The Importance of Seeing Diversity in Management Roles Within the Construction Industry

Editorial Note: This article was brought to you courtesy of Rose Morrison, managing editor of Renovated.com.    

You hear about diversity and inclusion in nearly every industry nowadays. This concept is even more crucial for construction, which is at a crossroads in the 21st century. The old guard is retiring by the day, leaving gaps in construction companies worldwide. How can the built environment recover and continue growing? One strategy you should consider is diversification, especially within management roles. Read this guide to see the importance of diversity and how to increase it at your company.

What Is the State of Diversity in Construction?

The construction industry has progressed in its diversity efforts but needs more work to achieve a more equitable status. The Bureau of Labor Statistics says women constitute only 10% of the construction workforce, with about 1.2 million employed nationwide.

The BLS also says women in construction are most likely to work in an office or administrative position. Only about 30% of women in construction work in a management, business or financial operations position. Men have significantly higher representation in nearly every occupation within the construction industry.  

The diversity issues with construction also extend to race. Currently, non-Hispanic white people occupy about 60.9% of the sector’s workforce. In contrast, Black and Asian people only constitute 5.1% and 1.8%, respectively. These numbers fall behind each race’s representation in the American workforce. 

You’re likely to see these numbers change this decade as more construction organizations focus on diversity and inclusion. Why has the industry changed so much in the past few years? Why is diversity necessary for the built sector moving forward?

Related Content:

• Construction Companies That Lack Diversity Lack Profitability
• How Can the Construction Industry Bridge the Diversity Gap?

Why Is Diversity In Construction Management Important?

For decades, construction organizations have mostly comprised white men. Now, companies are seeing the benefits of including more voices from different walks of life. Here are six reasons why diversity in construction management is essential for the industry.

1. Addressing the Labor Shortage

The Great Recession of the late 2000s and the COVID-19 pandemic have significantly harmed the construction industry. Both significant events led to massive exits and early retirements in the built sector, contributing to reduced activity worldwide. In 2023, you can still see the labor shortage going strong. Associated Builders and Contractors says construction must hire about 546,000 workers to keep pace with labor demands or risk falling further behind.

Diversity and inclusion initiatives address the labor shortage by widening the talent pool and making potential employers feel welcome. Seeing diversity is vital for modern jobseekers and may lead to them walking away if they don’t see it. Glassdoor finds 76% of job seekers prioritize diversity when evaluating companies and various job offers. Demonstrating seriousness with diversity and inclusion leads to better talent and improved organizational outcomes.

2. Ensuring Comfort at Work

At work, you want to feel comfortable with those around you. Your time is more positive when you have people who understand your background and life experiences. Women and minorities might not feel this way if their managers never look like them. Diversifying management teams helps construction workers’ sense of belonging and makes them feel safer on the job site.  

A significant portion of Black and Hispanic employees (47% and 49%, respectively) have quit their jobs after seeing discrimination or experiencing it for themselves. Diversifying management roles in construction reduces the likelihood these events will repeat themselves in the future.

The construction industry also must do more to ensure women feel safe in the workplace. Despite increased hiring efforts, harassment and discrimination still occur against women. The Institute for Women’s Policy Research finds 44% of women have considered leaving construction, with nearly half citing harassment and lack of respect. Also, about 24% of women say they always or frequently face sexual harassment at work. Putting more women in charge decreases the likelihood of these events.

3. Boosting Creativity

Creativity and problem-solving skills are essential in construction. Some projects may be more difficult, or a client may have specific requests for the building specs. Your management team must be able to navigate the tiniest details and ensure client satisfaction. How can you increase creativity on your team? Diversify your management to see innovative and out-of-the-box thinking.

A 2022 International Journal of Advanced Academic Research study examines how diversity affects productivity in the modern workplace. The researchers conclude diversity allows employees to connect with others from unfamiliar cultures. Learning new customs and traditions has positive cognitive effects, such as creativity and invention. Acknowledging different perspectives leads to everybody feeling heard and appreciated for their work.

4. Gaining New Perspectives

Introducing employees from all walks of life helps your company gain new perspectives on the industry. Your new management team may have learned different methods if they studied internationally, contributing to innovative ways of thinking and problem-solving skills.

For example, suppose the newest member of your construction company comes from Singapore — a city-state famous for its sustainability and innovative technology. Your Singaporean colleague will bring unique perspectives on sustainability because they regularly use solar panels, passive solar design and other intelligent design features. These new ways of sustainable thinking can take your company to the next level on domestic and global scales.

Sustainability and diversity go hand in hand when considering environmental, social and governance (ESG) scores. ESG scores are essential nowadays for measuring your company’s commitment to the previously mentioned standards. You can improve your ESG scores by developing carbon reduction strategies and carefully monitoring water use. Hiring women and minority voices brings innovative ways to achieve these crucial goals.

5. Enhancing Performance

Diversifying your management team leads to better performance for your construction organization. With different voices in the room, your company will make better decisions, increase creativity, and solve problems more efficiently. Plus, you’ll have an easier time crossing into different markets in the U.S. and worldwide. Research has consistently demonstrated diversified companies outperform their competitors.

A 2020 McKinsey study finds gender diversity spurs increased performance when companies hire at least 30% of women on the executive level. Their research finds these companies are 48% more likely to outperform similar companies with inferior gender diversity.

When workplaces are homogenous, they often become stale. A group of 10 people with the same gender and race are more likely to engage in groupthink and challenge the status quo. Diversifying the management team brings financial incentives to construction companies. Zippia research finds diverse businesses have more than double the cash flow of monolithic work environments.

6. Following Through on Promises

ESG standards have become a significant focus for construction companies and corporations across the S&P 500. Organizations worldwide have used PR campaigns to state their dedication to diversity and inclusion, but their actions speak louder than words. Some companies have shown minimal improvement in the last few years, demonstrating they aren’t as serious about diversity as they said.  

For instance, consider 2020 research from Mercer, an HR consulting company. Their researchers conclude about 64% of workers in entry-level positions are white, increasing to 85% for the executive ranks. Women and minorities face gaps in promotions, typically encountering more obstacles than their white male counterparts. Putting all employees on a level playing field for promotions is vital for ensuring the construction industry stays true to diversity standards in the future. 

How Can You Make Your Management Teams More Diverse?

While supporting diversity is an excellent start, implementing diversity in your construction company is equally important. How can you ensure your team is the best it can be? Here are four strategies for diversifying.

1. Implementing Non-Discrimination Policies

Diversification starts with your company and its infrastructure. Are your rules conducive to a friendly work environment? Modern jobseekers, especially in construction, are picky about their workplaces, so enforcing non-discrimination policies is essential. Your job sites should be free of any harassment based on race, gender or any other trait.

A 2020 Journal of Management in Engineering study examines how companies foster diversity in the workplace. The researchers find several indicators, including:

• A non-discrimination policy statement
• Gender and ethnic diversity in leadership
• Equitable payment
• Merit-based recruitment and promotion

Your employees of all races and genders will feel much safer if they have protection and know management will enforce the rules.

2. Professional Development

Recruiting and retaining women and minority candidates are critical parts of your construction company. How can you ensure your employees get the most out of their time and stay with your business? One of the best ways is to emphasize professional development. Women and minorities typically have a more challenging time getting promotions and raises, so making professional development readily available helps open opportunities that attract and retain these employees.

A 2020 Journal of Management in Engineering study scrutinizes what brings and keeps women in electrical construction. The researchers conclude women in leadership prioritize professional training, relationships with coworkers and nonmonetary rewards. Focusing on jobseeker’s requests in the short and long term significantly helps with diversity and inclusion.

Starting Apprenticeship Programs

The construction industry isn’t getting any younger. Many older workers have retired since 2008, causing numerous openings in construction — particularly in management. The BLS says you’ll see about 39,000 construction management positions open yearly because of retirements or people moving to other occupations. How can you use diversity and inclusion to fill the gaps? Some businesses have partnered with community colleges and vocational schools and started apprenticeship programs.

These educational institutions see people of all ages, ethnicities and genders, creating an excellent opportunity for construction companies to aid diversity. With these partnerships, you can develop qualified workers and ensure they’re ready for the job when they graduate. You can also help women and minority students with scholarships to pay for their education. Investing in students now leads to more management opportunities and a reduced need for on-the-job training.

• Related Content: What Are the Highest-Paying Apprenticeships in Construction?

Partnering With Diversity-Focused Organizations

Another option is to partner with diversity-focused organizations within the construction industry. These groups provide training and education to women and minorities seeking jobs in construction management and other occupations across the industry. Most of these organizations have corporate memberships available, giving you access to these worthy causes.

Some organizations in the U.S. include the National Association of Women in Construction (NAWIC), the National Black Contractors Association (NBCA), the U.S. Minority Contractors Association (USMCA) and Women Construction Owners and Executives USA (WCOE).

Promoting Diversity in Construction Management

Diversity and inclusion are becoming increasingly vital each year for companies worldwide. The construction industry has made some progress with these initiatives. However, more work is necessary to ensure women and minorities have equal opportunities for management positions. This guide demonstrates why diversity is important for construction management and what you can do to make your company more inclusive.

This is a guest post written by Rose Morrison, managing editor of Renovated.com