Why the Building Materials Industry Must Prioritize Succession Planning: Part One

Posted on December 17, 2024

Introduction

I was on the phone with a long-time friend and colleague headed to the NRLA Show this week. He said, “This is my 20th trip to that show, and man, the number of old guys like us keeps growing every year.” As an official “Old Guy” in the industry, I have become increasingly aware of our industry’s need to create succession plans. 2024 has proven to be the year where I have seen more retirements than ever before. At first, I thought I was noticing this because I am in the beginning stages of succession and retirement planning for myself. But over the last 11 months, I can definitively say that retirements have grown this year more than in any of my last 20 years as a recruiter in the building materials industry. This is part one of a three-part blog series.

Why Succession Planning Is Critical

The building materials industry’s success relies heavily on its workforce’s expertise and dedication. Yet, a concerning trend demands urgent attention—the aging of this valuable workforce. Did you know the median age of workers in the building materials industry is 42 years old? This figure is higher than the average across the national labor force and signals an impending challenge for businesses. With many employees nearing retirement, succession planning is no longer optional—it’s essential.

The Impact of an Aging Workforce

An aging workforce introduces significant risks for the building materials industry. With decades of acquired skills and knowledge, senior employees are a business’s most vital asset. But without proactive planning, this expertise could vanish as they retire, jeopardizing operations. Let’s break down the key risks:

1. Loss of Expertise Experienced professionals bring a depth of technical knowledge and problem-solving skills. Without a plan for transferring this expertise, businesses risk knowledge gaps that disrupt productivity and innovation.
2. Operational Disruptions Departures without prepared successors can create voids in leadership and efficiency, leaving organizations scrambling to recover.
3. Leadership Instability The sudden absence of key figures often disrupts long-term planning and strategic alignment, impairing future growth.

Time to Act

The aging workforce presents challenges that must be addressed sooner rather than later. Without taking action, companies face increasing vulnerabilities both in operations and competitiveness. Stay tuned for part two, where we’ll dive into actionable strategies for effective succession planning in the building materials industry.