Quality, Consequences and the Construction Industrial Complex (part 453). Our guest this episode is Niss Feiner,…
The War for Talent
Quality, Consequences and the Construction Industrial Complex (part 343).
The war for talent is on!
The property industry is now entering the perfect storm of:
- Qualified, experienced and skilled people retiring and quitting on mass.
- The echo of COVID i.e. the move from no work to high demand.
- A lack of qualified, experienced and skilled people coming through.
The diagram below is my current understanding of the skilled people supply / demand dynamics.
My anecdotal evidence for this is 3 fold:
- At a recent industry conference I looked out over the audience and noticed ~70% pf people were in their late 50’s. Nature and retirement will take its course and remove people.
- I met an industrial property developer last month who told me his MEP design team resigned from his job half way through because they had “no people to do the work and could not get any”.
- Hiring is a nightmare, good, qualified people are hard to find. It is an employee’s market for the foreseeable future.
When talent is scarce, there are winners and losers. Skilled people win, they become price and terms setters and employers struggle and become price takers.
So what might be the consequences for the next say, 10 years? At the moment, I believe:
- Prices for employees, design and construction will rise ahead of inflation.
- Competent people, a legal term in the UK, will be the new industry “rock stars”.
- Property design will simplify due to skill shortages
- Construction firms will compete for and lock down, in framework agreements, the firms with the right people. The game will be preventing other construction firms from accessing the firms and people they use.
- Maybe at long last the construction industry will innovate with more modular construction and optimized construction processes. Dreams are free!
I saw on video, a racing car tire change completed in 1.63 seconds! Anything really is possible. That tire change required qualified, skilled people working on an engineering, optimized process. It was outcome focused, this is what the property industry needs right now.
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“Qualified, experienced and skilled people retiring and quitting on mass” – that’s been a talking point for at least 20 years now. I don’t see any more retirements, than before. If anything, people who should have retired don’t let go.
“At a recent industry conference I looked out over the audience and noticed ~70% pf people were in their late 50’s.” – Isn’t this typically the case? Young people don’t have the money and luxury to take the time off and attend events. They are busy working on projects.
“Property design will simplify due to skill shortages.” – yes, and screw the unreasonably complicated codes. The “performance codes” will make the situation even worse. Fewer formal limits, and no qualified AHJ to check.
I think the trend will be higher prices, then more outsourcing, then eventually less work for locals. At least as far as MEP design in the US.