Construction Labor Shortage
The scene was a class on construction trades at Northwestern Michigan College with about 20 students in attendance.
A veteran construction company official addressed the students about local job opportunities in the trades, urging them to take advantage of the current boom in building. He was somewhat surprised – and even more disappointed – when only one student followed up with any questions. “Three or four openly admitted that they were only there because they had to be,” he said later.
Such is the sad situation in the construction industry – too few young workers showing an interest in taking up a hammer or wrench to replace veteran workers who are poised to retire over the coming decade. That’s one of several factors that account for northern Michigan’s dwindling supply of talented construction workers, according to Ruth Nunnelley, executive director of the Builders Exchange of Northwest Michigan, whose members are involved in some 1,500 northern Michigan construction projects annually.
LEFT, AND DIDN’T RETURN
One of the advantages of the construction industry is that skills are usable anywhere in the nation where growth is occurring. But that was also a disadvantage for northern Michigan when the recession hit and the construction industry tanked. In recent years, many northern Michigan workers left the region for warmer, more economically-welcoming climes. They haven’t returned and it’s uncertain if they ever will.
“When the state’s economic downturn happened in 2008, ’09, ’10, many workers went to places where there was construction work to do,” Nunnelley said. “They went to the Carolinas, the Dakotas, Wyoming. We lost a lot of members.”
Hallmark Construction in Traverse City employs 35 people and needs to hire another 15 in the next six weeks, according to President Jeff Fedorinchik, who sits on a Northwestern Michigan College committee that focuses on technology and the construction industry. “No doubt there is a shortage of workers,” he said. “We have numerous job openings. There’s a need for concrete finishers, carpenters and project managers.”
Fedorinchik declined to detail the salaries involved in those jobs.
“But it’s significantly better than the service industry, you’re learning a skill and you’re guaranteed 40 hours of work … probably more at time-and-a-half … to learn a trade you can use for life.”
Grand Traverse Construction, which employs about 30 workers out at construction sites, has openings for trim and rough carpenters and form setters, according to Project Manager Darek Purgiel, a 17-year industry veteran who also serves a president of the Builders Exchange. “We’ll take all skill sets and train them on site,” he said.
GOOD PAY, APPRENTICESHIPS AVAILABLE
Perhaps most importantly, the industry needs to do a better job of telling young workers about the good-paying, high-tech jobs that are available in construction, according to Nunnelley.
“We start workers at a couple of dollars higher than minimum wage,” said Jack Ocobock, project manager at D&W Mechanical. “We offer health care and other benefits.”
D&W Mechanical has been handling plumbing, heating and cooling projects in northern Michigan since 1986. It has a team of about 80 workers busy at construction sites such as Hotel Indigo, the Cowell Family Cancer Center at Munson and the new Meijer store in Acme Township.
Ocobock, a licensed master plumber, has been in the business for 30 years. “Folks don’t realize what an apprentice program is,” he said. “A young person can start with us right out of high school and their training will last as long as college.”
D&W regularly decides not to bid on projects because of manpower issues, according to Ocobock.
“We’re just barely coming up with the talent we’ll need to replace the huge talent loss when our workers reach retirement age,” he said. “If we hire someone right out of high school, it usually takes four or five years before they have the experience needed to work unsupervised.”
Purgiel echoed Ocobock’s sentiments about bidding on projects.
“A lot of it is that we only have so much manpower,” he said. “There are times when we would love to bid on a project, but at the moment we just can’t.”
Riley Ramoie founded Modal, Inc. in Traverse City in 2012 with more than 25 years of experience in the excavating, underground utilities, landscaping, outdoor maintenance and heavy civil construction industries.
He needs workers, too, and struggles to find them.
“So many have followed work out of state and are earning more than our market can offer so its hard to convince them to come back,” Ramoie said.
The Bureau of Labor statistics projects the construction industry will add some 1.8 million jobs nationally by 2020. Many people are not aware of the strong rebound in construction jobs and that companies cannot find the workers they need.
Steel erectors, electricians, masons, carpenters and welders are in significant demand. Additional workers are needed in entry-evel occupations, such as roofers, framers and general laborers. According to Pure Michigan Talent Connect, there are approximately 10,000 job vacancies in the state.
For many workers, construction is a learn-by-doing trade. Most workers enter the field as a general laborer and hone their skills on job sites under the supervision and tutelage of more experienced professionals who have already mastered the trade. Others follow a more traditional educational path, which may include a construction-related tech education at the high school level or a construction management program at a community college. Some combine on-the-job and classroom learning through structured apprenticeships.
However, Ramoie said it’s “hard for us as an industry” to get young adults involved in apprenticeship programs because of insurance regulations not allowing anyone under the age of 18 work on construction sites.
The field has also become very high-tech, and that’s a message that needs to get out, Nunnelley noted.
“We need to educate everyone of how the construction field includes those who create 3-D digital models of a construction site, who operate million-dollar machines that use GPS control to grade surfaces, who accurately map a raw construction site using satellite navigation systems and laser scanning,” she said.
Fedorinchik believes too many young people feel they have to attend college, get a degree and make a certain amount of money when they graduate.
Ramoie agreed, saying the industry is still challenged by the mindset of many that success later in life equates to a college education.
“Hard physical labor is looked down upon and there is a misconception that the construction trades are for the uneducated but that’s not true anymore,” he said, citing the computer systems found in new equipment as just one example of the training that is required.
Michigan Gov. Rick Snyder has also voiced concerns about the state’s need for qualified construction talent.
“Today, too few workers have the skills needed to meet the demands of employers in the new economy,” he told reporters in January. “Like many in-demand fields, the construction industry is facing a shortage of workers. One of the most common issues is the lack of knowledge that Michigan workers have about in-demand careers and training programs. We need to address this issue, as early as possible, by identifying employers’ talent needs and connecting individuals with the many unique career opportunities that are here today.”
THE NATIONAL STORY
On a national level, construction employers added 39,000 jobs in January and 308,000 over the past year, reaching the highest employment total since January 2009, according to an analysis by the Associated General Contractors of America (AGCOA).
“Contractors have stayed busy this winter and expect to keep hiring through 2015 if they can find the workers they need,” said Ken Simonson, AGCOA’s chief economist. “The list of projects is growing in most states and most nonresidential segments, in addition to continuing strong demand for apartment buildings.”
Construction employment nationwide totaled 6.3 million in January, the highest level in nearly six years with a 12-month gain of 5.1 percent, according to Simonson. Residential building and specialty trade contractors added 20,100 workers since December and 162,400 over the past year. Nonresidential contractors hired 18,600 workers since December and 145,600 in 2014.
“The combination of rapidly rising employment, good prospects for 2015 and a depleted pool of unemployed workers with construction experience means contractors may have a hard time filling jobs with the workers they need in coming months,” said Simonson. “Worker availability challenges have replaced a lack of projects as the biggest worry for many contractors.”
According to AGCOA officials, 80 percent of construction companies report that they plan to expand head counts in 2015. But they caution that 87 percent of those firms say they have a hard time finding qualified workers.
“Construction firms appear ready to add jobs this year at the fastest rate in a decade,” said Stephen E. Sandherr, the group’s executive officer. “But those employment gains depend on finding new ways to expose and prepare high school students for high-paying careers in construction.”
Builders Exchange Gets Tech Facelift
Builders Exchange (BX) of Northwest Michigan may not be well known to the general public, but to general contractors and others in the building trades it provides a valuable service that’s getting even more efficient, thanks to a new emphasis on technology and social media.
Launched in 1951, BX is a nonprofit, member-run organization funded by dues and fees. It provides contractors, sub-contractors, suppliers and manufacturer’s reps with a plan room – one of the few in the nation that is open 24/7 via key access – where they can review project bid documents.
Located at 1373 Barlow in Traverse City, the BX generally covers projects mostly in the 11 counties of the northwest Lower Peninsula. But it also includes other large projects in other parts of the state, including the Upper Peninsula.
In addition to the plan room, the organization’s 214 members can also access information on projects by visiting the newly-redesigned web site at bxtvc.com.
Recently, the group has also been active on Twitter, Facebook and other social media. Administrative Assistant Robin Hill tries to post something on Facebook every day or two. It’s often news about members, industry-related seminars or stories of general interest to the building trades.
“We’ve been on Facebook for two or three years, but we’re more active recently on that and Twitter,” said Hill.
Since the renewed emphasis on social media, the Builders Exchange has gotten some of its former members back in the ranks, according to Hill. But it’s not certain they rejoined because of the role of technology.
“We have a lot of members using the web site,” said Executive Director Ruth Nunnelley. “And since we’ve been active on social media, I’m amazed at the people who find us.”
The online plan room is available in two different levels. Level One provides a member with access to timely project info such as current projects out for bid, bid date and time, scope of work, project location, bidders list, apparent lows and addendums issued. This service is available to all members as part of their membership. Level Two gives all the services as Level One, but also allows a member to print project plans, specs and addenda. It can all be done from the comfort of a member’s office.
In 2014, BX members were involved in 1222 projects. Through the first two months of 2015, the project number was 172.