By Jeffry Scott
Would it be an exaggeration to say the future of the construction industry in Alabama rides on the success of the Craft Training Act, which began this month to fulfill its mission of training thousands of state workers in the construction trades?
Well, that depends, say experts, on whether you want the industry – and the economy of Alabama to which it contributes so much -- to merely survive, or thrive.
Without the CTA, non-residential contractors in Alabama won’t have the skilled manpower to finish jobs or make winning bids. Without the CTA, the state’s recovery from the Great Recession of 2009 will lose headway.
Without the CTA, Alabama contractors may know all too well the answer to the question raised in the 2015 Wall Street Journal headline: “Where Did All the Construction Workers Go?” But what they won’t know is how to fix the problem – and, what they won’t have, is a system in place to do it.
It took a decade for the construction industry to reach this point.
From 2006 to 2014, more than two million construction workers lost their jobs in the U.S. The construction economy began slowly rebounding in 2010, but construction workers, especially skilled construction workers, had by then moved on to other things, into other careers, or simply retired.
A 2014 study by the Associated General Contractors of America found the problem wasn’t going away on its own. According to the study another 1.1 million workers will retire over the next decade at a time when training programs that once kept the construction pipeline filled with the next generation’s workforce are either gone, curtailed, or underfunded.
Federal funding, once the bedrock of technical education, has “largely shifted to promoting college-preparatory programs,” reported the AGC.
“During the past eight years alone, federal funding for career and technical education has declined from $1.3 billion a year to a 2014 level of just $1.12 billion. That is a 29 percent decline after taking inflation into account.”
In 2015, The Alabama AGC stepped to the forefront nationally in dealing with the skilled labor shortage. It wrote the Alabama AGC Craft Training Act that was passed by the legislature and signed into law by Gov. Robert Bentley.
The act will create a long-term, statewide, stable funding source -- $3 million to $5 million annually -- for flexible skills training to help meet the industry’s growing workforce needs. The program is administered by the Construction Division of the Finance Department and is paid for without government funds, by increasing fees on building permits by $1 per $1,000 of project value.
The Act created the Craft Training Board, a seven-member industry board of contractors, to oversee the money and provide grants for training providers throughout the state using existing community college facilities and other qualified trainers. Skills training will be made available to entry-level workers as well as current employees of contractors. Fee collections began in October, with a schedule to have the program funded and running by mid-2017.
AGC Chief Operating Officer Bill Caton said the CTA is the second step in an overall industry workforce plan that includes the Alabama Construction Recruitment Institute, which operates “Go Build,” the industry’s image and recruitment campaign. The CTA will be “transformational” for an industry facing a dire shortage of skilled labor, Caton said.
“It provides for skills education while leaving in place the image enhancement and recruiting mission of the Alabama Construction Recruitment Institute,” he said. “It will be a game-changer for our industry. It will – for the first time in nearly 40 years – create a stable, statewide funding source for construction skills education.”
Caton praised the program as a “Public-Private Partnership recommended by business leaders statewide. It is a solution by and for business. It is a market-driven solution to the workforce problem. And it does not grow government.”
The program is not only timely, it’s urgent, said Caton.
According to an AGCA survey, 52 percent of contractors in Alabama increased employee count in 2014 and 40 percent of those hired six-to-15 employees. Forty-eight percent of Alabama contractors expected to add at least one-to-five employees in 2015. And 41 percent said they were struggling to fill professional and craft worker positions. Forty-eight percent predicted that finding skilled workers will become more difficult.
“Worker availability challenges have replaced a lack of projects as the biggest worry for many contractors,” said Ken Simonson, the AGCA’s chief economist.
Now that the program is in place, it falls to the Craft Training Board to see the vision through. Its members are: Jerry Grissom, Southern Co., Birmingham; John Garrison, Garrison Steel Erectors in Pell City; David Hare, BL Harbert Construction in Birmingham; Al Stanley, Stanley Construction in Huntsville; Chris Swain, Monumental Construction in Birmingham; Bruce Taylor, Marathon Electrical in Birmingham; Jonathan Watts, Selective Masonry in Birmingham.
We asked them about the importance of the program and their expectations of it as they embark across uncharted ground to build the future of the industry in Alabama.
Board Chairman John Garrison said the CTA is beyond important -- “It’s vital to the health and future of the industry.” David Hare described the CTA as “one of the most needed and exciting things for the construction industry in decades. The Craft Training Act is absolutely critical in helping fund future generations of skilled craftsmen.”
Bruce Taylor said the passage of the CTA is “extremely important” not only because it’s a long-term solution to the industry’s skilled labor shortages, but because construction companies in the state set aside their individual interests to work together for the greater good. “This is the first time the construction industry has come together and created a funding source to address craft worker shortages,” he said.
David Hare called the CTA “a key component in developing a long-term solution” not only because of the industry cooperation but also because it will make funded skilled-craft training available across the state, and not just in isolated pockets. “We can now reach areas where training can be provided to help meet the industry needs,” he said.
The program, said Hare, carries the traditions and methods of the past into the present, but in a new form. “Training was largely passed down through families [in the past] in the form of the father or a relative teaching and mentoring a son or daughter in their trade,” he said. “Apprentice craft training has always been a vital part of building a quality workforce.”
If the average citizen maybe doesn’t fully appreciate the construction skills it takes to lay brick or spot weld, they can appreciate the end result, said Hare: “We all want to live in a nice home, worship in a nice church building, send our children to well-built and safe schools, drive over safe bridges and roads, drink water from quality built treatment plants. The list can go on and on.”
Chris Swain said the CTA is a logical and needed extension of the “Go Build” campaign because it will make a career in the industry more appealing “once we reinvigorate the interest and viability in the construction industry,” he said. “As a whole, until the ‘Go Build Alabama’ campaign began, the construction trades were losing potential candidates in mass numbers.”
The need to find a way to train workers has been the talk of the industry for at least a decade. There were schemes, all kinds of schemes. But they ran into the same, obstinate, brick wall: Great idea! So who’s going to pay for it?
The genius of the CTA, said board members, is that it will be funded by a modest hike in building permit fees. It takes a bite out of you, but not enough to draw red ink. There’s no tax hike, and no expansion of government.
“Funding has been the missing link to training,” said Chairman Garrison. “There were very few sources for funding prior to the Craft Training Act besides individual companies who paid for their own programs. Many programs struggled monetarily and still do. This initiative eases the important money piece.”
Al Stanley said individual companies and associations have tried for years to solve the skilled labor shortage but there was an inborn problem with those efforts: “The participation of the contractors especially has been hampered by the short-term nature of some construction projects and employees.
“Some companies find it difficult to invest in training when there is a real likelihood that the employee may not be with their company long term. Tackling a portion of the financing from a higher level (as the CTA does) reduces the amount that a contractor may spend when paying for a training program.”
Caton said that providing a stable funding source for training also allows the industry to grow a pool of skilled workers so contractors no longer have to worry about investing in an employee’s education only to lose the employee to a competitor or another industry.
Grissom said Americans need to reconsider their perception that learning a skilled trade, instead of going to college is a bad career move. And that, he said, will build on the CTA and make it more likely to succeed.
“The workforce development system in the U.S. may not have the right emphasis on career technical or vocational training,” he said. “For example, most federal and state funding for post-secondary training goes to four-year colleges and universities. However, according to a 2011 study by Harvard entitled “Pathways to Prosperity,” only 33 percent of U.S. jobs require a four-year degree. The perception that everyone needs to get a bachelor’s degree to be successful has to change.”
Taylor applauds the CTA, but he thinks the act alone will not close the skilled labor gap in Alabama.
“I think this program may kick start the idea that training is important and beneficial to the company as well as the employees,” he said. “I don’t think the program will ever provide enough money to solve the problem completely but it may subsidize the training enough so that people start to see the value in it. I’m sure you will see programs like this pop up in other states in the next few years. I also think the initiative sends a signal to those thinking about entering the construction workforce that the industry is serious about training and their long-term development and success.”
Garrison said the CTA changes the way the industry thinks about workers, the way workers think about the industry, and the way the tradition of master craftsmanship gets carried onto the next generation of workers.
“Knowledge!” he said. “We are losing older workers to retirement and they have the knowledge by and large to build. That knowledge is key to the future. Knowledge will come through intense training.” Workers can then build on that base, and they and companies will reap the benefits.
“An employee starts with certain skill sets and through opportunity over time he can expand that skill set,” he said. “A welder may start in one welding discipline such as flux core welding on mild steel and develop skill for nuclear welding of exotic metals or develop skills to become a weld inspector.”
It’s essential that the CTB provide skills training in all categories of construction, said the members, because that offers greater variety of careers – and enticements – to job candidates, and it makes for uniform higher standards in the industry.
The training is important for “the entry and secondary levels of the industry,” said Swain. “This is needed in many arenas of the construction industry. Eventually the need for specialization takes predominance as one’s skills are honed.”
Stanley said training industry-wide is only part of the effort to reinvigorate the industry and give it a little more sex appeal than it’s had in recent years.
“Other critical parts to the labor shortage problem are the continued success of recruiting and informational programs for construction that attract young people to the workforce and that also help to change the negative image that some have of construction,” he said. “Another piece that will have to be addressed is providing more competitive wages for some segments of construction labor. We are competing for employees with other industries that are providing higher wages for a similar skill set.”
It’s essential that the program offer a wide variety of training programs, said board members. “General construction training, carpenters and block masons, the MEP trades have always done some type training and have some programs in place, some other trades have no training in place,” said Taylor. “We recognize that one type training does not fit for all trades or all people so we are trying to make sure we provide several different options for training types. Travel can be an issue in craft training so we are looking at programs that have the ability to do distance learning.”
Stanley said flexible skills training is elemental to the success of the CTA. When he was earning his master’s degree at the University of Texas, he researched “multiskilling” – the idea that an employee is accomplished at performing more than one core skilled job – and the results were impressive.
“The research that we conducted with companies who cross-trained showed that there was more productivity, a higher usage or availability of work for the employee, in many cases higher wages, a more enjoyable work experience for the employee due to being able to do different jobs, and a more flexible workforce.”
The ultimate goal of the CTA, said members, is pretty simple: to provide a skilled, ambitious, devoted, financially rewarded workforce that will sustain a thriving construction industry in the state.
Once the system is up and running and “gains momentum,” said Garrison, there will be a “plentiful supply of knowledge and skill for building our infrastructure” for generations to come.