The dearth of skilled labor is not just the subcontractors' problem
When proponents try to attract young people to construction careers by flaunting well-paying jobs without college-loan debt, they’re doing it wrong. And builders who contend that the skilled labor shortage is the subcontractors’ problem simply haven’t yet seen how the dearth of skilled workers threatens the future growth of their companies, Michael Smith says.
Smith was part of a workforce development training group that started the project-based learning nonprofit Colorado Construction Institute in 2012, before partnering with regional builder Oakwood Homes and rebranding last year as the Colorado Homebuilding Academy. The Academy has enrolled more than 350 students in programs that offer classroom and online instruction, hands-on experience, and jobsite internships. More than 80 percent of its graduates are employed in construction, and the school intends to train more than 1,000 students this year.
Q: Who is enrolling in the academy?
A: We have all kinds of students. We have programming for youth, for example, where we partner with high schools and contextualize learning that the [students] have already had. Maybe it’s a math class, maybe a tech career class, but usually it’s a situation where the faculty doesn’t have the skill set to teach our content.
So we’ve created and provide instructional content that we use during the one day a week we are there. Then we give that to the teachers because we don’t need to be there to teach how to calculate perimeter in math class, and we’ll say, “Here are some plans. Use this set of exercises to translate perimeter, volume, and area into an estimating sheet.” So we’re putting some reason into why you are doing it. Then we’ll come in and help the students build a section of the wall in the plans that they’re learning.
We’re trying to find two levels of people. The first might be somebody going through the exercises using the math skills they’re learning in school. They may be working on a 2,400-square-foot space that’s getting carpet and determining the cost of the carpeting. They might think figuring all this out is kind of neat, so we come in and talk about how what they are doing translates into construction applications—everything from the guy delivering the carpet, to installing the carpet, ordering the carpet, estimating it, and engineering it. So you could have jobs from the delivery guy to the structural engineer.
There’s a second level we’re looking for when we come in and teach proper safety, proper tool use, and all the prerequisites that come into building the wall section that the students were estimating in class. Now we’re finding the students who say, “I don’t really like looking at plans and doing the estimating, but I enjoy the building part.” Well, those are people who may be interested in coming into a trade position through us. We’re currently doing that with six high schools in four districts.
Q: What is available for those students who want to work in construction?
A: What’s next is a construction apprenticeship that is not designed for high volume; it’s designed for high impact, high quality. Students come to our training facility for X number of days per week. That number increases as they progress through the training program and culminates with three days of work training with us and then an internship with a trade partner for one day a week. After that the training with us goes to two days a week, and the internship goes up two days. Over the course of two semesters, students end up with slightly over 250 credit hours of instruction in a training facility and 128 hours of internship. I don’t know of any trade partner who wouldn’t take this type of person in a heartbeat because they’re already more skilled and trained than half of their workforce.
Q: Who pays for the training?
A: Every one of our schools has skin in the game. We do have workforce development grants. We work with local training organizations, and we get county money with the Workforce Innovation and Opportunity Act. (WIOA) and we have industry funds, so there is a three-way funding stream. So if the school says I want to participate, but I'm not going to pay for it, we’ll have to say no. They would be paying $2,500 and we bring all the tools, all the instructional content, all of the materials. The school money just helps us defray some of those costs.
Q: Do you have to recruit high school students to sign up?
A: Yes we do. One of our new schools, Columbine High School, has had a woods training program for a number of years but delivered as a traditional shop class. This is a really interesting partnership because they recognize that their woods training--they had five sections with about 20 students per section—is not doing job workforce readiness training. They’re learning to make cabinet level stuff. That would be great if we needed 10,000 millwrights. I need field workers, and the staff training them with tools that can be carried on the back of a pickup truck, not these big table saws that you can’t use in the field. So what they are doing now is a building trades class, which will start next semester. We will be down there for most of the day tomorrow talking to students who want to listen and say here are career opportunities in construction, and here is where this type of education plus training can lead to. So if that sparks an interest you should get into next semester’s building trades class. And then we’ll help the school actually deliver.
Q: When you’re recruiting high school students, is there a perception they have about working in construction that you have to overcome?
A: It tracks with what we expect and it tracks with some of the stuff that and a NAHB has found. (Editor’s Note: A 2017 NAHB national poll of young adults aged 18 to 25 found that only 3 percent were interested in a construction career and 63 percent of the undecided rated the likelihood of considering a trade as “no chance no matter what the pay.”) A lot of that (attitude) comes because they have parents telling them about other jobs, and they’re never exposed to construction. When we come across (students) who say who never thought of working construction but maybe they’re interested, we say great. Take this class at your school. Maybe it's an elective credit or a math credit, but learn about. It. At the end of the class, if you still don't want to (pursue a trade career), great you at least learned some back pocket skills.
Why spend money and somebody who already made their mind up about what they are going to do. But the ones who are undecided, we can educate them about the opportunities in our jobs. When people say I don't want to work in construction, I ask them what do you think construction is? They’ll usually say it's the guy on the road with the hardhat and sign or the guy just swinging a hammer. So we’ll have those conversations and say those are some of the jobs but engineering is in construction. You’ve got construction management. Office jobs are in construction. We’ve got electricians making $100,000 a year with 20 years the industry. So if you don't know what construction is, maybe you should listen some more.
Q: What is the response of the schools when you recruit?
A: When I was approaching schools five years ago, I had very pleasant and in many cases not so very pleasant experiences of doors being closed in my face. They would say your program sounds fine and dandy and we know you need carpenters but everybody is going to medical for us. That has changed in Colorado because we are suffering a massive shortage. Our industry has done a pretty good job of getting a lot of PR stories out there talking about the shortage in construction and the career opportunities that creates. So now we have schools coming to us saying I want to put in more career pathways for our students, and we would like to consider construction to be one of those. Now I disagree with some of my peers when they promote the industry by saying construction can be an alternative to college. We do a different take especially when talking to schools and parents.
We’ll say yes, we have jobs in construction that are an alternative to college, but we have jobs in construction that require college. Our message should be construction is a great opportunity for a long-term career with or without college. When we use that type of rhetoric, it allows us to get into the door with a high school that would normally be closed because they would say our students are going to college.
We have a very unique model with a local community college here. When we asked them to bring back construction supervision, and estimating certificates and an associate of applied science program, they said it was too big of an investment for them. We said okay what if we remove that barrier. We'll create instructional content. We’ll create your advisory committee. We’ll tell you exactly what our industry wants the students to know, and we will partner with you in the delivery of those classes. We will find instructors, and we will train those instructors. In some cases the school actually has a model where we will teach that class in an outsourced environment.
It doesn't mean you can do for all of the classes because of the way (colleges’) accreditation bodies work but there is nothing that says that the industry who is the one complaining the most can’t be part of the solution instead of saying to the schools solve my problem. (The home building industry) shouldn’t want schools, whether secondary or post secondary, to solve our problem. We need to be at the table to say a graduating student--whether it's a certificate from a community college, a two-year degree, or four-year degree--we need to be the ones saying here is a list of the competencies that we want. This is what we will pay for. Then we get into this community college and say teach this. Don't teach what you think I want. Teach what I am telling you we want. Then you get quality training programs.
Q: What are Academy’s funding sources?
A: We have a limited amount of funding that operates our program. We get direct industry contributions from Oakwood Homes, which is a large-sized local regional builder. They recognized that they’ve got to do something about the labor shortage. They said we don't know what to do, but we've got to do something, and we have is capital to put towards a solution. So we built the homebuilding Academy exactly for that purpose. It's a true partnership with people who are doing similar work.
Previously, I was having the exact same conversation about creating some additional upskilling classes in carpentry. We know what (builders and trades) want to do. We know when (building crews) do a floor system for production building now you are using either TJIs or open web truss joist engineered systems. How often do you roll in 2x12s or anything along those lines? They don't anymore, but some school curriculums still show how to do that. I don't know about elsewhere but in my market, they’re not building with rafters. Everything is engineered trusses and shows up from the factory in a truck. So why aren’t we teaching about trusses and how to install those versus teaching the traditional ridge beam rafter systems.
My point is the industry has to do more than just complain. It has to organize a little bit better. We know what our field people need and what our superintendents want to have for a skill set. It's not that hard to write it down and go to the schools and say, hey teach this.
Q: What are some of the motivations for adults who have enrolled?
A: Colorado is a pretty progressive state, and the legislature a few years ago passed an appropriation to pay for outreach and recruitment for vocational training programs. We have a grant that pays for a recruiter and an outreach specialist. What we do is we put out targeted campaigns in social media and try to get traditional news media and pick up stories through a PR firm about the opportunities we have in construction jobs. After that (the outreach) becomes a one-on-one conversation (with prospects).
Today I walked into the office for a 10 o'clock information session, and we had five people here who said I heard about the program; can you tell me more? Now that is outreach to get them in the door. The rest is recruiting to determine are they the right person? Are they ready for training? Are they ready for employment, and are they ready for us? It becomes a conversation to see if the opportunities for field positions within our industry provide any interest to them? Not everyone showing up are people we want to invest money in to train. We try to figure out do we have somebody who is committed and ready to start a job as soon as training is over.
Then we have our adult basic skills camp. That program is eight weeks long, two nights per week, three hours per session and for every hour we have in our lab time facility. We have almost the same amount of time in an online environment. So we took all of our instructional content, created presentations, quizzes, put it online in a learning management system. We’re not doing that because we think you can learn construction on the Internet. But if you're going to have to shell out for a three-hour class with a 45 minute lecture about different fasteners before we have to teach you how to use those, and the tools to secure it, why not have that happen online while you're drinking a cup of coffee and sitting at home. Watch the video, watch it two or three times, take your quiz, and show me that you are committed. And then show up for lab day where we are going to work with the tools and the products that we talked about.
Q: What is the attraction for students. Is it the hands-on training, the classroom or the combination?
A: The majority is looking for the hands-on training. When we find somebody, and we sit down with them and we ask have you ever considered a job in construction, and they say yeah, we ask why haven't you gone for it? They say because they don't know how to use the tools. When you ask any contractor in tight labor market what are you looking form they'll say I just want somebody who just shows up, has a pulse, and wants to learn. That is what they will say but that's not really what they need because who wants to have somebody with the pulse no skills and just shows up. They are a liability, and they are costing you money for several months.
Why not have somebody show up who has a pulse, wants to work, and has some skills. We're not saying we have carpenters coming out of the short program, but we have trained during the last five years over 3,000 people and never had any reportable incident of an injury--I did have one and it was an instructor-The reason being is we teach how to use these tools in a safe environment that can be duplicated in the workforce. So why not have that same employer who says give me somebody with a pulse. Why not have them say give me somebody with a pulse who wants to work in construction and already knows how to use the tools of the trade. So the majority of people who say they never thought about having a career in construction, or they did, but didn’t pursue it because they don't have the skills. If that's the barrier, that's the one that should be bridged.
Q: Are there programs for contractors who can get a portion of the salary they pay the students they hire subsidized?
A: It's a federal program. Part of WIOA provides workforce development training and support services. It comes out in two primary ways. One is the individual training account. It's funding to pay for training in programs that have a nationally recognized credential. So it could be a community school or a workforce-training program through trade association, that type of thing. The other type of funding they have this call OJT wage subsidy. It is on the job training wage subsidy it's not a huge amount of money, but in Colorado at least our local workforce office has $5000 per participant subsidy for individuals that is duly enrolled in their program, goes through some training, and gets the job. That program will subsidize 50 percent of the wages up to $5,000. Our county workforce offices went internally in their economic development group and said how do we stimulate growth of construction jobs. Well they got even more funding for the OJT program. So the state-level grant system, which is about $1 million, I think got a $3-million appropriation, to do exactly the same thing for in demand careers, not just construction but several different career pathways.
Now beyond that I've been having conversations with national production builders, names that everybody knows and they've been having conversations internally of how do we subsidize it. This is the exciting part of our industry now. Here is where it is finally coming to and this is really the beginning of a lot of speeches I give this (issue).
When we talk about a labor shortage, we need to truly identify whose problem it is. For years we've been saying--and I've been having conversations with big builders--hey we want to help you with the labor problem. For about three years, the universal response was well we don't self perform, it's our contractors, so it's really their problem. I said okay I get it. Come back to me next year. They come back in a year and I ask how many houses do you think you could have built this year that you didn't? Even though the capital was there; the land was there; the buyer was there; how many did you miss by? The answer usually is somewhere between they could have built 20 to 30 percent more houses, and the response that I give sometimes flippantly, sometimes not, is, ‘now I ask again, whose problem is this?
It from a contractor standpoint, they all understand supply and demand. When you are in demand why would you change the supply? I talked to an electrician just yesterday at our facility who wanted to look into what we were doing and our graduates. He said I could hire six guys today but I'm actually passing work because I don't have enough crews. I said what are you doing to hire people and he said I put an ad in Craigslist. What does that ad say? It says I'm looking for entry-level position and I really want them to have one-year experience in residential wiring. I said that kind of prospect doesn't exist anymore. Contractors have to think differently about how we are hiring and what we are willing to do. Moreover builders have to realize that if there is not enough skilled labor in our trades, they’re not going to be building enough houses. Siding companies and faucet companies don't sell enough products to go in those houses. Insurance companies don't underwrite new properties or new mortgages. The people the people who have a problem with a labor shortage are builders, land developers and anybody who profits from the closing of a new home. That is who has a problem.
There had been a couple of publicly traded companies that are having this conversation about wage subsidies, saying what is really leverage the workforce innovation opportunity act wage subsidy programs and do it ourselves as well. Why not work with government and say look if you don't want 50 percent of this person's wages to be subsidized, would you do it for 25 percent? I'll (the builder) will come up with money for the other 25 percent of those wages as long as electrician is working in my community, and on my properties. It’s not hard to track because you got to submit labor records anyways. It's just an incentive. Our government works on incentives all the time. Why doesn't our industry? It's not that expensive. Ask any builder what is your carrying cost? What is every day of missed schedules costing you? What is the opportunity cost for that product and also for the next product after that? We are an incredibly capital-intensive market and if we can manage some of that funds (to train skilled labor) that's our goal.
Q: I was going to ask if contractors are hungry for your graduates but it sounds like the builder are hungry for your graduates, at least the ones that recognize that the labor shortage is there problem?
A: Yes, I spent a lot of time in that conversation talking about whose problem is it really and now that we've talked about what are you willing to do. So we had a builder here—I’m not using their names but it's national builder that works in about 16 markets. They came in with their purchasing department, their trade relations person, their salespeople, and said okay what can we do. Almost every builder has a trade day, a trade counsel, or trade appreciation day. Do another one, you can host it here (at the academy) and say here is how we want to be part of the solution.
We can encourage contractors and say look framing crew XYZ here is what we are willing to do. A builder is willing to put in five or $10,000, whatever the number, to train new people to work for you. The trades are wonderful people. We have a lot of great, small businesses, but they don't necessarily know how to solve a problem of this magnitude. But with builders working with trades, it is a manageable project with manageable solutions.
Q: How you measure the success of the program?
A: We do have the standard measures and any (school) would have. How many people did we enroll in the program? How many of those completed the program? How many were employed within the first quarter after graduation and retained three quarters after graduation. It doesn't have to be the exact same job but it has to be employment in our industry.
There’s another metric we added as a measure of a successful workforce program and that is how many other people are we supporting through our technical assistance program. I have had four different states that have flown into here to learn how we're doing it, so they can do it in their area. We have six schools just this year that said I have a teacher; he's a former tradesperson, but doesn't know how to be a teacher. So we help them with scope and sequence, and lesson plans, pacing guides, instructional content, and build that back to common core curriculum so it can be used anywhere.
Q: Among those states that came in for a look see, was Illinois among them (Editors Note: Editor is a resident of Illinois)?
A: No, there wasn't anybody from Illinois but it was one of your neighbors to the east. We had a program coming in from in Colorado but on the western slope that is working with transitional young adults coming out of the foster program. They’re three and half hours away from where we are there is no way we were going to go over and set up a training program there. But we want to support them doing it.
So we taught them how to get access to the WIOA funding for youth transitioning from a foster care setting, which is a guaranteed preferential service just like training veterans are. We gave them all of our program content and said here is how we do this training program for both youths and adult. Give us a call when you ready and we will help you set it up. They'll have a program running in two months, and it took us about six hours worth of work to help them make that happen.
Q: So you’re not protecting your turf and saying this is our content, this is our program. You're getting it out there because you’re more concerned with solving the problem rather than getting the credit for it?
A: There are other programs that really protect and copyright every piece of paper they turn out and they think that the value is in the piece of paper. It is not. The value is in the building community working together to solve the labor problem. That is what is supposed to be happening. So if we figured something out that works, whether it be instructional content or providing supportive services to those in need, then we can help other programs do exactly the same thing.
Across all our programs from building pathways to her youth apprenticeship program our adult skills Boot Camp, we graduated more than 350. Our goal looking at 12-month period work for is over 1,000. So we've expanded support; we’re raising more money for workforce services; we’re providing more supportive services for those that need it, and that allows us to broaden our employment base. We will be graduating over 1000, but that is nothing. However, if we helped 10 other programs do the same thing, now we’re talking real numbers. Is it going to solve a problem tomorrow? No and if you think this labor shortage is showing its teeth now this is just the beginning. For every four people we have graduating (from training programs in general) in our industry irrespective of whether it's residential or commercial, we have just one coming into the trades. Yet we have a 30,000-position shortfall nationally right at this moment. What is that going to be as time goes on if we don't implement some sort of substantial change in how we are recruiting and retaining the workforce?
Q: The industry can't wait around for some national apprenticeship program to happen?
A: Exactly. To think that our school systems are going to adopt youth apprentice models universally and come out with competency-based graduation requirements universally is just foolishness. Work within the system that you have, but don't put your eggs in a basket to say we’re going to adopt the new apprentice model for all our schools. It's just not going to happen overnight. I question if it would happen anyway, but it certainly won't happen overnight.