By Micah Daniel-Guase
The United States and Canada are working to combat greenhouse gas emissions through legislation, new building projects, and green retrofits. While sustainability is top -of-mind for builders, project managers, and legislators, it’s not the only challenge facing the construction industry. Both countries also face challenges in tackling an equally massive undertaking: a labor shortage that could leave over 1 million skilled labor jobs unfilled.
What does green building and the labor shortage have in common? The labor crunch could particularly affect green building construction and retrofit projects, research shows.
Labor Shortage Impacts Green Construction and Retrofits
In April 2022, the U,S. construction and manufacturing industries reported over 140 million job openings. This is “the highest levels recorded since industry-level jobs data was first collected,” according to McKinsey and Company’s insights on the labor crunch.
In Canada, a June 2022 study showed that accelerating green retrofit activity to meet the current 2030 and 2050 greenhouse gas emission targets could create as many as 2 million job years.
But finding skilled workers, including carpenters, HVAC experts, drywall installers, mechanical engineers, and technicians, could put green retrofits – and sustainability goals – on hold. The study by the Canada Green Building Council (CaGBC) and Delphi Group shows that to hit the greenhouse gas emission targets, Canada will need to rely heavily on these types of skilled workers in renewable energy, construction, and more.
In addition to the new emissions initiatives, there’s been a lot of buzz around green retrofit projects, which is increasing demand. Green retrofits could reduce building-sector emissions by a substantial amount. According to Gregory Balycky, a director of investments at the Canada Infrastructure Bank (CIB), green retrofits are still relatively new to the CIB’s scope and they’re still trying to create awareness in the market. That means the labor shortage challenges could be compounded as green retrofit demand grows.
Inflation and Labor Shortages Could Put Projects on Hold
The Canadian Green Building Council’s (CAGBC) Green Retrofit Economy Study highlights that even though a “historically significant” $3.6 billion has been committed to finance energy efficiency upgrades and low-carbon retrofits, the labor shortage could stall any meaningful progress to meet GHG emission reduction targets.
Decision-makers in the United States face a similar challenge after passing the Inflation Reduction Act of 2022 (IRA), the “single largest investment in climate and energy in American history.” The IRA is investing billions of dollars to help dramatically reduce carbon emissions by 2030.
Unfortunately, reports in the United States and Canada both indicate that a labor shortage was on the way whether the 2030 and 2050 greenhouse gas emissions targets for each country were set or not. Now, the labor crunch threatens to derail goals in the United States, Canada, and beyond.
The labor shortage is not new to the United States. In 2021, Dallas-Fort Worth (DFW), Texas stone and masonry company Dee Brown Inc. (DBI) president and CEO Robert Vertreese Barnes III commented on the labor shortage saying that as the older generation of skilled artisans ages out of the workforce, “there hasn’t been a youth replacement for quite some time.”
Staffing difficulties combined with increased costs of raw materials and transportation, along with increases in the amount of lead time necessary to staff a project will affect construction companies, as well as developers and project managers. Some construction companies in Austin have resorted to turning away projects amid staffing difficulties.
Areas where we can continue to expect to see the greatest impacts from the labor shortage include electricians, contractors, and HVAC trades like plumbers, gas fitters, steamfitters, pipe fitters, and air conditioning mechanics. Some of the more popular projects like green retrofits, building automation, and wall recladding systems will be affected, according to reports.
Preparing for Labor Shortages Before Your Next Green Retrofit Project
Before you start your next project, there are a few things you should consider to address and compensate for the skilled labor shortage. Construction companies need a longer lead time to staff projects, so submit inquiries for work sooner rather than later to put you and your project at an advantage.
Don’t assume that you’ll beat the labor shortage, either. Akua Schatz, the CaGBC’s vice president of advocacy and market engagement advised while moderating a panel at a green business conference in Toronto, “Irrespective of the green movement, we are in a place where labor and supply chains have significant shortages all around us, so how we think creatively about how we address that becomes important.”
Businesses can focus their creativity on the supply chain, where sourcing materials will feel some of the impact, Schatz mentioned in his panel. He suggested finding better ways to source for projects like wall recladding systems. Choosing pre-fab materials that are constructed off-site and then customized to each project can save time and increase efficiency, too. The Everything CRE Network can help you find contractors and suppliers in your region who work with certified green materials and construction processes.
Also, allow for plenty of time for material deliveries and account for shortages or damaged goods by stocking overages. Tracking attrition rates can help you know how much to order so you can prevent construction delays while managing cash flow.
In general, an integrated approach to building and open lines of communication can help keep projects moving, even amidst the labor shortage.
Choosing the right region for your next project can also help. Currently, Ontario and Quebec have the most available building stock ready for retrofit, so focusing on those cities can make the most impact in emissions reduction and your business growth.
Building a New Generation of Skilled Workers
As an industry, we can all benefit from promoting the advantages of working in the trades to younger generations. While white-collar millennials in the U.S. struggle with student loan debt and unreasonable expectations from employers, going into the trades remains a viable – and desirable – career path. This isn’t publicized or promoted enough at the high school level, where more programs should be created and sustained to prepare students for a career in the trades.
Promoting apprenticeships and on-the-job training in these fields can also help create the new generation of skilled workers that is sorely needed across North America. Education should focus on green building, where workers are in even greater demand.
Even with the myriad of supply chain challenges, the United States and Canada are heading for a more sustainable future. If we can take the steps to create new generations of skilled workers and address supply chain issues through technology innovations, we can – as an industry – address the shortfalls expected in the next few years. Green retrofits of the existing built environment will play a big role in achieving benchmarks and sustainability goals in the coming decades.
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