Staying Ahead of the Regulatory Curve and the Role of Workforce Development in the Future of the Construction Industry

The construction industry’s growing shortage of skilled craft workers during the past two decades is well documented. While many studies indicate economic factors as the root cause of this issue, the decreasing availability of industry related workforce development such as high school and other craft/trade instruction programs, as well the stigma of not attaining a four-year college degree, have also played a major role. The growing problems with our secondary and higher education infrastructure are a completely different subject for later discussion.

The construction industry workforce development was born out of the necessity for companies to strategically plan for the replacement of their aging and retiring workforce. Traditionally, the journeymen taught the apprentice everything from the craft to what you needed to watch out for from a safety perspective. When the journeymen retired, the apprentice carried on the work and over time the cycle repeated. Most apprentices learned how to do their jobs not necessarily through the corporate safety manual or other corporate based education/training or regulatory code manuals. They learned in the same way their bosses did in the ‘good old days’ … they were mentored by the journeyman and eventually became a journeyman themselves.

Up until recently, construction companies’ requirements or failures for implementing occupational safety did not necessarily render the company or individual (financially) responsible to their federal or local government. Projects had to be executed quickly and often times the focus on workplace safety and/or other regulatory compliance took a backseat to increasing profits. As the growing consumer advocates and both federal and state governments drive massive expansion of the regulatory environment (from job related safety to financial reporting and tax) the complexion of the construction and other industries workforce compliance requirements have changed drastically.

Current construction projects must be profitable in order to sustain the industry and support growth across this nation. These companies must operate in an ever evolving and complex web of regulatory requirements under OSHA, the Department of Labor, the Department of Health and Human Services, etc. Unfortunately, “higher education” institutions traditionally focus on the four-year degree programs geared towards business management, marketing, accounting and do not produce highly specialized and skilled workers that  the construction and other industries need to actually do “the work”. Workforce development through revamped high school or youth related programs (i.e.: SkillsUSA and CEFGA), as well as restructured technical college programs or private company education/training (i.e. NCCER based) are the only way to successfully replenish our retiring workforce. Fortunately, formal workforce development programs like those listed above are again emerging as the standard.

With increased regulatory/compliance enforcement, rapidly advancing construction related technologies and the rate of workforce retirement, the need for skilled craft workers is greater than it has ever been. The recent economic crisis that formally began in 2008 did not help as many skilled workers in construction were forced to find work elsewhere and have left the construction industry altogether. Uncertainty and doubt have exacerbated the development gap in skilled workers as young talent willing and able to assume future careers in construction have continued to rely on a college degree for “better” and more secure job opportunities. Many of these college graduates are beginning to see that some of their contemporaries who, for example, chose to become a welder under a corporate sponsored training program are not only easily able to find work, but they’re making significantly more per year than most college graduates. The welder is also not saddled with the average $60,000 in college loans that postgraduates now faces. With the expectation that the industry’s skilled workforce shortage will get worse before seeing tangible signs of improvement, companies should act now on “strengthening their bench” with a plan to stay ahead of an ever-changing regulatory curve.

So, how do you stay ahead of the curve?

Having a substantial pool of skilled, credentialed craft workers is mission critical to the longevity and success of the construction industry. This requires careful planning. Education, credentialing and compliance are among the chief weapons at a company’s disposal to combat an impending deficit of skilled craft workers in an industry that is both highly demanding and dangerous.

Here are some simple truths we must face.

  • Regulations require employers to reasonably educate, but also to continuously update their employees on all aspects of the activities in which they are expected to engage. Failure to comply with industry regulation is a very effective method for disposing of a company’s hard-earned profits.
  • Worker requirements in the construction industry are ever changing. With the advent of technology platforms such as ISNetworld, Owners and Contractors are now requiring proof of or certification based training for other qualifiers for specific job/project consideration. As a result, companies are now requiring credentialed craft and/or management training to qualify personnel for not only advancement opportunities within their own organizations, but also on job opportunities for those outside the organization. Credentialed training offers nationwide recognition and portability of acquired skills that many otherwise legitimate training courses cannot and historically, have not been able to provide.

On the surface, a successful formula for keeping ahead of the curve seems pretty simple since everything is clearly spelled out, right? … WRONG! Educating the workforce through credential based training, follows a sea of complex rules and regulations from OSHA, DOL, HHS, IRS, etc. Then, add the demands of meeting the budget in an economy that puts more and more pressure on profit margins, maintaining quality control and have absolutely no accidents on the jobsite is a daunting prospect!

Positioning your organization for success has become an uphill battle. To economically overcome these hurdles, workforce development must be carefully planned, highly organized and efficient from a time and cost perspective. When a company assumes the cost paying an employee to attend job-specific training, paying for that training and absorbing lost productivity of that employee as a result, there must be a benefit to recouping that “investment”. This is one of the main reasons why credentialing will play such an instrumental role in the way companies develop and retain their workers moving forward.

Innovations in construction based education and training are making it possible for companies to find and hire talented candidates from different age groups and with varied skill sets. These candidates are developed into productive members of the industry. Many credentialed can also be converted into college credits. Apprenticeship programs are also gaining popularity as they offer a blended approach of classroom instruction and practical application of learned skills and competencies. Earnings-conscious employers are realizing the long-term benefits of having their employees take a vested interest in their personal growth and marketability which these apprenticeship programs help to accomplish. Incidentally, apprenticeship programs can and should include credentialed curricula.

The threat of a prolonged workforce shortage is real but does not have to be reality. Given all this, there are several questions you need to ask yourself while preparing for the future.

  1. What is your plan for educating your employees in a changing industry?
  2. How will you keep your company profitable and in regular compliance with increased regulatory enforcement on the horizon?
  3. How will your company prepare for the expected drought of available skilled workers?

Answers to these questions are critical to your business survival during a potentially tumultuous period for the construction industry. Again, staying “ahead of the curve” requires advanced preparation/planning and a cogent strategy. The most important requirement is having an educated, compliant, continually developing and stable “bench”/workforce.

– Mark Hornbuckle

CEO, HB NEXT