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A Diverse Solution

Embracing New Approaches to Solve the Construction and Insurance Talent Crises

February 20, 2019 Photo

We know the issues that the construction and insurance industries are facing: in sum, a tremendous talent shortage years in the making.

As noted in the Winter 2018 issue of Construction Claims, the construction industry has been dealing with a skilled labor shortage that began during the recession. An Associated General Contractors of America (AGC) survey in August 2018 showed 81 percent of contractors nationally expect that it will be just as or more difficult to hire qualified craft workers over the next 12 months.

Meanwhile, demand for construction projects is rising. According to the United States Census Bureau, construction spending in the U.S. from January to June 2018 was about $620 billion, an increase of 5.1 percent over the $589.6 billion for the same period in 2017. This type of growth sheds light on critical workforce challenges that companies must face if they want to survive the future.

The crux of the problem for the construction industry is that its workforce is aging out faster than new workers are coming in, and the insurance industry faces a similar reality. CLM Magazine’s March 2019 issue cites figures from the Bureau of Labor Statistics showing that the median age of claims professionals was 42.9 last year, compared to 42.2 for the general U.S. workforce.

Even within law firms, there is a decline in interest in the construction industry—especially amongst young barristers—including in the practice of construction-defect law.  

These challenges are not due to a lack of younger people entering the workforce—by 2030, millennials will make up 75% of the workforce. But millennials and younger generations simply lack interest in the construction and insurance industries.

At the same time, the traditional outreach efforts by these industries are not working as well as they have in the past when it comes to recruiting talent. Given that reality, employers in these industries would be well served to look not just beyond their traditional outreach efforts, but also beyond the traditional candidates on which their efforts have focused.

The construction industry, for example, is one of—if not the largest—male dominated industries in the U.S., with white men making up the majority of professionals. In 2018, the U.S. Bureau of Labor Statistics estimated there were just under 11.2 million people employed in the construction industry. Of those, only 9.9 percent were women. Only 39 percent of both men and women in the industry were ethnic minorities.

Employers in this industry may see the talent crisis and the lack of diversity in construction as separate and unrelated issues to address, but a focused effort to appeal to ethnic minorities and women would greatly expand the talent pool from which employers could recruit, which would help solve the talent crisis while also delivering the benefits that come with diversifying the workplace. Accomplishing this, though, will take significant changes on the part of the industry to demonstrate to women and ethnic minorities that construction is a viable and welcoming career path for them.

An Unwelcoming Industry
Discrimination is by far the biggest roadblock preventing the construction industry from becoming a viable option for women and ethnic minorities. Women are discriminated against before they are even hired. Even if they are hired, they are often subjected to gender stereotypes that make it harder for them to retain their jobs, such as employer assumptions about actual or perceived caregiving responsibilities or women’s physical capabilities in the field.

Sometimes, women are hired just to meet a goal—for instance, a contractor being required by a state or local agency to hire a certain number of women for a project. Once the goal is met, women are often fired, regardless of their performance, skills, or work history.

In addition, women are often sexually harassed and degraded. A study by the U.S. Department of Labor reported that 88 percent of women construction workers experience sexual harassment at work, compared to 25 percent of women in the general workforce.

The construction industry is often referred to as “the industry that time forgot” due to the employment practices related to women. These practices include negative stereotypes about women’s ability to perform construction work; sexual tension injected into work contexts; intentions to reserve well-paid positions for men; and reluctance by supervisors and other officials to discipline perpetrators of discrimination. Unfortunately, it is not uncommon for a woman to be placed in a clerical position, as opposed to a physical position, regardless of her experience or talent. This reinforces the notion that women belong in clerical positions.

A 2016 Society of Women Engineers (SWE) study found that only 20 percent of engineering school graduates are female and only 11 percent of the current engineering workforce are women. Furthermore, the study found that workplace climate is the reason cited by almost one-third of women leaving the profession.

Another study, featured in the Harvard Business Review, looked at female engineering students and their experiences with group dynamics—in classroom teams and professional internships. Unfortunately, the survey participants shared that, all too often, they fell victim to stereotypes and gender discrimination, being relegated to unsatisfying tasks like secretarial work or tasks outside of the engineering realm. Conversely, their male counterparts were exposed to many more interesting tasks and opportunities.

Ethnic minorities face somewhat different roadblocks. For instance, it is not uncommon in construction to have a large minority labor force. However, the higher up the ladder you go, the fewer minorities you see. Ethnic minorities are often looked over when it comes time for promotions, and the lack of advancement and promotion, coupled with the transient nature of the industry, makes it unappealing to workers.

These realities in construction cascade to law firms that specialize in construction, which see very few applicants who are women or ethnic minorities. Recruiting at the law school level or beyond is also challenging because all firms are striving to achieve some diversity in their lawyers, meaning lawyers who are not Caucasian males are in high demand and are often torn away from construction firms by recruiters.

A Path Forward
The construction industry can begin to address its problems with attracting ethnic minorities and women—and therefore attracting talent to solve the skilled labor shortage—by first admitting that there is a problem. Many construction companies may not see diversity as a solution to the talent crisis because they do not see lack of diversity as an issue.

Firms interested in attracting more women, for example, should create women’s networking groups within their companies, and encourage women to join women’s networking groups outside of the company. Companies should also change their policies so that they are fair to all employees. If feasible, companies should offer additional training and education credits or mentorship programs.

Companies could also put women and ethnic minorities at the forefront by promoting them to executive positions and finding role models for female and ethnic minority employees. Both women and ethnic minorities need to see that they are represented. They need to see that they will be given the same opportunities as their white male counterparts.

Companies should recognize the achievements of women and ethnic minority employees and demonstrate how both groups have succeeded in the construction industry.

A great way to change the industry and make it more appealing to women and minorities is to advocate for women and minority owned companies. For example, a company could solicit bids from women and minority owned companies. Also, companies should give women and minority applicants an equal chance during the hiring process and select new hires, and promote, based on merit.

At the law firm level, incorporating programs for women, minorities, and LGBTQ, and making those programs part of the infrastructure within firms, will help employers retain talent from a diverse pool. For example, many businesses have adopted the Mansfield Rule, named after Arabella Mansfield, the first woman admitted to the practice of law in the U.S. The Mansfield Rule measures whether law firms have affirmatively considered women and attorneys of color—at least 30 percent of the candidate pool— for leadership and governance roles, equity partner promotions, and lateral positions.   

By adopting the Mansfield Rule as a rule for your firm, you can ensure that your leaders are selected from a diverse candidate pool. The firm should continue to support women by providing tools to facilitate and support successful careers by implementing additional infrastructure to promote retention, by offering mentoring programs with women leaders in their firms. Similarly, supportive working environments should be created for minorities and LGBTQ communities to ensure their long-term success at your firm.   

Establishing infrastructure can be as simple as organizing monthly lunches for minority lawyers where those in leadership roles can share their career development strategies with the younger lawyers. These lunches can create a sense of community and a space to share experiences and cultivate mentoring relationships. An example of infrastructure that can assist LGBTQ attorneys is to provide health benefits to domestic partners, as they do for spouses, instead of accepting inequalities in the tax code.  

Recruiting a New, 
Diverse Generation
The construction industry overall needs to make concerted efforts to encourage candidates to come into the industry. More proactive recruiting such as offering internships/scholarships while candidates are in school is an option the industry should pursue more.

Law Firms also should adjust their recruiting efforts. Firms currently recruit at the law school level, but they need to go beyond the closest local university and explore law schools that have more minority attendance, even if those schools are further away, so students at those schools can be exposed to the construction industry and the benefits of entering this field. Additionally, firms need to interact more with school alumni programs for paralegals and legal assistants and then develop programs to assist diverse students to go to law school.

This philosophy applies equally to insurers. While the industry has made progress setting up insurance programs at and recruiting from universities, looking beyond the same institutions and to colleges attended by more ethnic minority students will open more connections to a whole new talent pool and open doors for ethnic minorities who may have never considered insurance as a career path.

For construction and insurance, what is at stake is basically the future direction of these industries. As such, it would be best if both industries were able to collaborate, fund, and promote the viability of construction and insurance claims careers, and the connections between the two industries.

How do we get to that point? Through collaboration with groups of similar interests. To that end, one idea that could work is creating a partnership of bridge programs for college and high school students. This proposed partnership network would instruct the next generation of industry professionals on various lines of construction programs, coverages, and claims, with a focus on education as well as licensing. This initiative could be patterned on the CLM Claims College program that currently exists, but located in different areas of the country and working with local partners.

Employers cannot be discouraged. They must acknowledge and accept that, at present, there is a dearth of candidates to hire and there are challenges to keeping candidates in the industry once there. Construction is not a field that seems appealing to most people, and, as a result, the industry needs to help promote a change in the perception that it is a male dominated field.

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About The Authors
Multiple Contributors
Elaine K. Fresch

Elaine K. Fresch is a partner with CLM Member Firm Selman Breitman. She can be reached at (310) 689-7016, efresch@selmanbreitman.com

Dwight Geddes

Dwight Geddes is the head of Metro Claims Mgmt NYC Inc.dwight@metroclaimsnyc.com

Wakako Uritani

Wakako Uritani is a partner at Lorber, Greenfield & Polito, LLP. wuritani@lorberlaw.com

Lisa Reyes

Lisa Reyes is senior claims specialist at Vela Insurance Services.  lreyes@vela-ins.com

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