• Generic selectors
    Exact matches only
    Search in title
    Search in content
    Search in posts
    Search in pages
    FMI Quarterly
    Special Reports
    Industry Outlooks
    News
×
  • I'm here to...
  • Services
  • About Us
  • Generic selectors
    Exact matches only
    Search in title
    Search in content
    Search in posts
    Search in pages
    FMI Quarterly
    Special Reports
    Industry Outlooks
    News
  • Generic selectors
    Exact matches only
    Search in title
    Search in content
    Search in posts
    Search in pages
    FMI Quarterly
    Special Reports
    Industry Outlooks
    News
×
  • I'm here to...
  • Services
  • About Us
  • Generic selectors
    Exact matches only
    Search in title
    Search in content
    Search in posts
    Search in pages
    FMI Quarterly
    Special Reports
    Industry Outlooks
    News
FMI Quarterly/March 2015/March 1, 2015

Take One: It’s Opening Night and Seats Are Available

MovieSeat_imageThe jobs are here, but the workers are not. It’s time to act.

Let us set the stage. There has always been a symbiotic relationship between the U.S. economy and the U.S. construction industry. As the economy goes, so goes the construction industry and vice versa. Indicators tell us that the economy is rebounding. This is good news, but there is reason for concern. Historically, the construction industry created jobs and people chose to do them. When this was true, young people could choose construction instead of college and make a good living doing it. For some, a career in construction may have been a second choice; however, college was not an entitlement for everyone. Vocational and technical programs were still available to high school students. Unions and trade schools were able to maintain the balance between labor supply and construction demand. This is not the case today. Times have changed and fewer young people are choosing construction as a profession. High schools are preparing our kids for college, not for work. One troubling indicator is that student loan debt is now second only to mortgage debt. Just Google “student loan debt crisis” and see what comes up.

In 2014 our rebounding economy is exposing a broadening concern — the gap between the number of skilled craft workers is no longer equal to or greater than the number of skilled tradesmen we have available. On the contrary, for the first time in recent history, we do not have enough skilled workers to grow the industry. The economy may be rebounding along with the construction industry, but it will not be sustainable if we cannot build a larger workforce. The jobs are here, but the workers are not. We need to address this gap. As the construction industry goes, so goes the economy. It is time to act.

What Can I Do?

It’s time for acting class. First, let’s work on our line, “What can I do?” Actors train to deliver lines in order to elicit responses from their audiences. They make adjustments to tone and pace, so that the phrase has the intended meaning. With that in mind, how do you read this “line,” the question, “What can I do?”

One way to express this line would be to emphasize the “I,” isolated and alone. The emotion behind this delivery is that there is too much to do, and no single person (or company) can possibly make a difference. There is helplessness in this expression. What can I do? If you read it this way, you are portraying a victim who is paralyzed by the enormity of the issue.

Another way to present this line, the question, is to infuse a sense of associated urgency and imperative. It sounds almost as a plea, resulting from a lack of ideas or first steps and, in general, just not knowing what to do. What can I do? Read this way, you are asking for some input. If you only had a few ideas to act on, then you could be more effective.

A third way comes from a position of strength, with a desire to help, like a good sister-in-law at a family gathering, looking for ways to assist with the preparation of a large meal. In effect, she came qualified and ready to help you and is asking you to tell her which specific task she should take on. What can I do? If you read your line this way, you are saying, “Give me something to work on and I will make it happen.”

All three of these interpretations are concurrently real. As our “play” unfolds and as our economy and industry grow, we should discover that the third interpretation offers the most impact. Let us continue to practice our line, “What can I do?” Now, let us talk about how to act.

How to Act

Now that we have our line down, it’s time for some “blocking and staging.” How should you (and your company) position yourself so that you can fulfill the role we need you to play? FMI has done a number of research surveys over the years, and the results have provided some valuable guidance. Other agencies and associations have worked to provide solutions and assistance. Together, we have provided that “sister-in-law” support for many of you, and we remain at the ready to continue in that role as we face this challenge together. To that end, the research on the trade/craft labor shortage is compelling. The obvious findings reveal an increased demand for craft labor in various regions and trades across the country with shorter supply. As a result, wages are going up, and poaching from other industries (specifically oil and gas) is in full swing. We have not seen a lot of project delays, but the industry is telling us that it expects them.

Simply tuning up your pre-job planning and project execution capabilities is an important first step to deferring the pain your company may feel when labor becomes scarce in your future. In addition, there are a number of other ideas for addressing the labor gap. Many of these ideas are not new, and most of you have already heard about them, but implementation is the key. Doing something is the hard part. Just learning your line is not enough, you have to act it out. What actions are companies taking to defer the impact of the impending labor gap? Since we are still in “acting class,” the following list offers some suggestions for “action!”

Dedicate someone to the craft side of your business (recruiting, hiring, training, retaining). Treat craft workers like all of the other professionals working for your company.

Hire them and then retain them. The hiring cycle is expensive and time-consuming. Keeping people is less of a drain on your company’s resources, especially Human Resources. Plus, the statistics show that new hires are less safe. Develop a strong retention initiative for craft workers. It will reduce cost and risk. Here are some ideas for how to increase employee retention.

  • Provide training and development opportunities.
  • Be strategic about your “onboarding” process. Engage employees early in the process.
  • Create clear career path opportunities.

Pay more and offer more — not just a higher hourly wage, but perhaps a per diem or a housing allowance; satellite parking, including a work shuttle; mortgage assistance; or financial planning services. Attach vesting timelines to some of the benefits you offer such as 401k, tuition reimbursement or dental coverage. Make leaving your company a difficult decision for your craft labor resources.

Build your own technical talent pool, just in time or on the job. If you need welders, dedicate someone on the job to train welders for the specific job; consider that you already do this for safety with a “site-specific” safety plan and a safety manager on the job; do the same for a craft or trade skill.

Get potential employees started early. Reach down to the high schools and “pay” kids to stay in school as you teach them how to build real things (science, technology, engineering, math and psychology in action). Partner with the middle and high schools to bring support for STEM (science, technology, engineering and math) careers with jobs and internships.

Being the employer of choice is a key driver for attraction and retention. Here are some ideas you could implement to become an employer of choice:

  • Provide structure and process.
  • Provide leadership and guidance; mentor and coach more.
  • Encourage self-assuredness, a “can-do” attitude, positive personal self-image and corporate image.
  • Take advantage of and foster a greater comfort level with teams.
  • Listen to your millennial employees; invite them to “sit at the adult table” to listen and learn.
  • Challenge your employees to define and manage purposeful and meaningful change.
  • Most of your newer employees are multitaskers on a scale you have never seen before. Take advantage of their computer, cell phone and electronic literacy.
  • Capitalize on the social networking affinity in and outside of your company; make your website “fresh” and interesting.
  • Provide a life-balanced workplace.
  • Provide a fun, employee-centered workplace.

Acting class is almost over. You have your lines, and the stage is set for you to act. So, the new question is, “what will you do?” Most companies have the same information you do by now, but the differentiator will be how effective you are at implementing these ideas. If you do it well, you will protect your company. When you continue to see results, you become a leader in the industry. When you lead the industry, you help grow the labor pool for the rest of the industry. As the construction industry goes, so goes the economy. We cannot succeed without you. Q

Andy Patron is a principal with FMI Corporation. He can be reached at 919.785.9239 or via email at apatron@fminet.com.

 

Did you enjoy this article? Subscribe here for more FMI content.

Want to know more?