AGC Survey Focus: 2023 Construction Hiring Expectations

are High with Obstacles to Match

The Associated General Contractors of America (AGC) recently released their 2023 Construction Hiring and Business Outlook Survey. When focusing specifically on hiring expectations within the survey, we see that while contractors are optimistic about the construction outlook for this year they expect to continue to struggle to find enough workers to keep pace with demand. Washington’s failure to pass immigration reform, combined with a significant funding gap between collegiate education and career and technical education tracks, means there are very few new workers entering the construction labor pool domestically or from other countries. At the same time, demographics continue to work against the industry, as the size of the U.S. workforce continues to shrink relative to the overall population.

Contractors are taking steps to address these challenges. Firms are boosting pay and benefits to entice more workers and retain current staff. They are also investing in technology and techniques to make their operations more efficient and less vulnerable to supply chain challenges and labor shortages. In other words, they are finding a way to continue building despite the many challenges they face in 2023.

Most firms anticipate adding workers in 2023 to accommodate the higher demand for projects. More than 69% of the respondents expect to add to their headcount, compared to only 11% who expect a decrease. However, respondents expect difficulty adding workers. An overwhelming 80% report they are having a hard time filling some or all salaried or hourly craft positions, compared to only 8% who say they are having no difficulty. (The rest have no openings.) In addition, the majority (58%) of respondents says either hiring will continue to be hard (41%) or will become harder (17 %).

A large majority of firms took steps in 2022 to attract and retain workers. Nearly three-quarters (72%) increased base pay rates more than in 2021, compared to 62% that boosted pay more in 2021 than in 2020. Additionally, one-third (33%) of firms provided incentives or bonuses. And more than one-fourth (26%) of the firms increased their portion of benefit contributions and/or improved employee benefits. Only 7% of firms provided no increases in pay, incentives, or benefits in 2022, down from 12% that made no changes the year before.

This year’s outlook makes clear that contractors are not waiting for government officials to act when it comes to overcoming the hiring challenges they face in 2023. Firms are raising pay, boosting benefits, and increasing their training budgets to be better able to attract and retain new, and more diverse, talent.  And, they are investing in new technology and new techniques to be more efficient so they can build more with fewer people.