Allied World’s Kleabir: Construction boom strains workforce, safety.
- Meg Green
- March 2019
Mark Kleabir, senior vice president, Allied World Assurance, said many regions of the United States face labor shortages. One bright spot for safety is that more building components are being constructed offsite. Kleabir spoke with AMBestTV at the 2018 WSIA Annual Marketplace conference, held in Atlanta.
Following is an edited transcript.
How is the labor shortage impacting the construction business today?
Day in and day out it's having a tremendous impact on projects. The shortage of workers is obviously having an impact on the amount of quality of labor force you have on the jobs. It's really geographic in a lot of cases. Certain states are a little further along as far as the workforce itself. In Texas, for instance, the electrical, mechanical and HVAC contractor shortage is huge. A lot of jobs are using temp agencies to fill the jobs on project sites.
Part of the issues with that is, when you have a project, you have to integrate those workers into the program. If it's a wrapup, they need to be trained on the wrapup every morning and be part of the program. I've been on sites where you can't identify which trade is which trade. You may have workers that are part of the wrapup. You may have workers that are not part of the wrapup. They're not wearing their helmets. They're not keeping track of who's who.
It's becoming an issue from just a quality as well as a safety standpoint. It's something to be very concerned with. We haven't done a great job as an industry at really bringing workers up from a younger standpoint to fill a lot of these jobs. There's a need. On the West Coast, framing contractors are experiencing a shortage. Wood-frame construction is a big problem. A lot of the residential stuff that's being built is being built with workers that aren't qualified to do what they're doing. In turn, the long-term effect is construction defect issues, so it becomes a big problem.
How is the insurance industry responding?
The insurance industry is involved. A lot of companies have been involved with organizations like the Associated General Contractors of America, which is involved with training and bringing workers on from high school and going to high schools, going to campuses. Trying to integrate and make construction an industry that's viewed as more of a glamorous-type role versus a get-your-hands-dirty kind of trade. It's having some impact. We're starting to see more organizations and universities that are buying into these programs. There is a lot of recruitment on campuses for blue collar type trades: the electrical, the framing, the HVAC stuff. It is helping a little bit. We have a long way to go. We are seeing a bit of an impact on that where it is starting to fill a little of these jobs.
A lot of contractors have programs where they bring people in from high school and train them as they move up in the trades to eventually become leads on job sites.
How is new technology impacting the construction industry?
It's big impact overall in a lot of different areas. In particular, one area that stands out is the prefabrication and modular construction. Prefab's been around for a while. What we're doing now is a lot of these new facilities that are being built—from hotels to corporate headquarters to apartments—are building units offsite in warehouse facilities. They use fewer workers, create better quality and it's easier to keep track of everything. They assemble the pieces offsite and bring them to the site themselves on transport and fit the pieces into the pie, so to speak. It's having a tremendous impact. Marriott just signed a contract to do hotel construction. That's going to be prefab or modular construction, essentially creating units, the individual hotel rooms, that will fit into a building like pieces of a pie. The Apple headquarters in Cupertino that was recently completed was essentially created offsite, a lot of that. The building itself was prefabbed into little concrete pie pieces and then brought on site and fit into the main headquarters and assembled. A lot of new facilities that are being built are using that type of construction. It's helping both from a loss control, from a safety standpoint, and then from a workers' standpoint. It's had a great impact.
We talk about new technologies and how wearable technologies can help with knowing who's who on a job site. Wearable technologies are allowing you to identify who's who on a job site at any given time. You'll be able to know where your trade contractor is running around, who's who, where they are. If they're lifting materials that they shouldn't be lifting, certain degrees of back strains and issues like that. Wearable technology is having a huge impact on that.
We talked about technology a while back, sustainable materials and new creation of new technology to build buildings and LEED certification. There was a big rush a while ago, still is a rush for that matter, to be in a building that's LEED certified. Your carbon footprint is less. A lot of these buildings are being built with materials that are new, untested technology. We're starting to see a little impact with that. A lot of the stuff hasn't materialized as well as they thought it was going to. A lot of it has but we've seen issues with new materials that don't perform like they were supposed to, such as used rubber tires used in sidings and on buildings are not necessarily holding out the water like we thought they were going to. There are some issues with that and also with some premanufactured lumber, cross laminated lumber that's being used in a lot of construction.
That building and that type of material causes gaps in the wood. There is water getting in. There are issues that have come along with that. We've seen a lot of new technology that's been great but also it's untested and not used yet. You also have a lot of the design issues with a lot of these buildings that have been certified. You have people moving into buildings that you want them to be up to standards and LEED certified. Unfortunately, they're not necessarily meeting those standards. When converting old buildings into these new facilities, the air conditioning systems don't necessarily work as well as they're going to when you have to work around old beams and support structures that don't necessarily allow flow for air. We've seen a lot of advancement, a lot of stuff that isn't performing well.
In general, technology is only helping and making things more efficient, hopefully improving the workforce, the quality that we get, and the quality of the construction.