workers

Matthias Bohner

There is a changing of the guard in construction. Construction workers, like the rest of the U.S. population, are aging. In 2008, the average construction worker was 40.4 years old, compared with 36 in 1985. More than 40% of construction workers are baby boomers nearing retirement. That figure increases to 54% for construction managers. The construction industry is at a crossroads. The generation with decades of real-life experience is retiring, and a new generation of inexperienced, but digitally native workers is entering the construction industry. This shift in workforce skill sets and experience presents unique challenges and opportunities.

This shift in experience and skill sets is playing out against the backdrop of profound digital disruption in the construction industry. As a new generation enters the workforce and more experienced craftsmen retire, there is an urgent need to compensate for this experience gap. Capturing and utilizing best practices can no longer be just a goal: it must be reality. Otherwise accidents, rework, and delays will become more commonplace. On the flip side, technology-savvy millennials have little patience for manual, paper-based processes. Construction companies face a major trade-off between employees with deep industry experience (baby boomers) and employees with native technology expertise (millennials).

The die is cast: with baby boomers retiring, construction companies must act now to both capture this knowledge before it is lost and appeal to a younger generation of workers with a digitized workplace.

Working harder, accomplishing less: How workforce changes impact construction

Complexity is the enemy of workforce engagement. People are working harder than ever but are not necessarily accomplishing more. Organizational complexity is driving costs up and slowing down progress. At the same time, a shifting workforce is disrupting production.

Contingent workers – provisional workers, independent contractors, or consultants that work on a temporary basis – have become commonplace. Eighty-three percent of executives indicate they’re increasingly using contingent workers. Only 34% of executives feel that they’ve made progress in building a workforce that can meet future business goals. Worse, only 30% of executives say their companies give special attention to the particular wants and needs of millennials. That’s bad news for companies that are increasingly dependent on savvy millennial talent recruitment.

Three issues must be addressed:

  1. Changing of the guard. Over 50% of the workforce will be from the millennial generation by 2020. In the next five to 10 years, as more skilled workers reach retirement age, the millennial generation will dominate the workforce and demand new technological tools versus manual, paper-based processes.
  1. Contingent labor is on the rise. To drive agility and lower fixed costs, companies are turning more and more to contractors and service providers. Competing with other industries for the most talented engineers will require new tools and technology. In addition, contractors need to track the compliance and safety records of these workers.
  1. Complexity is on the rise. Companies do business in more countries across many more channels. Products and services are becoming more complex. Regulations are changing by the day, and understanding the requirements in new markets is critical.

Next steps towards a new generation of construction workers

Construction companies must improve total workforce productivity. This includes digitizing best practices and on-the-job expertise from by boomers prior to their retirement. This also includes the use of analytics for smarter recruiting and onboarding, managing performance goals, and fostering career development for millennials.

The key is powering digital transformation through strategy alignment, opportunity assessment, solution roadmaps, value realization, and governance. For example, construction companies are using total workforce management suite tools to optimize and engage their workforce while providing advanced analytics. Other technology supports workforce recruitment and onboarding by simplifying work and ensuring regulatory compliance. Still other innovations manage a flexible workforce lifecycle from recruiting to onboarding, performance, compensation, and learning – all in one place. But most of all, smarter apps with better user experience enable the workforce to easily access the right information across any device and through a dramatically simplified user experience.

Globalization, shifts in workforce composition, and changing demographics are affecting the way companies approach project execution and facility management. As construction companies respond to the new demands of a digital marketplace, addressing gaps in workforce knowledge and expertise are essential for long-term success.

Read “Building a Sustainable World, How to survive and thrive in a digital construction economy” to learn more about digital transformation in construction.

Matthias Bohner

About Matthias Bohner

Matthias Bohner is a Global Industry Solutions Director for the Engineering, Construction, & Operations Industry Business Unit at SAP representing EMEA. Mathias provides a high level of expertise and knowledge of ERP-systems along with an extensive industry network. He has over 20 years of extensive project management experience across a large number of clients. Matthias acts as an industry advocate, keen to deliver value to clients through SAP solutions