According to the U.S. Bureau of Labor Statistics, 6% of the construction workforce is Black and 2% describe their race as Asian. (For comparison, 14% of the U.S. population are Black and 7% are Asian, although both these figures include people younger and older than typical working age.)
In addition to this lack of racial diversity in the industry, there have been many explicit, extreme racist incidents that made the news. These events prompted the creation of Construction Inclusion Week by six major general contracting companies in the U.S. who saw the need to tackle racism and increase diversity and inclusion in the industry.
The inaugural event runs from October 18th to 22nd. There’s a series of educational webinars that you can sign up to attend here: Construction Inclusion Week.
There have been numerous racist incidents on American and Canadian construction sites in the last few years. These include racial slurs, racist graffiti, and nooses found on jobsites. There’s a summary of some of the events here: A Timeline of Racist Incidents on US and Canadian Construction Sites. That article was published a year ago, and since then there have been more, including:
Noose at Merck construction site (North Carolina)
Nooses at Amazon construction site (Connecticut)
The Washington Post reported that “more than four dozen nooses have been reported at 40 building sites and offices across the United States and Canada since 2015.”
Of course, these are only the incidents that get reported and make the news. The more subtle, everyday prejudice and racism that minorities experience doesn’t tend to make the news. In addition to the serious toll on human wellbeing caused by racism and inequality, it also has negative business effects.
The negative business effects of racism
A workplace that is lacking diversity or where racism is tolerated will have greater employee turnover, which is expensive. In the construction industry, this problem is exacerbated by the shortage of skilled labor. The Society for Human Resources Management (SHRM) found that, in the US, workplace racial inequity costs employers about $172 billion annually due to employee turnover alone. Employee turnover costs aren’t just the direct costs involved in the hiring and initial training of a replacement employee, but also the opportunity costs of lost business:
“Often the training costs only count those to get the new employee productive, but they should include all the costs of getting the new employee to the same level of productivity as the employee who left. These costs include both direct costs like the fee paid to a recruiter to find candidates for you, as well as indirect costs like the business you lost because you didn't have the capacity to handle it all while you were short-staffed.”
In addition to costs due to employee turnover, racial bias in the workplace also costs businesses in other ways. For example, the same SHRM report found that, as a result of racial bias in the workplace, increased absenteeism costs US businesses $54.1 billion per year, and $58.7 billion per year in lost productivity.
“Black employees are most at risk for experiencing bias, followed by Latino and Asian-American employees. However, even employees who don't directly experience bias are negatively impacted by observing others being treated unfairly.”
Lawsuits are another time-consuming and costly risk of a racist workplace. For example, a Texas-based general contractor, recently had to pay $420,000 to settle a racial harassment lawsuit. The lawsuit said the company “fostered a work environment rife with racist comments and discriminatory work conditions.”
Read more about that case here:
Another major general contracting company was sued for racial harassment including segregating employees into all-Black work crews with white supervisors, and assigning the least desirable and most physically demanding tasks to the Black crews. This is in addition to racist graffiti and verbal racial slurs.
Read more about this case here:
The importance of paying attention to diversity and inclusion
According to the results of Glassdoor’s Diversity and Inclusion Workplace Survey, most job candidates are evaluating diversity when they research companies during the interview process. Whether or not you do anything about diversity, they’re paying attention.
Furthermore, diversity will become ever more important to job candidates over time, as the US population continues to become more diverse. It’s not something any employer in the construction industry can choose to ignore:
“Between 2010 and 2030, approximately 15 million people who self-identify as white—the predominate workforce of the construction industry—are expected to leave the U.S. labor force. By 2023, people identified as white will comprise less than half of the U.S. population under 30. Currently, 63 percent of the construction industry is white.”
According to the Pew Research Center, Generation Z — those born after 1996 — are more racially and ethnically diverse than any previous generation.
“Generation Z represents the leading edge of the country’s changing racial and ethnic makeup. A bare majority (52%) are non-Hispanic white – significantly smaller than the share of Millennials who were non-Hispanic white in 2002 (61%). One-in-four Gen Zers are Hispanic, 14% are black, 6% are Asian and 5% are some other race or two or more races.”
If construction companies want to hire young people to replace aging workers and those who permanently left as a result of the pandemic, they have to accept that diversity is important. They need to take real, concrete steps to attract a diverse workforce — and to create and inclusive and equitable workplace so they want to stay.
Read more about this issue here:
Diversity and inclusion is beneficial for the employees themselves and is also beneficial for the company that’s hiring them.
“Diverse teams are more equipped to foster innovation. Innovation leads to better results. And results drive company performance and profit.” The Business Case for Diversity and Inclusion in the Construction Industry
In a future post, we’ll look into some strategies construction companies can take to promote diversity, equity, and inclusion — including supplier diversity programs, education on unconscious bias, and executive responsibilities. In the meantime, don’t forget that you can sign up for the free educational webinars at Construction Inclusion Week.