Jul 14, 2017
There’s no shortage of content documenting the traits and trends of the millennial generation. The Internet is full of articles trying to define a group of people that span a 15-year age range. In every industry, people are trying to predict how the characteristics of this generation will shape consumer behaviors and employment trends.
The world has mixed feelings about millennials. For some, millennial traits are frustrating and disruptive. For others, they see this new generation of workers and buyers as innovative, engaged and eager. Whatever your opinion, there’s no denying that the expectations of millennials – influenced by their wants, needs, dreams and fears – are re-shaping industries that have remained relatively stable for decades. Construction is one of them.
Millennials vs Xennials
Because the age range of millennials is so wide, predicting how their purchasing patterns will affect certain industries can be difficult. Most people define millennials as adults aged 20-36 in the year 2017. Because this is such a broad age range, a new term has been coined to refer to a subset of millennials in their 30s: xennials. Xennials can still remember a time before the internet and they didn’t have social media when they were in public and high school. Millennials, on the other hand, have had access to advanced technology their entire lives.
Beyond their access to tech, millennials and xennials also differ in their financial attitudes. The US economy changed significantly throughout the 80s and 90s, and these conditions impacted millennials and xennials differently. In an interview with Construction Dive, John Burns, CEO of John Burns Real Estate Consulting, explains that xennials were born during a time where debt was encouraged, while millennials witnessed their parents accruing lots of debt and saw the financial hardship they experienced because of it. As a result, millennials tend to be debt-averse and xennials are drowning in student loans.
Buying Homes or Avocado Toast?
How does this impact construction? Millennials and xennials just aren’t buying homes at the same pace as previous generations. In the last year, homeownership among people 35 years or younger dropped 18%. No, this drop wasn’t caused by millennials overspending on avocado toast. In fact, there’s quite a few financial issues preventing them from owning a home.
Xennials are strapped with large student loans, and that leaves little money left over to save for a down payment. Millennials, on the other hand, are conservative buyers and worry about being house poor. And, both groups are earning less money than previous generations. Add in soaring house prices, and young people aged 20-35 simply can’t afford to enter the market.
Despite economic barriers, millennials still want to buy homes. They haven’t given up on homeownership, they’re just waiting for the right time and right conditions. What millennials need are starter homes: homes that are smaller and less expensive. Because there is a limited supply of starter homes on the market right now, there are huge opportunities for home builders and construction companies to cash in on this demographic.
The problem is that new, lower priced homes come with reduced profit margins for builders. In order to compensate for this margin cut, construction companies need to find a way to sell a lot more starter homes. To encourage millennials to buy, John Burns explains that homebuilders need to adapt to shifting views about homeownership. Millennials tend to value time over money, and experiences over material goods. This means they want homes closer to where they work so they’ll have shorter commutes, and homes they can afford so there’s money left over in the budget for travel.
Rather than building only for speed and cost, homebuilders need to gather data on what customers are willing to pay for in a home, where demand for starter homes is high and how to build affordable homes for first-time buyers. Millennials will enter the housing market if a house meets their needs and fits their budgets.
A Tech-Savvy Workplace
Buying behavior isn’t the only way that millennials are impacting the construction industry. Their lack of interest in construction jobs has led to a wide-spread labour shortage across North America. There are many theories about the shortage, but the most popular one is that millennials just aren’t interested in construction work.
Millennials have grown up in a world saturated by technology, and for many, their core competencies are digital. When choosing careers, they stick with what they know, searching for technology-based work, not because they prefer it, but because they don’t know that other options exist. To get more young people to enter the industry will take education and proactive approaches to attracting millennial talent.
The combination of shifting values and increased access to technology has caused millennials to look for different things in their workplaces. They’ve grown up in a world that champions innovation and they’ve seen new technologies disrupt entire industries. They have a strong critical eye that questions tradition and they look for new ways to solve problems.
This mentality can be incredibly beneficial for construction companies, especially those focused on digital transformation. But it can be a challenge when it comes to hiring and attracting talent. The best way to recruit millennials is to show that your construction company is forward-thinking and innovative. To do that, construction firms need to embrace technology. Too many firms use outdated software or rely on paper – an alarm bell for those in their 20s and 30s. To millennials, outdated technology makes companies look old-fashioned.
When companies invest in powerful construction technologies, they become more attractive to younger employees and talent acquisition becomes much easier. Especially when that powerful technology is mobile. Millennials are never without their smart phones and many see the value and convenience of incorporating mobile tools into their workflow. But in construction, job sites have been slow to adopt mobile technology.
This is unfortunate, because not only does introducing mobile technology make your firm appear more technologically advanced, it will also increase productivity. With a smart phone, workers can snap pictures of problem areas and report issues quickly and easily. Mobile ERP apps also gives team members access to project data and dashboards with project progress.
In general, construction software shows prospective hires that your company cares about solving employee challenges and ensuring long-term job fulfillment. And mobile tools help to gamifiy the workday, motivating millennials and making them more fulfilled at work.
Original Article: https://cmicglobal.com/resources/how-millennials-are-impacting-the-construction-industry/