The words “diversity” and “inclusion” are not typically used to describe the construction industry and the latest Bureau of Labor Statistics results provide insight as to why. Women continue to be underrepresented, making up only 9 percent of the construction workforce; ethnic minorities make up approximately 37 percent. There is a major opportunity for the construction industry to benefit from increased workforce diversity and inclusion.
Research shows that a diverse and inclusive workforce results in improved business performance in terms of innovation, collaboration and responsiveness to changing customer needs. A recent study by McKinsey & Company demonstrates that gender diverse companies are 15 percent more likely to have financial returns above industry median, and ethnically diverse companies are 35 percent more likely.
The construction industry has started to recognize diversity and inclusion are key factors to the future success and growth of the industry. This growth is supported by efforts from two of the largest construction industry trade organizations in the United States: the Associated Builders and Contractors, Inc. (ABC) and the Associated General Contractors of America (AGC). In 2015, construction industry leaders and stakeholders started meeting for the annual Diversity and Inclusion Summit hosted by ABC to discuss the value of having a diverse and inclusive workforce, and to learn the best practices. AGC created the Diversity & Inclusion Council to develop and implement association initiatives related to diversity and inclusion. The construction industry will begin to see a lot more on diversity and inclusion thanks to the efforts of these two organizations.
The Business Case
As companies continue to expand into global markets and competition increases, the business case for embracing diversity and inclusion in the workplace becomes more apparent. Benefits of workforce diversity in the construction industry include the following:
Innovation And Global Success
Workforce diversity and inclusion brings together different perspectives, experiences and ideas that foster innovative and creative solutions, which are essential for expanding into global markets and having a competitive advantage when bidding on construction projects. As construction projects continue to become more complex, innovative and creative solutions are vital for delivering quality construction projects on time and within budget. Workforce diversity and inclusion allow for a better understanding of different cultures, ensuring that client expectations are met and communication flows smoothly.
The number of minority-owned and women-owned businesses continues to increase each year. Joint venture partnerships between larger companies and Minority Business Enterprises (MBE) and Women Business Enterprises (WBE) are being utilized more frequently, providing benefits to both parties. These partnerships allow for smaller companies to participate on large scale projects and grow their businesses, whereas larger companies can strengthen proposals and meet federal government targets for subcontracting plans. Federal government construction projects typically require a certain percentage of MBE or WBE participation. The U.S. Small Business Administration (SBA) offers a Mentor-Protégé Program designed to enhance the protégé capabilities and improve the protégé ability to successfully compete for contracts.
Attracting Top Talent
Hiring the best talent is vital to a company’s future growth and market relevance. A company culture that values diversity and inclusion is the key to attracting top talent. Candidates are seeking the opportunity to work with diverse team members who represent different interests, experiences, education and cultural backgrounds within inclusive environments where they feel respected and valued. The construction industry is currently experiencing a skilled labor shortage so leveraging diversity and inclusion as a means of recruiting top talent may help close this gap.
Diversity Starts With Recruitment and Retention
Recruitment and retention of a diverse workforce is not easy. Implementing processes and programs to recruit and retain a diverse workforce is vital for growth and success.
Most companies lean on professional organizations and university career fairs as the primary process for recruiting a diverse workforce. Some companies rely more on employee referrals and offer monetary incentives for referring a new hire to encourage participation.
Programs aimed at retaining a diverse workforce include mentoring groups, diversity and inclusion training, professional development seminars and employee resource groups (ERGs). Most companies rely heavily on professional organizations to supplement diversity-focused retention programs such as the Society of Women Engineers (SWE), which develops programs and training geared toward professional excellence and advocating for workforce diversity and inclusion.
Inclusion Is the Key to Success
Diversity is just the start to improving business performance — inclusion is the real key to success. A recent study by Deloitte shows that companies who support inclusion are 80 percent more likely to be high-functioning organizations, and employees who feel highly included in the workplace are more engaged and more productive.
Inclusion is defined as not only the act of integration, but also the feeling of belonging. Instilling this feeling starts with upper management, and there are two factors driving it: 1) fairness and respect and 2) value and belonging. Fairness and respect are based on equality of treatment, while value and belonging relates to feeling appreciated as an integral part of the team. Once these two factors are achieved, employees will have a voice and feel connected.
The construction industry is slow to change, but it is time to break ground, and major industry organizations such as ABC and AGC have begun the process. The business case is clear: diversity and inclusion are key factors for the industry’s future success and growth. A diverse and inclusive workforce results in improved business performance in terms of innovation, collaboration and responsiveness to changing customer needs. Diversity starts with recruitment and retention programs, but inclusion is vital for overall success.
Kate Hull is a Managing Consultant at Spire Consulting Group, LLC in Austin, where she assists owners, contractors and subcontractors across numerous sectors within the AEC industry on both proactive and forensic consulting projects. Ms. Hull is an active member in numerous professional organizations including the Society of Women Engineers, Association for the Advancement of Cost Engineering International and Associated General Contractors of America.