Disruptive forces are converging in the AEC industry and this current situation is quickly becoming a high risk business model. A number of issues are contributing to the disruption, but these three—staffing shortages, under-performing productivity and the rising cost of human resources—are key.

The battle for talent is raging on. According to the 2017 FMI Construction Industry Survey, 89% of companies in the construction vertical are experiencing staffing shortages. The study states, “Recruiting talent has long been a challenge for the construction industry, and it will only become more severe in the future—across a broad range of industry sectors.”

Low Productivity Improvements

In addition to staffing shortages, construction productivity gains are almost non-existent. A McKinsey Research article, “Reinventing Construction: A Route to Higher Productivity,” says “Productivity improvements in construction are long overdue. Even while other sectors from retail to manufacturing have transformed their efficiency, boosted their productivity, and embraced the digital age, construction appears to be stuck in a time warp. In the United States since 1945, productivity in manufacturing, retail, and agriculture has grown by as much as 1,500 percent; productivity in construction has barely increased at all.”

Millennials Want Competitive Pay

As in any supply and demand situation, staffing shortages will drive up your costs to attract and retain talent. The picture looks even more discouraging according to “Millennials in Construction: Learning to Engage a New Workforce,” a 2015 FMI Construction Industry Survey. It says, “For years, thought leaders have been talking about how millennials are just out for a purpose crusade and how they are more interested in meaning than they are in money…When asked what’s most important to them, millennials rank competitive pay the highest.”

Disruptive Forces Drive a Vicious Cycle

With competition for talent heating up, spending on human resources, recruiting, and training will increase. In order to attract and retain the talent you need, you will need to offer more competitive compensation packages. With these costs rising, you must find a way to improve operating margins. In order to improve operating margins, you must improve productivity. You can no longer simply pass cost increases on to clients in todays’ competitive marketplace.

Change Your Status Quo

Disruptive forces are driving a vicious cycle of staffing shortages, rising human resource costs, and rising compensation costs—all resulting in stagnant productivity and lower profits. Our infographic shows how you can reverse that negative cycle by streamlining your operational processes for greater productivity and profitability. Click the button below.


To learn more about how Agile Frameworks can help you leverage technology disruption and turn staffing shortages, low productivity and low profitability challenges into opportunities, please look at our guide, “Staffing Shortages, Low Productivity, and Low Profitability—Part Two.” To download the guide, click the button below.

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