Sasha Reed and Kris Lengieza introduce The Power of Construction podcast, highlighting industry leaders who are evolving their business today to forge a better future tomorrow. Together representing over 40 years of experience in construction and technology, they aim to sit down with the best and brightest minds in construction to explore how leaders overcome their greatest challenges while achieving operational effectiveness and becoming better stewards of their people and resources.

Construction contributes about 13% of global GDP, yet while other industries have made leaps in productivity, construction continues to lag behind. In the U.S. alone, this productivity gap costs the economy about $2.8 trillion each year. Despite projected global construction spending increases from $13 trillion in 2013 to $22 trillion in 2040, the industry's productivity has stagnated and even declined in recent years. The challenge isn't that construction is incapable of building faster and better—it's that we haven't yet achieved this potential.

Peter Tateishi is CEO of AGC of California, one of the largest chapters of the Associated General Contractors of America. Since joining in 2018, Peter has transformed the association into a mission-based organization working to create opportunities to build and strengthen the state by shaping policy, improving industry relationships, and developing the construction workforce. He was recognized as Most Admired CEO in 2023.

Josh Bone is Executive Director at ELECTRI International, a nonprofit that executes research projects aimed at transforming the electrical construction industry. The research is converted into educational content, consulting programs, and practical publications to help electrical contractors uplevel their business and tackle current challenges. Josh has worked on hundreds of projects throughout his career, building expertise around Virtual Design and Construction (VDC) processes.

For over two decades, contractors across the country have identified the workforce shortage, especially in skilled and craft labor forces, as their number one concern. AGC of California has launched Build California, a program focused on telling the construction story differently and helping the next generation, especially Gen Z, see pathways and careers in construction. Rather than doing training directly, they focus on top-of-funnel recruitment, getting people excited about construction careers while also addressing retention and culture within the construction workforce.

ELECTRI International serves as the tip of the spear for the electrical construction industry—an applied think tank and research and development entity helping contractors stay ahead of digital transformation, industrialization, and electrification. As a 501(c)(3), they offer 355 years of research through their website, covering standard operating procedures, key performance indicators, and other critical resources. They're currently developing a new-collar apprenticeship program for project management, giving high school graduates opportunities to work in contractor offices.

The productivity gap stems from multiple converging factors:

Aging Workforce: In California, the average craft worker is aged between 45-47, which isn't sustainable long-term. The industry isn't replenishing this workforce at levels needed to replace daily retirements.

Skills Gap: There's a missing middle layer of workers with 7-15 years of experience, creating a significant gap between entry-level workers and those with 15-20 years of experience.

Project Complexity: Modern projects are far more complex than 25 years ago. Hospitals that once had core and shell costs exceeding MEP systems now see the reverse, with systems costs dominating.

Statistical Reality: Only 5% of projects complete on schedule, 30% complete on budget, and roughly 10% hit both schedule and budget targets. In 2022, $97 billion in costs were absorbed by subcontractors, with $40 billion lost to productivity impacts.

The cost of inexperience creates a multiplier effect across the industry. Today's complex projects often have 26-year-old coordinators managing MEP coordination, placed in positions where they're not set up for success. This inexperience impacts every level and silo within project teams. The industry needs to be more intentional about knowledge sharing, building better contracts with trust, using data for transparency, and being realistic about scheduling constraints. Many projects operate with unrealistic schedules that don't account for the learning curve of developing talent.

The Construction Labor Market Analyzer (CLMA) released research showing that the industry will lose almost 60% of the existing craft workforce over the next 11 years, with a quarter of that loss occurring by the end of 2024. This mathematical reality—five tradespeople retiring for every two entering the field over the past decade—creates an existential threat to critical industries. The gap between sending students to college versus trades has created a divide that must be addressed strategically through prefabrication, off-site construction, and manufacturing mentalities.

Unrealistic schedules prevent proper training and mentorship. When owners compress timelines—such as reducing work from 6-10s to 5-10s without changing the end date—contractors can't afford to bring on apprentices who learn on the job and naturally work slower initially. This creates a vicious cycle where the industry can't develop the next generation of skilled workers because there's no time for training. Owners must understand that supporting workforce development on current projects directly benefits future project success and productivity.

The superintendent role is critically important to job success, schedule management, and overall site coordination, yet few people are looking toward this career path. The industry lacks the time and ability to mentor the next generation of superintendents due to schedule pressures. General contractors struggle to find experienced individuals who want to pursue superintendent roles, creating a significant gap in project leadership capabilities. The industry needs reprieve from owners to allow experience development and proper mentorship programs.

The aging workforce brings physical and emotional challenges, with many workers being asked to stay longer than originally promised when they started their careers. Traditional construction retirement expectations around age 55-60 have shifted toward working until 67-70, similar to other industries. This extends beyond the original promise made to workers about career longevity. Some contractors are asking retired workers to return as highly paid consultants because there's no pipeline to promote from within, creating additional cost pressures and margin impacts.

While some contractors are making efforts to advance and retrain experienced workers, the industry's resistance to change often leads to maintaining status quo approaches rather than leveraging experience for innovation. Some progressive contractors recognize opportunities to use experienced workers' wisdom to learn and change business practices, but this isn't as widespread as needed. The industry needs to balance maintaining valuable experience while embracing necessary changes and innovations.

The industry must embrace prefabrication, off-site construction, and manufacturing mentalities to address workforce shortages. This requires strategic thinking about when to buy prefab versus build on-site, joint ventures, and specialization. Contractors need to be more strategic about breaking down jobs and managing risk, including decisions about temporary power, subcontracting, and prefabrication. The convergence of design and construction thinking about means and methods becomes critical for future success.

Traditional hard-bid dynamics create a race to the bottom that disincentivizes innovation and change. Low-bid-wins approaches mean contractors making investments in improvements may lose projects to those maintaining status quo practices. This system perpetuates a risk mitigation push-down through the entire supply chain, ultimately asking why workers at the bottom should continue in the industry. The lack of collaborative delivery methods particularly impacts small and underrepresented businesses who can't manage or access high-risk projects, limiting industry diversity and growth.

The commoditization of construction work creates systemic problems affecting worker welfare. Most craft workers operate on a "show up, get paid; don't show up, don't get paid" basis without paid sick leave. When workers suffer minor injuries, they often can't afford medical time off, leading to self-medication. This contributes to construction having nearly one in four opioid overdose deaths across all industries—23% of all opioid overdose deaths. The inability to bid sick leave and worker benefits into projects because of low-bid competition perpetuates these dangerous cycles.

Integrated Project Delivery (IPD) showed promise, with positive feedback from everyone who worked on IPD projects, but owners didn't feel they had enough control or were getting the best price. This led to reduced IPD adoption, though some progressive owners are returning to Target Value Delivery and collaborative planning methods. The industry needs better contracts that reflect shared benefits rather than commoditizing the process. Current contract terms like "pay if paid," liquidated damages, and unlimited liability create animosity and protectionist behavior rather than collaboration.

AGC of California focuses on building stronger relationships with owners, especially public owners, to help educate them about being part of the solution beyond just providing budgets and schedules. They're working to help owners recognize construction as a people business rather than a commodity, supporting workers who want growth, challenge, and the ability to provide for their families.

ELECTRI International conducts best practice research and education, converting research beyond white papers into actionable curriculum and tools contractors can operationalize. They're researching productivity, claims management, lean delivery methods, and working with the Project Production Institute on operations science applications.

The future could go two directions: either the industry works together with transparency, better contracts, and proper job delivery, or it moves toward manufacturing consolidation with modular delivery and owner-furnished, contractor-installed systems. The preferred future involves seeing construction professionals as consultants rather than commodities, bringing knowledge and value to projects. This requires thinking more like businesses, embracing technology, and making data-driven decisions that increase profitability while reducing risk exposure.

Book Recommendations:

• Josh: The Hard Hat and Breath (audiobook)
• Peter: Outward Mindset series for challenging assumptions

Information Sources:

• Josh: Personal blog and Google Alerts for "artificial intelligence in construction"
• Peter: National peer groups and executive leadership team information sharing

Advice to Younger Self:

• Peter: "Know your worth"
• Josh: "Believe in yourself" and understand that impostor syndrome is real and natural

Future-Shaping Trends:

• Josh: The three -ations: digitalization, industrialization, electrification
• Peter: Data and AI feeding into efficiency improvements

Industry Taglines:

• Peter: "Industry One" - construction as the foundation of all other economies
• Josh: "The American Dream is still alive and well in the construction industry"

The conversation concludes with recognition that the industry must capture knowledge before massive retirements, rethink the value of construction workers, and leverage technology to meet next-generation expectations. Gen Z workers expect employers who provide necessary technology to do jobs better—70% would leave for employers offering better technological resources. The industry has an opportunity to be seen as helping workers make greater impact rather than resisting change. Success requires intentional productivity management, daily work planning, and measuring what needs to be managed. The industry's future depends on recognizing construction as Industry One—the foundation upon which every other economy is built.