The residential construction industry is expected to experience significant growth in the coming years, which is excellent news for those looking for stable, long-term employment in the construction industry. However, this will challenge employers as they look to fill vacancies to keep up with demand.
Let’s take a closer look at the residential construction labour market, what to expect in 2023, and the industry challenges employers will face, such as unprecedented levels of retirement and an impending labour shortage.
Industry Growth
Before we dive into the challenges, let’s first look at the industry and its forecasted growth. Canada appears to have bounced back from the pandemic lockdowns in 2020, as the industry is again on pace for modest growth in 2023.
Demand for new single-family and multi-unit homes across Canada resulted in stronger housing starts in 2021 and 2022, a trend that should hold for 2023. One indicator of future construction volume is the value of building permits, which has steadily increased in 2022.
Regarding a longer-term outlook, though experts forecast a slight decline in the demand for new builds by 2027, they have also predicted that it will be offset by a rise in demand for renovation and maintenance of older homes.
The Upcoming Boom in Retirement
In 2023, the baby boomer generation will be between 59 and 77 years old. With most workers retiring between the ages of 60-65, it’s no surprise that one of the biggest challenges that will impact the residential construction labour market is widespread retirement, which will to reach unparalleled heights.
According to a report by Buildforce Canada, roughly 78,000 workers will retire from the residential construction sector between 2022 and 2027. New entrants to the industry will partially offset this; however, the number of retiring workers coupled with industry growth will result in a labour gap, particularly for skilled and technical trades.
The Widening Labour Gap
The difference between the number of job openings and the number of available workers to fill those positions is known as a labour gap. With the looming retirement of the baby boomer generation and rising demand for residential construction over the coming years, the industry will inevitably face a labour gap that will force employers to manage their resources more effectively.
Employers are already feeling the effects of the labour gap, as evidenced in Statistics Canada’s recent Labour Force Survey, which reported that in Q2 2022, construction employers were looking to fill nearly 83,000 jobs, one of the highest to date. Furthermore, employers only reported hiring 44 new employees for every 100 vacancies in Q2, substantially lower than historical data from previous years.
5 Tips to Combat the Labour Gap
Employers can start preparing for the labour gap by implementing strategies to mitigate the risks associated with a labour shortage. Here are five tips to get you started:
- Recruit and attract talent from underrepresented groups, such as women, BIPOC workers, and new Canadians. Not only will this help meet labour force needs, but it will also contribute to a more diverse and inclusive workforce.
- Focus on retention and succession planning to keep experienced workers in the industry and ensure that knowledge is transferred to the next generation.
- Offer competitive compensation and benefits packages to attract and retain top talent.
- Implement training and development initiatives to upskill workers, promote professional growth, and better prepare them for the future.
- Partner with an experienced and reputable recruitment firm that specializes in the construction industry to ensure you are finding the right talent for your company.
Though the labour gap will present some difficulties, preparation will help employers navigate this change and develop a skilled and capable workforce for years to come. Reach out to us anytime for assistance with your recruitment strategies in the construction industry.
