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FMI Quarterly/September 2014/September 1, 2014

Honing Your Workforce Development Plan

businesscharacters52_interview_imageFMI Quarterly Interview with Tim Johnson, president of TJC Consulting in Baton Rouge, La.: There is a massive effort underway in the state to recruit and train the next generation of construction craft professionals.

Workforce development is a topic that is on the mind of many contractors across the nation as they look to their benches and find dwindling numbers of skilled laborers to actually put work in place. The question continually heard is, “Where are these workers coming from?” With most high school graduates looking to attend institutions of higher ed and then move into professional positions, skilled labor is being overlooked and passed on by many job seekers today. This is especially true in Louisiana, where the oil and gas industry has created a boom of growth.

So what is the industry going to do? That’s a question Tim Johnson, president of TJC Consulting in Baton Rouge, La., has been answering over the course of his professional career. Johnson has been working in the construction and petrochemical industry for 24 years. During that time he worked for the Shaw Group, was executive director of ABC Baton Rouge, and is now founder and president of TJC Consulting. Johnson is on the Louisiana Workforce Commission whose goal is to find, train and staff the benches for companies building new facilities in Louisiana.

In this interview, Johnson provides valuable insights into the fine points of workforce development:

Scott Moyer: Tim, thank you so much for taking the time to speak with me today. Louisiana is going through an interesting time with extremely high volumes of construction work popping up all over the state. With your construction background and your current work as a consultant and member of the Louisiana Workforce Commission, you are uniquely poised to provide great perspective on the job situation. Can you share with us what is going on to recruit and train workers for the state?

Tim Johnson: Yes, I will tell you that obviously there is a massive effort underway in the state to recruit and train the next generation of construction craft professionals. We’ve got a baseline of about 100,000 craft workers in Louisiana. Based on the amount of economic development that’s already been announced, which is (depending on what you read) somewhere between $60 billion and $80 billion worth of work that could take place here over the next three to five years, the state believes it will need an additional 35,000 full-time equivalents in terms of construction craft professionals.

If you factor in normal attrition rates, and you try to make them full-time equivalents, the state thinks we may need to recruit and train as many as 80,000 people over the course of the next five years. So there is a real comprehensive, coordinated effort going on among the governor, his administration, the Louisiana economic development, the Louisiana Workforce Commission, the contractor community in Louisiana, the owner community in Louisiana and the Louisiana community and technical college system. So it’s really divided into four different subcommittees — training and development, high school outreach, retention and recruitment.

There is a group working on the training part of it, and that involves the Louisiana community and technical college system. It involves the ABC chapters and their training centers. It involves organized labor, their apprenticeship programs and really a lot of coordination from a training perspective. That’s one subcommittee.

There’s another subcommittee on what’s called high school outreach. They’re going into the high schools and bringing career training. Students are more job-ready when they come out of high school in terms of the construction industry. On that note, the state Department of Education is an accredited training sponsor of the National Center for Construction Education and Research (NCCER). In other words, if juniors and seniors in high school are taking NCCER pipefitting, welding or electrical courses, they’re actually getting credit toward high school graduation for those classes. So a lot of effort is going into having more of those classes taught and upgrading the quality of those classes.

There is another group that I’m involved with and chairing; that is the retention subcommittee. We’re looking at these attrition rates and saying if we need 35,000 full-time equivalents and we think we’re going to have to recruit 80,000, is there a way we can do some things from a retention standpoint and a best practice standpoint to try to reduce the attrition rates so that we don’t have to recruit and train so many people?

And then the fourth subcommittee is just basic recruitment. The state has adopted the NCCER’s Build Your Future campaign, all of its materials and its website. Louisiana is the first state where NCCER has gone in and customized its Build Your Future program for a state. We’ve got our own domain on the Build Your Future website. And there’s a program that’s been developed called Build Your Future, Build Louisiana.

This whole statewide coordinated effort is broken down into training, into high schools, into recruitment and into retention.

Moyer: So you have four main areas that you are focusing on. With the first focus of getting new entrants into the workforce and needing a number like 80,000, about how many do you think are coming from the state or Gulf Coast, and how many are you hoping to bring into the area?

Johnson: Let’s think about it in terms of the 35,000 full-time equivalents. We know that some percentage of those will be people we bring in from outside of the state, including Texas, Alabama, Mississippi and other states. But we hope that a significant number of the 35,000 are young people or midcareer adults, (returning military is a critical part of the recruitment piece of this), so that we can provide a significant number of these opportunities to Louisiana residents. We know we’re going to have to bring some in, but we’re hoping that, for the most part, we can get most of these individuals from Louisiana.

Moyer: And with such a high number of people who are entering the market, obviously that creates a demand for managers. Is there anything that the state or that your committees are doing to help train or build future leaders?

Johnson: There is no question about that. That is a big topic of discussion. Let’s back up before we talk about the leadership, because one of the things we’re also focused on is what we can do in terms of the skill upgrades, skill improvements, skill gap training for the existing construction workforce in Louisiana — the existing construction craft professionals. We believe that if we can put some skill upgrade training in place and improve the numbers of certifications that these individuals have, that you could see as much as a 10% improvement in productivity among the existing craft workforce.

And here’s what we know about that group. We don’t have to spend a dime to recruit them. We don’t have to put them back through full training programs. These are existing craft professionals, people who have already chosen to be in the field and who have already chosen to be trained and have significant skill levels. So we think that doing some upgrade training on the 100,000 who already exist can solve a significant part of our 35,000-person problem or issue.

Moyer: I’m glad that you brought that up. Who would be in charge, or who is going to do the training for these workers who are currently already working in the state?

Johnson: Well, it will be a combination. The training will be done by the same groups of training providers who will train the entry-level people. The Louisiana community and technical college system will be heavily engaged. The two or three major ABC training centers will be heavily involved in the skill upgrade training. I know that the organized labor will be doing some skill upgrade training as well. So that skill upgrade training will be very similar in terms of delivery to what we see with the entry-level group.

Moyer: Is there any encouragement to companies to put people through that or tax breaks or anything else to encourage companies to get their employees into this training?

Johnson: There is an existing tax credit in the state of Louisiana that says if you can get an individual through a union apprenticeship program or through the first year of a union apprenticeship program or through a couple of levels of the NCCER curriculum that the contractors can access a tax credit that exists for those individuals. So there is some incentive for that. The real incentive that exists is that these individual construction companies recognize clearly that the more well-trained their existing workforce is, the more productive they’re going to be and the more competitive they’re going to be in the marketplace. So the real incentive is the economic incentive that the individual companies have.

Moyer: And I imagine that part of the initiative is just getting the message out there and doing some marketing to allow companies to know that there is training for their employees to take part in.

Johnson: Yes, and a lot of that’s taking place. I’ve said this often as I’ve traveled around the country and talked about workforce development in terms of construction craft professionals — the entire United States has a deficit. We’ve seen numbers that have come from FMI, from others and from the NCCER that say the skilled construction craft professional gap in the United States could be as many as 1.5 million workers.

So it’s an issue everywhere you go. And it’s going to be particularly acute along the Gulf Coast. But if there is any U.S. state that is well-positioned to address this issue in a coordinated way, it’s the state of Louisiana because of the way that the owners’ groups work with the contractors — how the state Department of Economic Development, the Louisiana Workforce Commission, and the Louisiana community and technical college system all work with those entities. Much coordination and communication exists between the public and private institutions, and everybody’s moving in one direction. There is not a whole lot of disjointedness in terms of addressing these issues in the state. We’re pretty well-aligned and coordinated, and I think you’re going to see it make a difference in how we address these shortages going forward.

Moyer: Absolutely, and I think that with the perfect storm of the aging workforce and with the number of future employees needed to handle this $60 billion to $80 billion worth of growth, it is truly important for the state to have these programs available so that they can attract big companies that are wanting to bring in the business to the area.

Johnson: You’re exactly right, because the first question that any company deploying capital in the state of Louisiana will ask is, “Can I get it built?” This question comes up even before it can find a workforce to operate it. The next questions are, Can I get it built on time? Can I get it built safely? Can I get it built within my budget? And that is really a function of having a skilled construction craft professional workforce. And that’s why Louisiana’s so focused on it. It is a factor, a major factor, in economic development.

Moyer: I am interested in the leadership portion of it. What are some of the things you are doing with that?

Johnson: That’s a continuing issue that hasn’t received as much attention as the recruiting and training of the construction craft professionals. I will tell you that there’s a lot of really good, homegrown, local construction company talent in Louisiana. If you think about Turner Industries, the former Shaw Group/CB&I, Performance Contractors, EXCEL, ISC, MMR and about companies like that in the industrial sector, these are homegrown Louisiana companies. And because these companies have all been so engaged with the Associated Builders & Contractors training centers over the years, they all put training and development, workforce development, at a very high level. They are all very heavily engaged in it.

They all realize clearly that development of their leadership is critical too. And so that part of it, I think, is just beginning to get some traction in terms of the level of discussion that we’re hearing about it. How are we going to address it? Is it enough for the individual companies to say, “Hey we got this; we’re doing it internally.” Because that, quite frankly, is what some companies will tell you. I’ll train my craftspeople in conjunction with other companies who are competitors. But when it comes to my leadership, that’s part of my competitive advantage. I train those guys myself. They do a lot of their leadership training internally. It’s just something that’s beginning to be talked about more.

Moyer: A number of the companies that FMI encounters tend to have a “trial by fire” or “sink or swim” mentality where they promote somebody and then attempt leadership training. Do you have a best time or a recommendation for companies that are thinking about growth and/or succession and when they should start investing in this?

Johnson: Well, you’re absolutely right. The standard model involves taking our best and most productive pipefitter and making him or her into a foreman. And what happens is that you’ve lost your most productive pipefitter and oftentimes you’ve got a pretty crappy foreman, because we never trained these people in leadership, communication, problem-solving, report writing, planning and scheduling, and other critical factors that make them good foremen or good superintendents.

I was just in a presentation yesterday where Lee Jenkins of Performance Contractors was addressing that subject in terms of the company’s internal training programs. It is working hard to recognize that it has do that differently; it can’t wait until we say, “Alright he’s our best pipefitter, so let’s make him our foreman. Let’s cross our fingers and hope that he can do the job, and then we’ll give him some training once we’ve already promoted him.” I think there is beginning to be a recognition that we’ve got to identify these people earlier. We’ve got to identify them while they’re still on their tools, and we’ve got to start to train them in some of these leadership skills and let that be part of the evaluation that determines whether they are foreman or forewoman material before we actually make that promotion.

Moyer: So there is beginning to be recognition that there needs to be leadership development. Then it’s a process of identifying people, training those people and then promoting based on what they see after the training occurs.

Johnson: Yes. And in fact, here’s what I think the best practice is. Let’s say you’ve got a group of 25 pipefitters. You can identify six or eight of those guys that have potential leadership. And it’s not just because they’re the most productive person on the tools, right? There’s an identification that this group is productive on their tools, but they’re also good communicators and they seem to have some innate leadership ability. Let’s identify those guys. Let’s put them in some sort of training program while they’re still on their tools, and then let’s take the best two or three from that group. When we have to promote to foreman or to leadership, we’ve already gotten some skills and gotten some training in them that will help them succeed once they’re promoted.

Now for those four or five others who don’t get promoted at that point, the leadership training that we’ve given them still helps them be more productive in their day-to-day work. And eventually they may be able to get there, so that training is never wasted. But we need to start doing it before we promote individuals and not waiting until after we’ve promoted them and then recognizing they don’t communicate very well. It’s really too late at that point.

Moyer: Absolutely. And I think that’s something that definitely has to be addressed as companies are looking at growth and succession. Because you certainly need new people to come in, but then you have to have people that manage them properly; otherwise, you’re more or less throwing money away.

Johnson: That’s right. And I think some of the things that you guys do from a leadership standpoint at FMI could be critically important to a lot of these companies. Because, let me tell you, as growth takes place here, that leadership aspect — that foreman, that superintendent, that project manager level — is going to be critically important, and we’d better pay attention to it.

Conclusion

The state of Louisiana has recognized that if it doesn’t step in and change the way it is developing students, then it will miss out on companies that can bring jobs to the area. This cycle starts with the first phase of construction. If you can’t build it, they won’t come. Therefore, creative measures have been taken to get high school graduates job-ready, a perspective that many other states are turning away from as they cut vocational programs.

High school outreach is only one step. Training, retention and recruitment are important steps to ensure that firms get quality employees and keep them here in the state. With a powerful campaign to “build” great workers, it will be hard for owners not to think Louisiana as they build their next projects.

As you look at your bench and wonder where your next employee is coming from, it may be time to call your local government officials to see what they are doing to develop the next generation of craftworkers.


Scott Moyer is an educational services consultant with FMI Corporation. He can be reached at 919.785.9350 or via email at smoyer@fminet.com.

 

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