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Construction Industry

The Best Industry In The United States  |  Has Construction Remodeled its Image?

The Best Industry In The United States

  • Posted: 3/15/2005
  • By: Matt Stevens

My 17-year-old child is going off to college. She is starting ask questions about industries and careers. She has made me think further about what construction contracting has to offer her. I have concluded it is the best career a young person could choose. You may not believe it, however the facts will show our business is unmatched. It offers participants long-term tangible benefits. Many people will argue however, let me show you the many virtues our industry has. You be the judge.

Merit Based - the construction industry rewards hard work. There is no substitute. We are all dissatisfied with the work ethic today. When we find it, we reward it. Let me give you an example - a person comes to you (male / female) doesn't speak of English well but has promised to work hard and keep their nose clean. You give them a chance and 1 year later, you are glad you did. They kept their promise. Now, what will you do? Ignore them? Cut their pay? Of course not. You will increase their wages and give them more responsibility. Construction contractors reward merit.

Additionally, the industry is also. Let me show you. What is the best advertising in the construction business? A completed project on time and on budget. This speaks volumes of a contractor's savvy and diligence. Word of mouth travels fast. Excellent contractors have more opportunities for work than their lesser competitors.

Small is Big - Construction rewards the small construction firm. That is they make a higher percentage of profit. This is a variable cost business. In other words, you do not have to have "critical mass" to be profitable. Net profit statistics consistently show that smaller contractors make a higher percentage of profit before tax than their larger brethren do.

Tangible - Our industry erects monuments. Our work is visible to everyone. We can see it for decades after we complete it. Construction people show friends and relatives point out these projects. Unlike other industries, we see what we accomplish every day.

Best Earning Years Later in Life - Statistically, this is difficult to prove. However anecdotally, a case can be made. In my travels working with clients in the United States, A contractor's profitability grows over the years. I have seen increases as either percentage or gross dollars or both. Construction becomes more profitable with experience.

In contrast, the best earning years of most other industries is between 35 and 50. (Professional Sports excepted). The reason for this youthful compensation is energy, the willingness to travel, to take risks and to make extraordinary things happen. Profitable construction is based on consistent and correct processes, somewhat like the manufacturing business. The more consistently a person does the correct things, the better the outcome.

In our opinion, construction contracting consists of two components people and processes. What does an older executive have over a younger one? The knowledge and experience handling people and building projects. (They have the scare tissue to prove it!) My conclusion is a contractor's best earning years tend to be in their 50's and 60's.

No Consolidation - The construction industry is an owner operator business. Efforts to consolidate have shown the power of the small business you cannot beat an owner who is risking his wealth every day. Large firms are at a disadvantage. Again, small is big.

Local - Where can a construction company be started? Anywhere! Construction expertise is needed in all fifty states. It does not need a port facility or wide-open spaces to operate. You can start one where you live and that is family friendly. An important consideration these days.

No college degree needed - Construction people who have worked in the field for several years have the equivalent of a college degree. A majority of construction knowledge is earned while working not studying. Technically, you learn how to install quality work with your own two hands. I strongly believe that someone who has owned and operated a construction business for 20 years has a master's degree maybe even a Ph.D.

No large capital investment needed - Some successful construction firms have been started with no money. Beginning capital is not a major obstacle. This is a cash flow and variable cost business. To start, a person does not have to float an IPO or have a rich uncle. What they need to do is understand the economics and have technical expertise.

Shortage of people wanting to be in it - Industry economists agree that we still have a shortage of people employed in Construction. Conservatively, the number needed is 150,000. As we have learned in our lifetimes, the Demand / Supply curve is very powerful. A shortage of anything drives the price up. Competent people earnings have outstripped general wage increases in other industries. That is job security as well as wealth building. Ask a computer programmer or airline pilot about over supply of people and the effect on wages and opportunity.

Non-Importable - The trend of outsourcing to other countries has grown in the last several years. Take your pick: Computer Programming, Manufacturing or Engineering. Construction is insulated from this problem. Put bluntly, you cannot dig a hole in the Orient and import it into the United States. The majority of labor must be "insitu" or at the project site.

What other industry has all these attributes. The answer is none. Although, the perception persists that our industry does not have much to offer young people. It is not true. Surveys have shown people in construction do not recommend our industry to their children. We must stop this habit. I challenge each of us to promote our industry. Let the truth be told.

About the Author: Matt Stevens is a management consultant to construction contractors. He has pursued his profession since 1994. He has been active in the construction industry since high school. He works with contractors across the nation.

Taken from: http://www.contractorsblog.com/archives/construction_contracting/

Workforce Development 2005 - Has Construction Remodeled its Image?

  • Posted: 1/9/2005
  • By: Lauren Pinch

Millions of viewers tune in to watch as designers and craftspersons make over a residence into a fabulous dream house each week on major network television shows. Each program usually concludes the same way: thrilled homeowners thank not only the show´s producers, but the building professionals who made it all happen.

What does the popularity of such television programs mean for the construction industry? Could these shows, perhaps, help improve the image of the architecture, engineering and construction professions? By reaching a broad demographic, programs like American Broadcasting Company´s "Extreme Makeover-Home Edition" or home improvement cable station HGTV may be influencing viewers´ opinions about construction as a career. Some, including Fred Day, director of craft training and apprenticeship for Associated Builders and Contractors, say the industry is getting a "makeover" of its own.

"We do see the image improving greatly in the media," Day says. "The media has turned its attitude from the brawny plumber to the craft professional. Programs that rebuild homes and television role models like Bob Vila or even "Bob the Builder" are putting a positive face on careers in construction."

Timothy Lawrence, executive director of SkillsUSA, Leesburg, Va., agrees the image of hands-on jobs is improving. "All over television, people are rebuilding cars and homes. There has been a turn in the media that is making those jobs look pretty cool to kids," he says.

Participation in SkillsUSA´s vocational skills competition has grown, with 4,500 students competing in last year´s national event in Kansas City, Mo. "We are at the highest membership levels in 25 years," Lawrence says. SkillsUSA is a national organization serving more than 264,500 high school and college students and professional members enrolled in training programs in technical, skilled and service occupations.

One reason for the competition´s growth may be a gradual shift in how young people and their parents view the future job market. The old belief that going to college is the "gravy train" is fast disappearing, Lawrence explains. College graduates often struggle to find decent-paying positions or they lack specific job skills. As a result, he says, "people are rediscovering the trades," which provide the opportunity to get hired quickly, earn steady pay and move up the career ladder.

"The jobs that will be available tomorrow are in the construction, service and health care industries. Those are the jobs that have been around forever and will be around forever," he says.

Frank Taylor, a carpentry teacher at Frederick (Md.) County Career Technical Center, with 20 years of teaching experience, has sent several students to SkillsUSA competitions. He says the image is improving slowly as wages increase and contractors begin to offer more health benefits. And, skills competitions are helping to bring pride to the industry by showing off craftworkers´ outstanding talents.

"But it is going to take continuous recruitment efforts to show youth and parents the opportunities that are available in construction," Taylor says.

Matt Clark, dean of the Construction Technology Institute (CTI), a construction career education program offered by the Okaloosa County School District, Fort Walton Beach, Fla., says the academy´s goal is to change the image of what people think of as an average construction worker. "For years, people thought of construction as a second­class education," Clark says. "But we´re changing that­kids come out of our program as level­two carpenters, and many start jobs with Haskell, Hensel Phelps and other heavy­hitters."

CTI offers three learning tracks: the Autodesk Design Academy with pre-engineering and pre-architecture curriculum, the Construction Management Academy with construction technology and project management curriculum, and the National Center for Construction Education and Research (NCCER) Construction Academy for curriculum in a specific building trade. For the 2005-2006 school year, CTI received 400 applications­twice the number of students that will be accepted to the program.

Don Whyte, president of the NCCER, a non-profit education foundation headquartered in Gainesville, Fla., says the center lends credibility and quality to training programs by setting standards for what should be taught in each craft nationwide. Employers can access a student´s training credentials through the NCCER´s national registry.

The center has significantly expanded its reach­20 states have adopted the NCCER´s accreditation, and currently more than 2,000 schools use its standards. Maryland recently adopted the NCCER curriculum for the state´s Perkins Act-funded technical programs. This emphasis nationwide on licensing and certification helps construction´s reputation, Whyte says.

"The industry´s image has changed, but we still have a ways to go," he says. "With help from our "alphabet soup" of construction associations, we´ve made inroads."

Demand for Workers Outpaces Supply

Why is image so important? National statistics show that with a shortage of skilled construction workers, the construction industry must try even harder to market itself to a young audience.

Last year, Construction Executive addressed troubles brewing in the industry­as the economy recovers, the demand for skilled workers to build new projects will far outpace the supply, especially as the baby boom generation heads to retirement.

The U.S. Department of Labor´s Bureau of Labor Statistics (BLS) predicts that between 2002 and 2012, 1 million new jobs will be created for workers in the skilled trades. The trades need to fill 240,000 positions each year to keep up with growth demands and replace workers who retire or leave the industry, according to the BLS.

And, experts predict rapid residential and commercial development during the next 25 years. About half of the homes, office buildings, stores and factories needed by 2030 don´t exist today, according to a 2004 report by The Brookings Institution, a think tank in Washington, D.C. If the U.S. population increases 33 percent to 376 million by 2030, 60 million housing units will need to be built, the report says.

While the surge in volume is good news for construction executives, one question keeps them up at night: How do we attract enough workers to build these projects?

Problem: Schools Cutting Back Vocational Funding

Despite the immense job opportunities, construction struggles to attract qualified, talented individuals to vocational and apprenticeship programs, which are often under-funded. Some school districts have worked against the industry by focusing most of their energy and funding on college-bound students, Mike Henderson, president of Associated Builders and Contractors (ABC) Baltimore Metro Chapter, says.

"Everything is geared around college kids," he says. "Funding just keeps getting cut back, and these [vocational and technical] programs are given the short shrift. We´re not going to dramatically increase our numbers until we get the schools to come along."

ABC Baltimore continues to fight for a presence in education, pushing to be known and seen by guidance counselors and parents at area public schools and community colleges.

"When we talk to people about the opportunities there are in construction and show them there is a career future, then their perspective changes dramatically," Henderson says. "It´s a message that plays well, when we have the chance to tell it."

SkillsUSA´s Lawrence says that although enrollment at most secondary career and technical schools is healthy, construction trades programs at high schools are sometimes being replaced by computer classes. "It is a challenge for construction trades programs to continue to exist in the public schools with the advent of technology," he says.

Higher-Caliber Students

The assumption that construction is a low-tech, low-brainpower, second-choice career is not only damaging to the industry´s image, but untrue.

Instead, government studies show career and technical education is beginning to attract more and more high-performing students. "Today´s career and technical education programs are at a much higher level than many people think," Lawrence says. These programs often incorporate computer-aided design (CAD) and advanced estimating and project management technology.

According to the U.S. Department of Education´s 2004 National Assessment of Vocational Education (NAVE): Final Report to Congress, nearly half of all high school students and about one-third of all college students are involved in vocational programs as a major part of their studies.

"Secondary students who participate in vocational programs have increased their academic course taking and achievement, making them better prepared for both college and careers than were their peers in the past," the NAVE report says.

"Students who take both a strong academic curriculum and a vocational program of study­still only 13 percent of high school graduates­may have better outcomes than those who pursue only one or the other," the report continues.

CTI´s Clark agrees that students who take elective courses in the trades in addition to their regular course work are often high­achievers. "These are motivated, higher level students coming out. The word is, employers can´t wait for our students to come out of the academies," Clark says. CTI´s business partners throughout Florida travel to the academy to recruit the "best and brightest" in the construction trades, he says.

Richard Burt, an assistant professor in Texas A&M University´s Department of Construction Science, one of the largest accredited college construction programs in the country, shares a similar story. He has seen 100 percent recruitment for the department´s graduates, with an average of 2.5 job offers per graduate. The university offers both a bachelor´s degree in construction science, graduating approximately 150 students a year, and a 36-hour master´s program in construction management, graduating 70 to 80 students a year. Currently, enrollment is high, with more students applying than get accepted to the programs.

"The quality of our students is getting higher­several have a 3.4 GPA­and hopefully this will help the image of construction," Burt says. The problem, he says, is that the public doesn´t distinguish between a construction manager and a construction laborer when they think about the industry. While construction management requires advanced skill, people don´t rank the profession on the same status as an architect or an engineer, he explains.

"It´s going to take time to change the idea that construction is "lesser,"" Burt says.

Changing Parents´ Minds

One way to address the image challenge is to educate guidance counselors and parents who may be unfamiliar with the industry and deter adolescents from careers in construction.

Gary Bambauer, vice president of education at ABC´s Ohio Valley Chapter, helped to form the region´s School to Apprenticeship program that provides students with on-the­job training through area employers. (See story on page 22) He says parents are now recognizing "apprenticeship" as a step in a career path, rather than as simply an elective course.

"If a student can tell his parents, "I´m going to my carpentry apprenticeship," as opposed to, "I´m going to my carpentry class," that really helps the image," Bambauer says.

Gloria Bruce, owner of DSG Foundation Contractors, Charlotte, N.C., has worked with organizations like the National Association of Women in Construction (NAWIC), and the ABC Carolinas Chapter to reach children and parents even before high school.

"We need to heighten interest at the seventh­grade career exploration level, so that by the time these students get to high school, they can ask for construction programs," Bruce says. "We´ve heard before there wasn´t a demand for construction­related classes in the Charlotte/Mecklenburg high schools. But until the students know anything about construction, they can´t ask for it. They can´t say they want to participate."

Guidance counselors just don´t know enough about the industry, Bruce continues. "We as an industry need to give information to guidance counselors and parents so that if Johnny or Susie expressed an interest in construction, they wouldn´t get turned away."

As a sign of progress in improving the local image of construction, the Charlotte/Mecklenburg school system is now warming up to after-school career Skilled Trades Explorer Posts in the electrical and carpentry trades, based on the national Boy Scouts model.

Steve Guy, president of Wat-Kem Mechanical, Inc., Dayton, Ohio, agrees: "If we can reach the parents, then we have a fighting chance." Wat-Kem was one of the first companies to become involved with ABC Ohio Valley´s School to Apprenticeship program, and trains two high school students a year in HVAC and plumbing.

"I hope the image is improving," Guy says. The industry may have kept its light under a bushel in the past, when an older generation worried about job security. Now, he says, as demand for workers outpaces the supply, the industry has the opportunity to share its "well­kept secret" with young job seekers­construction is a great career.

With more attractive role models in the media, higher enrollments and higher grades in high school and college construction programs, and strong job placement opportunities for graduates, construction´s image and reputation will continue to improve in years to come.

Pinch is a staff writer for Construction Executive.

Taken from: http://www.abc.org/wmspage.cfm?parm1=2758

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