UPDATED, August 26, 1:50 p.m.: Chicago’s recent development boom has kept builders busy — almost too busy.
The full-blast pace of construction across the city has dried up many of the traditional wells that building firms tap for talent, said Josh Stark, vice president of construction at Focus. The company was one of the city’s top five general contracting firms by total square footage of business over the last year, according to The Real Deal’s new ranking of the most active firms in Chicago.
“Typically, if a contractor is running low on workers, he’s going to go to the union hall to get more guys, especially if you need someone in a specific trade.” Stark said. “Now, the union halls are empty. Everyone is at work.”
The problem dates back more than a decade to the Great Recession, said Dan McLaughlin, who was until recently, executive director of local trade group Chicagoland Associated General Contractors.
Construction soon dried up and laborers and managers left the field. At the same time, apprentice programs didn’t offer new classes because there would be no work for graduates. That has led to an aging workforce with few young replacements. The average age of Illinois’ construction workforce is just under 50, according to multiple industry sources.
“We’re still trying to deal with that,” McLaughlin said.
The labor shortage has taken a toll on some project timelines, or forced companies to pay workers overtime so they can meet their packed schedules. The problem has affected general contractors, but not to the extent that it has hurt subcontractors, players in the business told TRD.
Fierce competition
Some subcontractors are so overwhelmed that they can only book jobs more than six months in advance, or face a choice between turning down contracts or working their employees on weekends, said Geoff Arend, who heads J.T. Magen’s Chicago operation.
“Subs are getting hesitant to bid for too much work, because, what if they get it?” Arend said. “They’re trying to figure out how to staff them with the workers they’ve got.”
The fierce competition for workers has pushed builders through less traditional channels for hiring, including a renewed push in recent years to scout unemployed residents of low-income neighborhoods on the city’s South and West Sides.
Leaders of Focus, Clayco, Magellan Development Group, Gilbane Building Company and Summit Design + Build all described intensive efforts to hire and train workers from high-unemployment areas.
Those efforts are made through unified programs like Build Illinois, an industry-wide effort to get students and young people in the trades, as well as individual campaigns like Clayco’s Construction Career Development Initiative.
Last week, Related Midwest announced it was leading a venture with Magellan Development, Sterling Bay, Clayco and others to create a loan fund to help minority and women-owned firms expand their contracting abilities.
And Maryland-based Clark Construction — the No. 2 firm in TRD’s ranking — has a small business development program in Chicago, with 94 local companies graduating from the program. Clark has awarded them $40 million in projects over five years.
“Everybody has a program to get people into the trades,” McLaughlin said.
Correction: This article was updated to reflect that Clark Construction has already provided $40 million in projects through its small business development program.