Worker shortage tightens
Companies respond with better benefits and promotional campaigns.
A new employee at Consolidated Electric recently was digging a hole when he dropped the shovel and walked away, saying, “I don’t have to work this hard to make money,” according to James Weiler, director of business operations at the electrical company.
That sentiment is becoming increasingly common in the skilled construction industries, with many reports and anecdotal stories of how contractors are struggling to fill jobs across the country.
Consolidated Electric is stretched thin with 130 employees in three main offices in Michigan. The company hasn’t said no to any projects and continues to look for new work, but Weiler said it could add 50 employees and keep them busy. With a 25 percent increase in business since last year, Consolidated Electric will see approximately $15 million in revenue, but if the company could find 50 qualified candidates, it could mean an extra $6 million.
The labor shortage is a real issue, but it doesn’t affect general contractors as much from a staffing standpoint, said C.J. MacKenzie, vice president of preconstruction at Orion Construction.
While the labor shortage hasn’t brought any projects to a screeching halt, it has made projects take longer, he said.
“Industries across the board are seeing a shortage of skilled labor, and there are just not enough people to go around,” MacKenzie said.
“From our standpoint, communication is the most important thing. We have to look in every direction and ask, ‘Are they performing in a quality to our standards? Can they manage the deadlines? Can we still do projects in a year, or does it become 13 or 14 months?”
Kent Companies, a concrete specialty company, has tripled staffing in the past three years and now has more than 900 employees nationwide. President Jeff Vanderlaan said the company is always adding people to staff, but there’s still more work to push the demand.
To compensate for the labor shortage, some subcontractors are pushing employees hard.
“The guys don’t get free time. We want both their hands working all day long,” Weiler said.
Vanderlaan agreed, saying employees aren’t pushed beyond their capabilities or safety limits, but are expected to work longer hours, with which come better pay, overtime and other perks.
Shortages aren’t limited to the construction labor force. Skilled worker shortages also have been reported in the Business Journal in manufacturing, including a profile on Grand Rapids propeller company Michigan Wheel, and in the restaurant industry.
A 2013 report by Georgetown University suggests the U.S. will face a shortage of 5 million workers in 2020, a fear Fifth Third Bank Chief Investment Officer Jeffrey Korzenik shared with the Business Journal earlier in May.
Korzenik said the U.S. economy will continue to grow — unless the labor supply cannot keep pace with labor demand. He cited the labor shortage as one of the few reasons the economy might dip until reaching a new peak in approximately a decade.
Today’s skilled labor shortages in construction are partially a hangover from the Great Recession, when contractors had little work and struggled to keep employees on staff and feed their families.
A large portion of job openings now and in the near future also are from the aging baby boomer demographic exiting the workforce, and that’s bad news for skilled construction trades that were considered acceptable career paths as that generation came of age.
In West Michigan, the average skilled construction trade worker is in their late 40s or 50s. The current stress can be attributed, at least in part, to the past two or three generations of students being told it’s college degree or bust if they want a solid career, said Jen Schottke, director of workforce development and external affairs at Associated Builders and Contractors Western Michigan Chapter.
“The people in the field are advancing in the career, becoming foremen and superintendents,” she said. “There is no one coming up underneath them.”
Weiler said he’s near the end of the baby boomer generation, and his father romanticized the idea of finding a place in a trade industry.
“It’s been pounded into the minds of students: If they want to be someone in the world, they need to go to college,” Weiler said. “My dad made sure I knew I had to find a place I belonged, and to put my teeth into that for a career. That’s not the message anymore.
“We could stand on top of a school bus and scream at them, and they wouldn’t pay attention to us.”
ABC West Michigan is attempting to change the stigma about construction not being a viable career option, as are various leaders within the industry. Last week, West Michigan Works! and ABC West Michigan hosted MiCareerQuest at DeVos Place, when more than 9,000 area middle, high school and college students were able to experience firsthand skilled trades in construction, manufacturing, health care and information technology.
ABC West Michigan also helps run jumpstart programs for 18 to 25 year olds, which are condensed training courses meant to turn out young professionals with entry-level skills and licenses.
Grand Rapids Public Schools has become involved with its Innovation Central High School, which aims to prepare graduates for entry-level jobs in skilled fields.
There are even national programs, including one by JPMorgan Chase, aimed at changing the perception of skilled trades as a career path, and celebrities like Mike Rowe and John Ratzenberger who are championing the cause.
“We know how important it is to change the perception of both students thinking about the career and the parents and school stakeholders,” Schottke said. “We need students who are smart with their hands and smart with their minds. These are enormous puzzles, and you need the aptitude to change quickly.”
As some workers venture into the trades, or re-enter after having been laid off during the Great Recession, retention of those employees and having an internal focus on taking care of what you have becomes more important than ever for employers, Vanderlaan said.
Weiler said he’s mystified that taking on thousands of dollars in student debt for a career that might start at $35,000 a year has become the preferred or “correct” route for most of the student population. He said Consolidated Electric will take on interested candidates, pay for their technical education and graduate them into a guaranteed starting salary of approximately $45,000 with mid-career salary expectations of more than $70,000 and benefit packages — all without student debt.
To help retain those already on staff, Weiler said Consolidated Electric has overhauled its compensation packages in the past 12 months to include more fringe benefits. He also said the company has invested between $150,000 and $200,000 more than last year into the benefit packages.
“We’re trying to figure out how to change some of that screaming and yelling baby boomer mentality (of the need for a college degree), to work with the younger generations who think differently. It’s not a negative, it’s just different,” he said.
“My biggest concern is the departure of students viewing trades as a clear alternative for a nice wage and family life.”