Will a "silver tsunami" impact construction industry infrastructure projects?

An exodus of seasoned labor is creating concerns around cost increases and loss of experience

May 10, 2023

There’s a mounting skills gap in the infrastructure industry that has state and local government officials worried.

The U.S. Bureau of Labor Statistics estimates 1.7 million people employed in the infrastructure sector will leave their jobs each year between 2021 and 2031. A report by the Brookings Institution shows that the current demographics of the infrastructure workforce, which tends to skew “older, male and white,” is driving the exodus. 

The report says it’s not just infrastructure workers retiring. People are also leaving jobs at pace in construction, transportation, warehousing, and utilities. Industry experts are calling it a “silver tsunami.” 

For all levels of the U.S. government, this is becoming a problem. As state and local government officials gain access to new federal grants and incentives to fund much-needed infrastructure projects, labor shortages and skill gap is creating a pause on whether the projects can be delivered on time and maintained. 

“There’s a huge need for talent specializing in these areas,” says Jennifer Hara, Vice President with JLL’s Clean Energy and Infrastructure team. “Coupled with the rise in baby boomer retirements, many state and local government officials aren’t prepared. Finding and recruiting the right talent for these sustainability-focused projects is huge, and there’s a big need to upskill and reskill existing talent to get these projects done.”

 It’s also about costs. Challenges range from the cost of projects increasing—whether that is because the cost of goods has risen, the cost of talent has increased, or just the sheer amount of time it takes to realize said projects, Hara says.

“Just as the cost of goods is being exacerbated by current supply chain challenges, the same situation is impacting the cost of labor. When you have a labor shortage, salaries tend to increase,” she adds. “Those costs are then passed on to the project's total cost, which is having the follow-on effect of all the trillions of federal funds not going as far as our legislature would have hoped.”

Looking for solutions

In response, officials and stakeholders have pushed several initiatives to help address talent shortages and alleviate cost pressures. 

Hara says that a lot of work has gone into ensuring people explore careers in the industry, such as a massive push of STEM programs starting in grade school in the past decade and a focused recruitment of women and people of color.

However, “recent college graduates are not going to have any experience when they enter the workforce,” Hara says. “I think there is a bit of a slow movement afoot to ensure some of that knowledge is passed down. But, quite frankly, the best way to learn how to do something is to do it.”

Just like as municipalities and state officials looked to public-private partnerships (P3s) to realize large infrastructure projects, Hara says outsourcing advisory and project management services will be vital in completing these projects on time and within budget during the learning curve.

“Thinking long-term is going to be immensely beneficial to these infrastructure projects,” Hara says. “These projects have an opportunity to have long-lasting ripple effects in terms of creating a framework that sets up other options with starting new businesses and engaging with new groups of stakeholders and employees.

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