The Intersection of Inclusion, Diversity, and Risk Management in the Construction Industry

• Author: By Lance Currie, Amy Iannone, and Claudia Mandato
• Pages: 23-33

THE CONSTRUCTION LAWYER 23Winter 2021

Published in The Construction Lawyer, Volume 41, Number 1, Winter 2021. © 2021 American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof

may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

AN EMERGING AWARENESS

The Intersection of Inclusion,

Diversity, and Risk Management

in the Construction Industry

By Lance Currie, Amy Iannone, and Claudia Mandato

Many construction companies

are embracing the need for a

vibrant and diverse workforce,

making strong efforts to build

diverse and inclusive cultures.

Study after study shows prot-

ability and ingenuity are directly

tied to inclusivity and diversity,

as diverse peoples spark innova-

tive ideas. Beyond the benets,

companies also recognize the

risks involved in failing to create

a healthy, diverse, and inclusive

culture. Indeed, limited work-

force diversity has been named

a “top 20” risk facing the con-

struction industry.1 This article

addresses many aspects of the

intersection of inclusion, diver-

sity, and risk management, with

a goal of shedding light on why

so many companies and busi-

ness groups recognize how

critically important it is to

improve inclusion and diver-

sity throughout the construction

industry.

State of Diversity and Inclusion in

the Construction Industry

The construction industry, like many others, has seen

some improvements in the diversity of its workforce, but

there is signicant room to grow. Women make up 51%

of the U.S. population and 52% of the workforce,

2

yet

only 9.9% of the workers in the construction industry

were women in 2018.3 This number is up, however, from

9.1% in 2017.

4

Race has also seen incremental change,

with approximately 57.7% of the construction industry

identifying as non-Latino whites in 2018, down from 59%

in 2017.5

Leadership in the construction industry still appears

to consist primarily of white men. Of construction man-

agers as dened by the Bureau of Labor Statistics, 91.8%

identied as white and only 7.7% were women in 2018.6

Note that those who identify as white includes many

Latinos, with 89% of Latinos in the workforce identify-

ing themselves as white.

7

Nevertheless, those who identify

as Latino made up only 15.3% of construction managers

and 23% of construction supervisors, despite constituting

30.7% of the overall construction industry. In contrast,

Latinos made up 47.6% of construction laborers.

But while the construction industry is lagging in

some areas, trends point toward a more diverse future.

According to a report issued in 2018 by the Diversity &

Inclusion Council of the Associated General Contractors

of America (AGC), it was projected that by 2020 more

than 50% of businesses entering the construction indus-

try will be minority or female owned.8 Efforts across the

industry are working to drive change. AGC’s Diversity

& Inclusion Council provides leadership development

and career advancement opportunities, as well as busi-

ness development through education and networking.

9

Many construction companies have initiated diversity

and inclusion efforts. But much more progress is needed.

Risks Aliated with Lack of Diverse Workforce

Opportunity Risks

Having a comprehensive diversity and inclusion pro-

gram is not only a sound business and legal strategy for

a construction industry employer, it is sound risk man-

agement. Workforce management and talent optimization

has been identied as one of the leading risk management

challenges that the construction industry will face over

the next 10 years.

10

Understanding and implementing

appropriate diversity and inclusion strategies will help

companies attract and retain top talent.

Over the past decade, the construction industry has

been struggling to recover from a downturn in the econ-

omy that left the industry without a sufcient number

of qualied workers to handle the volume of construc-

tion that is being performed across the country today.

11

When millions of workers were laid off in the economic

downturn starting in 2006, many of them did not return

to the industry.12 Contractors, design professionals,

and construction owners have since been strategizing

on how to best attract, train, and retain talent in their

rms. At the same time, “[t]he construction industry is

not viewed as an attractive employer,” in part because of

a “lack of diversity in the workforce.”13 Thus, creating a

diverse and inclusive work environment is a big piece of

Lance Cur rie

Amy Iannone

Claudia Mandato