Construction Workers Retiring & the Ripple Effect on the Insurance Industry
By Matt Horton, Vice President of Distributon
Look around – there’s no denying the construction industry is booming.
As a result of this growth, more workers are needed to bring projects to completion. In fact, the U.S. Bureau of Labor Statistics shows that the employment outlook for construction workers is keeping pace with the average growth of all other industries, with a projected growth rate of 4% by the end of 2031.
As an insurance professional with construction clients, you’re likely seeing companies revel in the influx of ongoing and new-business opportunities as well as job growth in the industry. Unfortunately, along with the exponential growth, the industry may soon face a significant worker deficit over the coming years. Why? One word: Retirement.
"...the employment outlook for construction workers is keeping pace with the average growth of all other industries, with a projected growth rate of 4% by the end of 2031."
– Source: Bureau of Labor Statistics
Today, approximately one in four construction workers is older than age 55. Many of these older workers are highly skilled and have decades of construction experience, making them difficult to replace once they retire. By the end of 2031, it is estimated that 41% of all construction industry employees will enter retirement.
With so many baby boomers setting their sights on retiring, employers must soon begin to address employment gaps if they are to keep up with the pace of new construction. Retail insurance brokers should help their construction industry business clients recognize ways they can improve recruiting efforts, retain existing workers, and ultimately mitigate insurance risks and costs.
“...the construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 if they are to meet the demand for skilled workers.”
– Source: Associated Builders and Contractors
Proactively Addressing the Looming Employment Gap
According to Associated Builders and Contractors, the construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 if they are to meet the demand for skilled workers. In 2024, it is predicted that the industry must bring in more than 342,000 new workers, in addition to normal hiring, to meet the demand.
A growing trend for recruiting and retaining employees is the development of an employer value proposition, or EVP. Simply put, an EVP is a program that lists the insurance and other benefits that a company offers its employees. Creating an EVP makes a business more attractive to qualified applicants and can help prevent them from seeking employment from the competition. An EVP can also be useful in retaining valued workers who recognize and appreciate the benefits provided and who may just decide to stick around a bit longer.
By helping construction businesses improve their recruiting and hiring processes, insurance brokers can indirectly contribute to reducing insurance risks and costs. A highly skilled and motivated workforce is more likely to adhere to safety protocols – leading to fewer accidents, injuries, and insurance claims.
Matt Horton is Vice President of Distribution of Builders & Tradesmen's Insurance Services, Inc., an Amynta Group Company.
Builders & Tradesmen’s Insurance Services Inc.
Part of the Amynta Group, BTIS is a nationwide insurance intermediary with a small-business attitude.
We recognize that employees need and expect good benefits packages. We also know that for mandated coverages such as workers’ compensation insurance, not all carriers and policies are created equal. When workers are injured or become ill due to a work-related event, our carrier partners provide the ongoing support and services that employees will appreciate.
To learn more about our workers’ compensation markets or other insurance products, please reach out to Matt Horton, CRIS, VP of Distribution at BTIS, at 916.772.9200 or email firstname.lastname@example.org.