Congratulations to Paul Johnson Drywall customers D.R. Horton, Pulte Homes and Standard Pacific / CalAtlantic Group for making the Top 5 on Builder Magazine’s List of The Top 100 Home Builders in 2016!!
In 2012, the Department of Labor approached Paul Johnson Drywall Inc. to review our employment practices and compensation structures as part of its worker misclassification initiative. What began …
Source: Game Changer
I am frequently asked, why, given that single-family home permits and starts are still lagging the current recovery, are we facing such a significant labor shortage?
What’s happened in residential construction, as the economic recovery has been underway, has been a shift from single-family home construction to multi-family construction. While there is a direct correlation between starts and permits in single-family delivery, because there are numerous units within one multi-family building and work within each apartment is typically more than what is required in a home, labor requirements are exponentially higher in multi-family construction.
Understanding this, all you have to do is look to the Construction Pipeline for Phoenix and Tucson reported by ABI Multifamily. Within these reports, simply compare the 2015 units delivered with the 2016 estimated unit delivery to understand the significant demands on our labor pool in Arizona. According to the report, Phoenix alone is showing an anticipated 11,000 units will be delivered in 2016 vs. 4,661 in 2015, an increase that more than doubles the demand on labor. Likewise, in Tucson the anticipated number of units delivered in 2016 is 1,000, which also is more than double the 445 units that were delivered in 2015.
The staggering growth in multi-family alone has placed higher than usual demands on the local labor pool. In addition, because of the growth, multi-family has attracted general contractors and subcontractors who have not been focused in the market previously. This broadening of firms into new markets is pulling labor from other areas and causing stress in commercial construction as well.
We’re not the only ones to recognize that the growth is significant. In the March 25, 2016 issue of the Phoenix Business Journal, bankers spoke of their transition away from financing multi-family projects. In the article, “Banks see Some Tarnish in Multi-Family’s Shimmer,” Ed Zito, president of Alliance Bank of Arizona, said his institution has moved past multifamily and said “multifamily is too competitive.” Also, David Ralston, chairman and CEO of Bank of Arizona said, “We’ve avoided lending on multi-family projects.”
As usual, the market is going to correct itself. However, due to substantial demands by the multi-family sector, the construction industry will continue to face significant labor challenges through 2016.
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1720 W. Parkside Lane
Phoenix, AZ 85027
1620 Willow Creek Road
Prescott, AZ 86301
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5957 McLeod Drive
Las Vegas, NV 89120
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Firm recruits 112 and re-hires nearly 100 skilled-workers since January 1, 2016
Since January 1st Paul Johnson Drywall has been highly-focused on ensuring that our best customers can count on us to deliver on our deadlines. We began implementing major initiatives that have already allowed us to successfully recruit 112 new workers and approximately 100 workers were re-hired as permanent full-time crew members. Our growing crews are serving clients in Arizona and Nevada where some market segments are returning to pre-recession activity levels.
You may be wondering how we are doing this in such a tight labor market. Well, it’s pretty basic; we are offering every employee excellent wages and benefits, including paying the highest wages in its markets and providing all full-time employees with paid vacation, healthcare for them and their families, and bonuses for performance at the end-of-the-year. The firm’s new and returning employees include primarily experienced craftsmen who will serve as crew leaders and members. Adding the new employees has increased the firm’s permanent full time-crews in Phoenix by more than 20 percent.
“As you know, we continue to face significant labor shortages nationally and more specifically across the southwest, particularly in recent months as construction activity has been increasing. As a result, Paul Johnson Drywall is aggressively recruiting crews by offering the highest wages in the market and providing benefits that were previously unknown to crews in the drywall industry,” said Cole Johnson, President of Paul Johnson Drywall.
While these initial results are positive for our firm and ultimately provides our best customers with the confidence in knowing their deadlines will be met, the worker shortage will continue to impact the construction industry. That is why Paul Johnson Drywall is elevating its appeal to the current market workforce and working to attract brand new workers to a career in construction. In addition to these pay increases and new benefits Paul Johnson Drywall is engaged in apprentice training programs and is taking action to further build upon our seasonal worker program.
“Our crews told us what they want, and we are delivering it. We are taking actions that will help us recruit and retain employees while also expanding our labor pool to ensure we increase capacity and are able to respond to the needs of our best customers,” said Johnson.
We are focused on this, and we are willing to do what it takes to do right by our customers and our employees.