If you listen to any forecaster in the housing industry, the good times are here again!
Housing prices are up for the past 13 quarters in a row, while inventory remains at historic lows. Interest rates are still practically zero and average new home pricing continues to climb. A recent CNBC report shares that housing prices will not fully recover from the recession until 2025, and they forecast pricing and demand will continue to increase at least through that period of time. It’s hard to believe that it was almost 40 years ago in those stubborn 1980s when mortgage rates were over 15% and we still averaged over 1.5 million starts!
All of this is great news! Tons of current demand, all while those mysterious Millennials and their massive population come of age in peak “family creation” years and just build more demand, while Baby Boomers all stay put instead of selling their single-family homes. So, why are we still struggling to surpass 1.2 million starts if things are so good?
The simple answer is labor shortage. From Reuters to the New York Times to Fortune, everyone seems to be talking about our industry’s deficit of skilled labor. From forestry to framing with transportation in the middle, for perhaps the first time in our industry’s history, we are unable to over-supply this great market!
The “perfect storm” of capacity leaving the industry during the recession, combined with 10,000 Baby Boomers entering retirement every day is leaving us without the capable labor that leaves us confident enough to expand.
The Bureau of Labor Statistics is predicting the construction industry will face a shortage of 1.6 million workers by 2022, and this statistic does not factor in the material, manufacturing and supply side of the business. Industry observers point to several factors, including:
• High schools have shifted their focus from teaching job skills to preparing students for college.
The NY Times recently reported that a “new golden age for the American worker may be right around the corner” as literally, every industry in America cites some degree of labor shortage. As a result, wages are increasing and the new tradition of attending university to obtain a degree and six figures of debt is being challenged.
Here are the facts:
• We apparently need to figure out a new strategy to attract and retain new recruits into our industry.
Now before we all get on the “those crazy Millennials” bandwagon, let’s take a deep breath. While we make company policy changes, and move headquarters into new locations and redecorate, let’s be honest that we don’t truly know what Millennials “want.” In fact, they probably don’t either. What is true is that they need jobs and in the new world of “Indeed recruiting” perhaps we just don’t measure up. I heard one industry veteran say, “We put in our Indeed job posting ‘must apply in person’ and I still get a ton of email applicants. If they can’t follow instructions, then they aren’t qualified to work here.” Perhaps he is correct, but I also know the problem isn’t going to be solved by waiting for applicants to conform to your desired process.
NAWLA has heard this concern from its membership and the industry loud and clear and is determined to help find solutions—so much so that the NAWLA Marketing Committee is dedicating all of 2018 toward sharing resources, experts and success stories of those in our industry who have figured out a formula for success! Each month, we will scour the industry and provide you with examples of how to overcome this challenge and equip your organization for continued success.
One of the many strengths of NAWLA is our collective membership, our expertise, and our ability to weather any storm through networking and a shared investment in success.
I must end with a shameless plug: If you’re not currently connected with the NAWLA community, you are missing the boat. The fact is, it’s the oldest, most extensive trade association serving the entire North American lumber supply chain. But on a practical level, it connects buyers and sellers, expands personal networks, educates your teams, and expands your market. For years, I’ve had a front-row seat to see this trusted community of wholesalers, manufacturers and service providers make huge deals over handshakes. I’ve witnessed up-and-comers find their career home in this industry because of connections made through NAWLA.