A Sustainable Workforce Starts With You

A Business Case for Owners Supporting Craft Training

The following article is authored by the Co-Chairs of the National Construction Forum, Jim Porter, Chief Engineer and VP Engineering & Operations, DuPont (Retired); G. Edward Gibson, Jr., PhD, PE, Director, School of Sustainable Engineering and the Built Environment Arizona State University; Jimmy Slaughter, President, S & B Engineers and Constructors, Ltd. 

A skilled craft shortage currently exists that will impact the extensive planned industrial expansions along the Gulf Coast.

Why is it important to you as an owner?

  1. This shortage will impact cost, schedule and doability of your capital expansions.
  2. Even if you have no capital expansions planned, other planned capital expansions will draw people from your maintenance and small cap programs, as well as create significant wage rate increases.

There are two skilled craft shortage solutions:

  1. Long-term – We must break the paradigm that the only way to personal success is through a college degree. Skilled professions are extremely well paid today and have many pathways for advancement. A sustainable workforce must be developed by starting recruitment and information sharing in high school, middle school and grade school; providing education on options available and thus seeding future entrants into the workforce.
  2. Short-term – By the end of 2016 the need for skilled crafts is projected to increase by 50%. Since we will not be allowed to import labor from out of the country, we must create this increase from the UNDER-EMPLOYED in our community. According to the Greater Houston Partnership, the Houston area has 20% professional, 41% skilled and 39% unskilled. Our solution must come from attracting and training the unskilled. This will have the further benefit of improving the economic condition of many families.

The UNDER EMPLOYED include many competent people who, due to life circumstances, have not found their way to a “good job”. They include:

a. Returning military
b. Women (there are few women working as skilled craftspersons)
c. High school drop-outs
d. College drop-outs
e. People with college degrees who cannot find a job in their chosen professions, which is a common occurrence

What is the business case for short-term?

Training people close to your facilities has the benefit that they will be there when your project is over and not go back to some location outside your immediate area. This has a practical benefit, with locals being drawn into the industry to maintain and operate your facilities, as well as a civic benefit. You can train these people for less than it will cost to pay per diem for an outsider.

Calculations are as follows:

  1. Cost to train an individual to the minimum entry level of crafts basics is about $10,000.
  2. Per diem for an outsider is currently $70-85 per day worked, depending on location. Assuming 5-10’s (five day, ten hour work weeks) and $75/day per diem for a year, the cost for importing a working craftsman is $19,556. This results in a $9556 saving per worker. The breakeven is 6 months, and if the person works for 2 years the savings increase to $29,112 per worker!
  3. This business case does not even take into consideration schedule and productivity savings by having an experienced, skilled and readily available workforce.

How can owners support short-term training?

Owners need to make agreements with their contractors (through contract stipulations) on the percentage of locals to be trained and be willing to cover the cost of training.

How can owners support sustainable (long-term) workforce development?

  1. Owners need to make contractor’s training initiative a part of their contract award evaluation and negotiations.
  2. Contractor programs need to include work with high schools, secondary schools, junior colleges and personnel training programs to seed the future.