The construction industry in Las Vegas has seen more than its fair share of ups and downs over the last 20 years. Rampant expansion at the start of the century gave way to a massive real estate downturn that began in 2008. Only the most disciplined and organized companies, such as Tradewinds Construction, were able to weather the economic malaise. The administration of Donald Trump has ushered in a resurgence in the national economy, and this uptick is being seen in a greater sense of optimism, a healthy labor market, and renewed interest in starting or expanding businesses. However, all this economic good news is having a paradoxical effect upon the construction industry in Las Vegas as there is now a labor shortage.
From mid-2015 through 2016, quarterly growth of the country’s GDP averaged less than 2%. This was considered the “new normal” that everyone would have to live with. The fourth quarter of 2015 had abysmal GDP growth of only 0.4%. The unemployment rate for 2014 through 2016 was through the roof when you counted in all those who had given up hope of finding a job. The U6 unemployment numbers for this time period were 12.7% (2014), 11.3% (2015), and 9.9% (2016).
Such a dismal job market worked to the benefit of management. Companies had a massive labor pool to choose from, and firms could easily retain highly skilled craftsmen at less-than-stellar compensation as there were so few job opportunities available. In essence, a worker chose to have a job over seeking the highest level of compensation possible. There was a lot of supply (the workers) and little demand (few jobs), so wages and benefits could be kept low.
However, the same law of supply and demand has now led to a labor shortage in the Las Vegas area. The economic policies of the Trump administration have led to a huge amount of jobs being created, an expansion of the energy industry, a growing resurgence of manufacturing, and a near-historic low in unemployment. The second quarter of 2018 featured GDP growth of 4.2%, and the latest weekly jobless claims fell to a 49-year low. The result is that skilled tradesmen now have a plethora of choices of where they wish to work.
Tradewinds Construction understands the economic underpinnings of this labor shortage and has some solutions. First, the best workers are highly trained, so it behooves contractors to put a greater emphasis on training their craftsmen, whether it’s on-the-job or through specialized classes. This training is invaluable for workers as it gives them experience and better skills, which leads to being able to earn more money. A company that is willing to expend a great deal of effort in making their employees as skilled as they wish to be will have a greater ability to retain them as they’ve shown that they’re willing to invest in their workers. Loyalty can be earned through dedicated efforts.
Of course, another way to combat the Las Vegas labor shortage is to offer top pay. Employees can pick and choose where they’ll work due to the current economic climate, and the demand for construction is running high as factories are being reopened, new businesses are started, and companies that weathered the tough times are now looking to expand. Offering top pay and benefits is vital in retaining employees and ensuring their productivity. If a contractor is not willing to pay top dollar for a skilled tradesman, there are plenty of others that are quite happy to do so.
Jeff Vilkin, the founder and President of Tradewinds Construction, says, “It used to be quite easy for a construction firm to ensure that their employees stayed with them. The job market was terrible, so there was no alternative for most workers. A lot of short-sighted companies took advantage of this and offered less pay and benefits. While such an approach may have worked while times were tough and put extra dollars into the firm’s bank account, it made sure that workers felt no loyalty to their company and eager to leave for greener pastures if given the opportunity. Now the economy is booming, and many contractors are having problems filling positions due to the ongoing labor shortage as workers are leaving the area for more lucrative jobs elsewhere. The answer to this problem is quite simple – reward your employees with what they deserve. Even in the leanest of times, Tradewinds Construction made sure to pay our skilled craftsmen what they were worth as well as maintaining a strong commitment on continual training. This has paid dividends as our workers have stayed with us even though they can have their pick of jobs anywhere else in the country. The current low unemployment rate, coupled with increasing economic activity, means that companies have to fight hard to retain workers. The best way to do that is by respecting them by helping them advance their skills and pay them what they deserve.”