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Meeting ongoing multifamily renovation and housing demands is challenging to navigate amidst the current labor shortage. According to the National Association of Home Builders (NAHB), the multifamily residential space is short on skilled labor for builds and capital projects by at least 400,000 workers. The widening talent gap is only expected to increase when the housing market fully rebounds.
Meanwhile, the demand for multifamily remodeling is holding steady at pace with previous years with signs of growth in the future. The ongoing talent shortage is a stark contrast to the unabated flow of building materials for multifamily and single family residential buildings that were initially plagued by shortages and delays in a new post-pandemic era.
Over 2/3 of construction firms’ job applicants are lacking in required skills. In the United States alone, an estimated seven million more homes are needed to house everyone—an impossible milestone in a nation that’s almost half a million skilled workers short. So, what’s fueling the growing talent gap?
The Associated General Contractors of America (AGC), an industry group calling for more workforce development, shares that there’s been a strong generational shift to four-year colleges and away from trade schools backed by public educators and policymakers. ACG reports that 89% of its member firms have a hard time finding construction workers and 61% of their members have had to delay schedules due to worker shortages.
According to the National Center for Construction Education and Research, (NCCER), more skilled workers have been leaving the trade since 2020 than entering it. These problematic hiring trends have been growing apparent as more multifamily capital projects are postponed or put on hold. In recent years, multifamily residential leaders have seen these obstacles creep into capital projects.
Multifamily residential leaders have seen these obstacles creep into turns and capital projects:
1. MFR renovation project delays: Residential multifamily building turns and capital project timelines are regularly delayed. These delays postpone critical tasks that make MFR buildings inhabitable like plumbing, electrical, and carpentry.
2. Soaring project costs: Any major labor shortage tends to spark higher labor costs in a limited market. These limitations leave contractors and developers with higher expenses that can affect multifamily companies and their bottom line.
3. Rising bidding challenges: The growing shortage and demand for labor only drive more competition among construction projects with a limited pool of skilled workers available. These dynamics make it tougher to negotiate rates and harness your buying power.
4. Increasing quality concerns: Devastating quality compromises can impact MFR capital projects when your workforce is rushed or stretched thin. These gaps can create more issues or even liability in the future if installations and capital projects aren’t executed correctly and in compliance.
5. Shrinking housing availability: Delays on MFR renovations and rebuilds exacerbate the already existing shortage of available housing—impacting both renters and property managers.
Governments, educational institutions, industry stakeholders, and associations can collaborate to invest in and promote vocational training programs to attract fresh new talent across skilled trades. Promoting greater diversity and inclusion in the MFR construction industry can also help expand the talent available and the future workforce.
Technology, technology, technology. Implementing the right cloud technologies (along with your legacy IT investments) can help you streamline your processes to reduce the amount of manual labor required.
Partnering with providers who simplify sourcing talent across trades and state lines can remove barriers and keep your MFR capital projects on schedule.
The shortage of skilled construction workers is putting more market limitations on MFR renovations, but there are opportunities to find smarter approaches to balance the labor required and source the best workers available. Investing in the right cloud technology can help you streamline your MFR capital project requirements. Then, when you have an effective plan, you can find ways to source the best talent available to support your capital projects at every stage and meet your community needs sooner.
We lessen the complexities of multifamily residential capital projects. With 24/7 access to our pre-qualified, national network of 30,000 vendors across 55 trades, you can start MFR capital projects sooner, backed by technology-powered services. Keep your capital projects moving on time and budget by managing work orders, optimizing processes, and monitoring costs all in one place on our One by Lessen platform.
Learn how to scale your renovations faster without compromising on quality.