The U.S. residential construction contracting industry includes about 160,000 establishments (single-location companies and units of multilocation companies) with annual revenue of about $425 billion. Companies in this industry construct and renovate residential buildings. The industry includes general contractors, who build on land owned by others; operative builders, who build on land they own or control; and specialty trade contractors, such as plumbers and electricians, who often work as subcontractors for residential construction contractors.68 Housing demand is driven by population and economic growth. Demand for new residential buildings can change rapidly, depending on the economy and interest rates. From 1986 to 1991, annual U.S. home construction dropped 40%; from 1995 to 2005, it increased 75%; and from 2006 to 2011, it fell 65%. As the economy has recovered from the Great Recession in the United States, demand for housing has strengthened and prices have increased. In local markets, changes in demand can be even more severe.69 “Home building is a key driver of the American economy,” said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. “Housing creates new income and jobs, purchases of goods and services, and revenue for local governments.”70 That’s the general industry backdrop as the number of potential homebuyers in the Denver (Colorado) area increases and the supply of homes for sale continues to fall. Fierce competition pushes home prices higher at one of the fastest rates of any local market in the nation.
Denver’s average sales rate would normally be about 15,000 homes per year, and the market is now operating at just over half that rate.71 With all of this demand, why is there such a low supply?
Housing industry veteran Gene Myers says he could be adding 50% more homes if he just had the people to build them. After weathering more than one recession, not to mention the worst housing crash in history, Myers says he has never seen anything like this. “Especially the fact that it seems like we’re at capacity at such a low level of actual absorption [sales],” said Myers, CEO of Thrive Home Builders, a midsized, privately owned builder in Denver. “In previous recessions, when we’ve recovered, we tend to see prices go up and labor starting to get tight after we’ve recovered to at least an average absorption.”
Thousands of construction workers left the industry during the recession, many of them heading to the energy sector. The assumption was they would return when energy lagged and homebuilding recovered.
Employment of construction laborers and helpers was projected by the Bureau of Labor Statistics to grow 13% from 2014 to 2024, faster than the average for all occupations. Laborers and helpers work in all fields of construction, and demand for these workers would mirror the level of overall construction activity.72 They did not. The labor shortage in building actually worsened in 2016—a surprise to most analysts.
Labor is the top concern among the nation’s builders, according to an NAHB survey, and worry over its cost and availability is growing. “We thought we’d see a flow back of workers from the energy sector,” said Rob Dietz, chief economist with the NAHB. “The labor shortage has basically grown and accelerated. It’s the top challenge in the building industry right now.........”

Questions 

1. What are the external forces acting on the recruitment effort for construction workers?
2. What are some viable alternatives that homebuilders can use in lieu of employee recruitment?
3. Social media recruiting is one of the methods recommended by Charles Kimmel of Kimmel and Associates to reach the millennials.
What are the issues involved in using social media, and how can they be overcome?
4. What external recruitment methods are discussed in the case?
5. What are the challenges and constraints in recruiting construction workers?
6. What are the differing methods for evaluating the success of a recruitment program, and what methods are described in the case?