Mega projects cost mega bucks. Mega projects that have been planned without paying attention to labor outlooks can cause mega headaches, including cost overruns, rework, and delayed and missed schedules.
Phil O’Brien, a Project Executive with Turner Construction Company, believes that any owner considering a mega project needs to understand how labor shortages can impact a project’s timetable. “And if they don’t, dollars spent are going to go up and schedules will be thrown off course,” says O’Brien.
O’Brien says that Turner typically does not have labor problems, with most of its construction projects taking place in areas that, so far, have not been hit by shortages. Turner’s staff of over 5,000 employees work on more than 1,200 projects each year, to the tune of $9 billion in annual construction volume. The company ranks first or second in the industry’s major market segments.
Turner has not dealt with labor shortages yet but this does not mean that they are ignoring the problem. In fact, says O’Brien, “We have had two owners from different areas of the country request that we include in-depth labor forecast information in recent bids.”
In particular, these two owners requested Turner use the Construction Labor Market Analyzer® (CLMA®). O’Brien says that as contractors, it is essential to accommodate these sorts of requests and the CLMA® helped them pull together the information they needed to answer the questions.
While O’Brien and his team have only been using the CLMA® for a few months, he thinks the need will increase as time passes.
“As far as the talk about labor shortages, I do think there will be problems very soon. The type of skills required in the oil and gas industry, and the heavy and industrial markets, are so specialized. All of these types of projects are going to be competing for the same workers and if owners and contractors aren’t prepared, they most certainly are going to find themselves in a pinch.”
O’Brien also believes that certain geographical markets, like Louisiana and the southern United States, Ohio and Arizona, are likely to be hit hard―if they are not already feeling the pressure. “Looking at the industries that are now picking up and at what projects our clients are planning for, I have a real sense that project planners who are unprepared are going to run into major issues.”
This is why labor forecasting tools are so important, stresses O’Brien. However, when asked the question “why should other contractors check out the CLMA®?” he joked, “I’m not going to tell contractors to use this; it is such a great tool, I want it for myself.”
The CLMA is designed to help owners, contractors, unions and other industry stakeholders dynamically understand the skilled labor market and more effectively know how to employ risk mitigation strategies.