In 2006, the economic downturn that started for Home Building in 2006 and most other industries in 2008, greatly impacted production home builders in many ways, but the impact on hiring remains even today. Between 2006 and 2012, new talent did not enter the field of home building because companies were cutting back on employees, not adding them. At the same time, many employees in preconstruction and purchasing, construction and construction management, and land acquisition and development who were caught in the early rounds of layoffs left home building for other industries and never came back.
This lapse in people entering the field combined with the layoffs that forced talent into other sectors of the industry created real problems for home builders that are hiring in today’s market. The market is robust, the demand is real, but unfortunately, so is the shortage of professionals in certain skill sets.
Obviously, we know from our high school economics class that increased demand drives costs higher, and in this case, it has resulted in new compensation structures for many home building professions. For example, purchasing professionals are consistently receiving up to 30-40% more in base pay across the experience spectrum, from purchasing agents with very little experience, all the way up to professionals with responsibilities at the corporate level.
Another area of shortage are construction management professionals, including superintendents and project managers. There were so few entering the field for so long, so there is a pronounced gap in those who have 15-25 years in the industry, and those who have less than 5 years under their respective tool belts.
The industry is in a good place right now and growing steadily. Per the National Association of Home Builders, 2016 was the best year for home building in 12 years.
What the industry needs right now requires something from both employees and employers: It requires more people willing to join this wonderful industry of home building BUT it also requires the home builders themselves to come to the realization that because we went through such a lengthy and pronounced downturn, they must step up to the plate and adjust their compensation paradigm to get the desired talent they want and need.
We at Joseph Chris Partners understand both sides of this challenging issue and are here for both our clients and candidates to help educate and further the growth of this wonderful, much needed industry.
Written By: Claire Spence, Executive Partner