Trends to watch for artisan contractors

Artisan contractors are essential to a variety of residential and commercial construction projects. While general contractors usually manage projects in their entirety, artisan contractors typically possess a highly developed skill set within a specific trade and are responsible for performing more specialized project tasks. Examples of artisan contractors include electricians, carpenters, plumbers and roofers.¹

Because artisan contractors are part of the larger construction sector, they are often affected by the latest industry developments. Between increased project demand, employee and material shortages, and new technology advancements, there are a range of trends currently impacting artisan contractors. Keep reading for more information on these developments.

Overview

Although businesses across industry lines have experienced economic hardship amid the ongoing COVID-19 pandemic, some sectors have fared better than others. Specifically, the residential construction sector has thrived during this time due to a boost in demand for household projects and services. In fact, residential construction spending has increased by 25% since the beginning of the pandemic.² This increase in demand has primarily been motivated by a combination of record-low interest rates and rising home prices, making many homeowners more interested in improving upon their current properties than purchasing new ones.

Furthermore, the pandemic has contributed to individuals spending more time in their homes than ever before, thus encouraging them to make various household enhancements. For example, some individuals have remodeled their kitchens to cook more homemade meals, while others have created or updated their home office spaces in light of remote work trends. In any case, this increase in residential construction projects has certainly driven up artisan contractors' workloads. This is primarily because these contractors are often involved in various aspects of such projects—whether this entails an electrician upgrading the electrical paneling in a home entertainment space or a plumber installing a new shower within a renovated bathroom.³

Looking ahead, the commercial construction sector is expected to experience a boost throughout 2022 due to President Joe Biden's trillion-dollar infrastructure funding.⁴ While this funding likely won't impact artisan contractors due to their focus on residential projects, it could lead to further limitations in an already tight labor market for the overall construction industry, impacting artisan contractors in need of employees.

Employee shortages

Across the board, artisan contractors are facing significant employee shortages. Such shortages have resulted from several issues, including decreased interest in trade professions and a growing number of people exiting the workforce—whether for retirement or to pursue a new career path. Looking at the construction industry as a whole, the sector will need to hire an additional 2.2 million employees between 2022 and 2024 to keep up with project demand.⁶

These staffing shortages have already led to costly consequences for many artisan contractors, ultimately causing project delays and cancellations. According to a recent survey, the vast majority (88%) of contractors are experiencing project delays, with 61% confirming that such delays have stemmed from workforce shortages.⁷ To combat employee shortages, artisan contractors have leveraged a variety of different tactics. Some of the most common measures include:

• Offering apprenticeships—In order to ensure skilled and qualified workers, many artisan contractors have invested in apprenticeship programs. These programs provide on-the-job experience and education to employees new to the field. Within the past decade, apprenticeship programs have increased by 70%, with an additional 13,500 programs being introduced in the last five years alone.⁸

• Attracting younger workers—Some artisan contractors have also made an effort to interest younger workers in trade professions by establishing initiatives with high schools and technical schools. Such initiatives may entail presenting at career fairs, offering extracurricular opportunities and providing summer internships.⁹

• Expanding to new demographics—Another way that artisan contractors have gained new talent is by marketing open positions to new demographics. Currently, nearly 90% of employees within the overall construction industry are white. Further, just 11% of those working in the sector are women. Such statistics showcase the importance of advertising contractor jobs to an expanded set of demographics, thus allowing for a deeper and more diverse talent pool.¹⁰

• Implementing "returnships"—Apart from attracting new employees, some artisan contractors have created returnships programs. These programs focus on encouraging individuals with existing talent and experience to return to the workforce after spending time away from their careers. Employees who participate in returnship programs are typically mid-career professionals who already possess skills that other new workers have not fully developed. These traits them increasingly cost-effective hires, as they require less training and initial onboarding resources. Returnship programs have become especially common amid the pandemic, targeting employees who may have left their jobs due to health concerns or caregiving responsibilities (e.g., elderly individuals and women).¹¹

• Increasing pay—To retain current employees, certain artisan contractors have decided to increase their employees' salaries. In the past two years alone, construction worker wages jumped 3.4% in 2020 and a further 3.3% in 2021. Such pay increases were both greater than the all-industry averages for their respective years.¹²

Material shortages

While increased residential project demand has created more job opportunities for artisan contractors, it has also led to greater demand for various construction materials—demand that has far exceeded available inventory. The majority of builders have reported supply shortages for several key materials, including appliances (95%), framing lumber (94%), oriented strand board (92%), plywood (90%) and windows and doors (87%).¹³

In response to these shortages, construction material prices have skyrocketed, creating substantial inflation concerns. What's worse, the ongoing uncertainty surrounding the pandemic and the potential for future supply chain bottlenecks are expected to contribute to continued inflation issues for many materials in the months to come, with price stabilization not anticipated until the latter half of 2022.¹⁴

To minimize inventory shortages, some artisan contractors have resorted to swapping project materials, using alternative supplies that are readily available rather than waiting for delayed items. However, doing so could carry additional ramifications. First, alternative building materials can sometimes be more expensive than original supplies, ramping up overall project costs. Second, swapping supplies may also lead to further complications with project design and final appearance, depending on material quality and aesthetics.¹⁵ Altogether, this practice can end up introducing more problems to a project instead of offering a valid solution.

In addition to swapping materials, some artisan contractors have begun hoarding supplies to prevent shortages. Yet, this tactic also comes with risks to consider. Primarily, the initial costs of purchasing excess inventory can be significant. Compounding concerns, having additional materials can make artisan contractors more vulnerable to theft, increasing the risk of stolen supplies.

Technology advancements

In recent years, artisan contractors have adopted a range of technology advancements to promote sustainability and ensure smooth operations. Some key advancements include the following:¹⁶

• Eco-friendly materials—In an effort to preserve the environment and ensure more sustainable operations, some artisan contractors have begun prioritizing the use of eco-friendly materials within their projects. Examples of sustainable materials include bamboo, composite roofing shingles, solar panels, straw bales, recycled plastic, ferrock, wool and cork.¹⁷

• Wearable safety technology—Keeping employees safe on the job is important to any contractor. That's why a growing number of artisan contractors have leveraged wearable safety technology to better protect their workers during projects. This technology consists of lightweight, wearable sensors that can be attached to employees' apparel or personal protective equipment (PPE). These sensors are able to monitor employees' location, movements, vital signs and nearby hazards. In using wearable safety technology, artisan contractors can easily detect when their workers are in danger or showing signs of illness (e.g., fatigue), thus catching problems before they become severe. Amid the pandemic, some artisan contractors have even used this technology to detect possible COVID-19 exposures.

• Drones—Some artisan contractors have started using drones to better assess the worksite and collect important information on the job. These small aircraft are equipped with cameras and other scanners to help conduct project inspections, identify hazards and evaluate employee behavior in a timely, efficient manner. The remote monitoring capabilities of drones also allow artisan contractors to review the worksite from areas where it would be unsafe for an actual employee to do so (e.g., the roof).

• Modular and prefabricated construction—Off-site construction refers to the process of completing certain project tasks within a separate space, then transporting that finished work to the final project location. This type of construction is either classified as modular, which entails full rooms being built off-site and transported in their entirety, or prefabricated, which entails specific building components being constructed off-site and actually installed once they reach the final worksite. Off-site construction has grown in popularity over the years for many contractors, and artisan contractors are no exception. This form of construction allows contractors to conduct the majority of their project tasks in safer, more controlled environments—often resulting in faster production capabilities and reduced project expenses. Off-site construction can also help artisan contractors combat labor shortages, as employees may be more willing to work at alternative locations.

Moving forward

As a whole, it's clear that a number of developments in the construction industry are currently impacting artisan contractors, with the potential to continue affecting these contractors in the months ahead.

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