DEI: A Solution to Construction’s Ongoing Labor Shortage

Combating the construction industry’s labor shortage is a complicated challenge requiring multiple solutions. For several years, Dodge Construction Network (Dodge) has tracked labor shortages in the industry, and a recent study found one potential solution for contractors is to engage a wider segment of potential workers via solid diversity, equity and inclusion (DEI) initiatives. The 2022 “Diversity, Equity and Inclusion in the Design and Construction Industry” SmartMarket Report, published in partnership with the General Services Administration, includes findings (self-reported) from U.S. architects and contractors, revealing the degree of industry engagement with DEI at their organizations and on their projects, as well as suggestions for ways firms can improve in the future. 

“We believe these findings suggest that engaging in DEI offers the opportunity to address some of the biggest challenges these companies face today,” said Steve Jones, senior director of industry insights at Dodge. “The list of practices benchmarked in the report then provide a road map to the industry about how they can consider increasing their engagement.” According to Dodge, the report features:

• Data on the use of over a dozen DEI practices and policies by architects and contractors at their organizations.
• Practices that are widely employed to improve project impacts on communities, as well as the challenges to doing so.
• The top organizational and project benefits experienced by those engaging in DEI practices and policies, and the degree to which they are enhanced by deeper commitments to DEI.
• Critical drivers that can encourage more of the industry to embrace DEI at their organizations.
• Articles, case studies and interviews that provide real-world context about why and how DEI is essential to improve individual companies and the industry as a whole, as well as the very projects and communities impacted by them.

Where the Industry Currently Stands

Many of the DEI practices widely used by contractors are captured in the following self-reported statistics: 

• 66% offer skills training to their jobsite workers beyond what is required for their position, opening additional opportunities for advancement.
• 54% offer DEI training to their staff.
• 36% offer toolbox talks that deal specifically with inclusion and equity.
• 25% offer training on unconscious bias.

Around 25% of contracting firms offer leadership training to all employees — an important way to encourage growth of a more diverse leadership in their organizations. However, the SmartMarket Report suggests that the industry must adapt to appeal to a nontraditional workforce as well. While it does seem that most firms are at least attempting to include DEI initiatives in their programs, there are many underutilized opportunities that could help them make their inclusiveness clear to prospective workers, as evidenced by the following statistics: 

• 19% surpass simple nondiscrimination language in their recruitment practices and actively reach out to underrepresented groups.
• 22% have a path for advancement that actively considers how to diversify their leadership, with large companies making up the vast majority of these responses.
• 14% believe that leadership at their organizations is committed to devoting resources to improving inclusion and equity at their companies.

Untapped Potential in the Workforce

This data reveals that while the construction industry has embraced some elements of DEI training to improve its culture and alleviate the worker shortage, there is still enormous untapped potential. In addition to the top benefit of seeing their efforts result in a more diverse and inclusive organization, there are additional clear benefits for companies that invest in greater DEI efforts. Some of those include:

• About 50% of companies with a significant commitment to this area report increased ability to recruit workers, and attract younger workers specifically, to their organizations. 
• Around 50% of highly engaged contractors report project benefits like better collaboration and greater conflict resolution on-site, driving a better jobsite culture. 
• About 50% of companies that are deeply engaged in DEI feel that their practices have led to more innovation in company efforts to solve ongoing business challenges, in addition to seeing their efforts result in a more diverse and inclusive organization.

Overcoming Skepticism and Expanding Opportunity

The contractors surveyed make it clear that finding workers is the top motivator for further investment in DEI; however, there is skepticism surrounding the validity of the return on greater investment. Nearly 33% note a lack of confidence in the benefits from greater investment as their top deterrent for further investment. More practical information about how contractors have seen improvements from DEI is critical for wider adoption. (Unless noted, the companies in the report with deeper engagement include architects as well as contractors. However, the combined percentage is only provided when there was no real statistically significant difference between the architect and the contractor responses.)

Contractors need more skilled workers — or at least workers committed enough to advancement and development — to justify investment in the training required to get them the skills they need. Qualitative responses from the SmartMarket Report reveal a belief that increasing diversity could involve seeking less qualified or engaged workers, at the expense of a more traditional workforce. However, practices that encourage recruitment outside of traditional sources, wider access to leadership training within organizations and broadening the path for advancement do not exclude anyone. 

As the labor shortage continues, changing the industry to better accommodate those who have not felt like they belong there in the past can be one effective way to attract them to the industry and keep them there long term, allowing for different perspectives, which improve businesses.