Asking Ashley Kuhn, president of Blair Freeman in Omaha, about diversity, equity and inclusion in the construction industry is like asking her for a retrospective of her career. For Kuhn, who with business partner Maranda Adams created the construction company, DEI is much more powerful than a company initiative. It’s been the foundation of their company since day one.
“We have been there,” Kuhn said. “We understand the barriers that we ran into as women-owned and as minority-owned, so we understand the stresses that our trade partners are under.”
Across America, the construction field is changing. Besieged by decades of shrinking numbers of trade workers and pressed on all sides to diversify, the industry is inviting more women and minorities to a seat at the table. According to the Occupational Safety and Health Administration, 43% of members in the National Institute of Building Sciences had some DEI program in place and local construction experts said there are noticeably more minorities and women in the local construction industry as well.
The changes are not only a matter of social and economic justice but also because research is showing that diversity pays dividends in the workplace. According to builtin.com, diverse companies achieve 2.5 times higher cash flow per employee, achieve higher revenue and result in work teams that are more engaged and make better business decisions.
Not to put too fine a point on things, but recent regulatory actions, including 2021’s Executive Order 13985 by President Joe Biden, demands more attention be paid to the level of DEI brought to the bidding process by would-be government contractors.
Industry experts say it isn’t that construction companies don’t recognize the tides shifting toward a more diverse workplace. The problem, they say, is change isn’t happening fast enough.
“The construction industry has become more inclusive in hiring and promoting women and minorities, however, there is still a sizable discrepancy for women and minorities,” said Kris Montgomery, Omaha market leader, McCarthy Building Companies, Inc. “Advancements are still needed to create opportunities and cultivate environments conducive to everyone succeeding without barriers.”
The U.S. Bureau of Labor Statistics reports the vast majority of individuals in the construction field are still white (87.3%) and male (89.1%). The Hispanic community has steadily made inroads into these jobs, representing 34.2% of the construction workforce, but growth among Black and Asian workers has been slower. In 2022, 7% of workers were Black and 2.1% were Asian.
Women have grown to occupy 11% of construction industry jobs, but a closer look at the breakdown of these positions shows something more nuanced. According to the National Association of Home Builders’ 2022 data, women made up less than 4% of trades and labor jobs and were underrepresented in leadership roles.
“It is rare to find companies now that do not have some form of diversity,” Kuhn said. “However, many are still failing to have women directly involved on jobs, rather stacking their marketing, accounting or sales departments with these roles.”
Kuhn also said there are market factors that help explain the slow pace of change that go beyond mere prejudice. She said working with some woman- and minority-owned businesses presents the same challenge as any other relatively new firm in the marketplace.
“Diverse trade partners are typically newer companies and do not have negotiated rates for supplies, material and equipment,” she said. “For instance, a 50-year-old paint company would have a history of purchasing volumes, likely owns their own lifts, supplies and equipment necessary to do the job, so they do not have the added burden of leasing. This difference leaves diverse trade partners at a disadvantage when in a competitive bid situation.
“Diverse trade partners also typically do not have as much back-office support as other firms due to overhead. Quite often the owner is both the labor on the project and the back-office support such as procurement, estimating, contracting, marketing, sales, billing and receivables. This burden allows them to spend less time on job sites, which means that their schedules for completion take longer.”
Having said that, industry figures agree that more can and should be done to help diversify the construction field at all levels.
“At JE Dunn, it’s a company-wide goal and commitment to build a diverse and inclusive workplace,” said Jason Studt, vice president of JE Dunn Omaha. “Our action plan includes three initiatives: workforce, workplace and marketplace. We strive to attract diverse, engaged talent; to take care and celebrate all aspects of diversity in our current talent pool; and to support small-emerging and minority and women-owned businesses throughout our community, which includes engaging diverse trade partners and providing resources for local companies that are looking for support.”
As proof of this commitment, Studt said 2023 was JE Dunn’s inaugural year for its Minority Contractor Development Program. The company interviewed and selected 10 minority-owned small construction-related businesses to participate in an eight-month training program that meets for eight hours per month on the finer points of running a successful construction business including leadership, human resources, marketing/business development, legal, financial, documentation, estimating/bidding and other topics.
“The purpose of this program is win-win,” Studt said. “We develop these companies into commercial builders that we can do business with and it benefits our city by creating generational wealth and jobs in underserved communities. This will be a reoccurring, yearly program that will continue into perpetuity. Our Kansas City office has been doing this program for 15-plus years and has seen a dramatic improvement in the quality of the minority contracting community.”
The company also launched two new employee resource groups, adding to its existing ERGs serving women and minorities, to strengthen relationships and to foster education, networking, professional development, mentoring and leadership opportunities.
“JE Dunn’s ERGs are designed to support our diverse employees and increase engagement, offering people an opportunity to make a lasting difference across the organization as they navigate their careers,” Studt said. “ERGs are voluntary, employee-initiated and employee-led groups aligned with the vision and guiding principles of the organization. In 2023, we launched the Hispanic ERG with the purpose to unite our Hispanic employee community and provide a space of support. In 2023, we also launched our Veterans ERG.”
Changing the Environment
Kuhn agreed that more needs to be done both internally and externally to help construction professionals and entrepreneurs grow in the kind of business acumen needed to qualify them for larger projects and professional advancement. She said business practices from established firms go a long way toward expanding these opportunities.
“The ability to scale from a one- or two-person shop to a large employer can be a tough jump, especially when the owner is both the back-office support and the physical labor in the field,” she said. “Access to the correct capital to allow this growth to be quicker and on a larger scale is necessary to scale, but often hard for diverse subcontractors and suppliers to get.
“Our office helps estimate, review estimates once they are in, put contingencies in our budgets to allow for mistakes on behalf of smaller diverse and growing companies. This trust in our partnerships creates a familial bond with our trade partners. Our jobs accomplish, on average, 82% diverse partners and although admittedly it is a burden on time, budget and oversight, the impact is tremendous.”
Montgomery said in addition to a range of internal DEI programs targeting employee education and subcontractor development, McCarthy Building Cos. has been aggressive in its commitment to developing the future workforce.
“McCarthy has long partnered with industry organizations, trade schools and high schools to introduce construction as a rewarding career option,” he said. “We often begin as early as elementary school to start the conversation.
“In 2020 McCarthy partnered with five of our industry peers to work together to advance diversity, equity and inclusion across the entire construction industry. In Omaha and Lincoln, McCarthy has applied innovative recruiting strategies, such as partnering with Prairie STEM to host Girls in STEAM community events, Metro Community College, ACE Mentors and outreach through our client, Omaha Public Schools. We have also implemented a project coordinator program to pair recent high school graduates from diverse backgrounds with a seasoned McCarthy project manager to work full-time on a local project while also attending college or trade school. After a year in the program, McCarthy provides a tuition waiver for their education and an opportunity to transition to a salaried position after graduation.”
Paying it Forward
The short-term goal of all of these efforts is to enrich the local industry and improve access for all, but the long-term implications are far more substantial as each small company nurtured today is inspired to do its part to continue to widen opportunities in the future. Daniel Felder, CEO of Axiom Construction Group, who has been mentored through JE Dunn’s programs, is a prime example of this pay-it-forward mentality.
“This industry has its own ecosystem,” he said. “It takes businesses at all levels, large and small, to maintain vibrancy and a healthy balance. We are seeing a shift due in part to progressive policies and the will of business owners to see change happen in our industry. One example we have personally experienced at Axiom is the mentor-protegee program certified through our local government.
“In an effort to not just give us a contract but teach us how to grow a generational company, JE Dunn has opened its doors to us, allowing us to walk side by side with all levels of professionals in their organization and supporting our efforts of being a mentor to other diverse firms by sharing best practices that we have learned and implemented. That is a full circle organic approach to healing our ecosystem.”