HOUSTON—As everyone is well aware, Texas has been the hardest hit during the oil downturn. This has made a large impact on the state's economy, and along with it, presented some challenges for the construction industry. Ray Sedey, McCarthy's Texas region president, recently provided some insight on trends from a construction perspective, including a review of 2016 and a look ahead for 2017.

GlobeSt.com: What are your thoughts on the state of construction this past year and what we can expect in 2017?

Ray Sedey: In the last year, the crash in oil has made a substantial impact on our economy and has led to several challenges for the construction industry, with Texas being one of the most affected regions. Despite that, there has been a continued development of several cities in Texas with a thriving economy and populations that continue to grow exponentially. More companies and people are coming to the state, which leads to a constant flow of opportunities, and we expect to see more work on schools, hospitals and infrastructure. All signs indicate that we will enjoy a strong construction industry in 2017.

GlobeSt.com: What is the biggest challenge the industry is facing?

Sedey: Put simply, people. Over the last couple of decades, there has been a steady decline in recruitment and training for craft workers. This has left the industry with a shortage in skilled workforce, and construction companies are unable to fill all the roles and meet the demand of current projects. The construction industry absorbed some skilled labor from the oil industry but as oil rebounds, the lack of laborers will be compounded. In order for us to handle the current work load, we're required to make an investment in recruitment and training craft professionals to replace the aging workforce. Additionally, there is a lack of talent on the managerial side. Not as many college students are on the engineering track so there is a challenge to find and retain salaried staff to run the projects. Companies are doing heavy recruiting out of college and it is competitive.

GlobeSt.com: How should the construction industry approach this problem?

Sedey: To be successful in developing and sustaining the skilled workforce, there needs to be a collaboration of efforts from educators, projects owners, industry associations, contractors and specialty contractors.

The construction industry needs to generate interest within our future workforce. Part of the labor shortage has to do with lack of skill training and career paths as schools have eliminated non-college related career paths in the last few decades. However, in some districts in Texas and across the nation, there is a renewed effort to introduce training programs. There is also a challenge at the college level– we need to encourage more students to enter engineering programs.

Project owners also need to support proper training of craft labor employees. Unfortunately, some perceive this to be too costly, but the real cost is a reduced quality and productivity based on lack of proper training.

As thought leaders, industry associations should develop and/or support programs that provide standardized training. Labor shortage is a huge issue in Houston and they are addressing the issue jointly with local government, project owners and construction companies via the Construction Career Collaborative.

At McCarthy, we are addressing the issue in a few ways. First, a full-time craft recruiter and trainer were recently brought on to develop and lead our own training program. In the program, experienced craft professionals teach others their unique skills, while also giving them the opportunity to learn from other craft workers with expertise in a different field. To support this program, we've added a new yard and training center in Houston.

Second, to encourage sustained interest in the industry with college students, McCarthy has a three month internship program that gives them hands-on experience at a job site. In 2016, 34 students went through the program and we plan for the number to increase significantly in 2017.

Further, McCarthy's Houston division president, Jim Stevenson, is on the leadership board of the Construction Career Collaborative in Houston and we encourage our owners to be involved as well. With client support of the mission to properly develop and train skilled labor, as well as provide a good wage, we know that we have each other's and the employee's best interests in mind. We believe this focus on recruiting and training is the right thing to do. It is an investment for people, our company and the industry.

GlobeSt.com: What are your thoughts on the state of construction this past year and what we can expect in 2017?

GlobeSt.com: What is the biggest challenge the industry is facing?

GlobeSt.com: How should the construction industry approach this problem?

Instant Insights /

Simply Put, Skilled Workforce Shortage is Biggest Challenge

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