According to the Bureau of Labor Statistics, demand for construction workers will grow 13.3% by 2010. Where will that work force come from?
Due to the softening economy, many remodelers say they're receiving more unsolicited employment inquiries. But experts say that situation is temporary. "We're in a lull with the economy right now," says Dan Bennett, president of the National Center for Construction Education and Research (NCCER) in Gainesville, Fla. "But when the economy turns around we'll have huge shortfalls in every craft out there."
According to Dennis Torbett, vice president for apprenticeship of the Home Builders Institute, the work force development arm of NAHB, the labor shortage is at the top of the list of business issues affecting members.
"For the past five years it's been a critical issue affecting our industry," he says.
Craig Plekkenpol, president of Plekkenpol Builders in Bloomington, Minn., has been in business for 32 years. He says in the 1970s and '80s, a help wanted ad in the newspaper would bring in plenty of qualified responses. From the late '90s to the present, however, he says it's more difficult to attract new employees. "You have to sell yourself in the want ads. I use large type and spell out all our benefits. I've also put up a help wanted banner in front of my building," he says.
The labor shortage has a high price for small businesses. Many remodelers have not been able to expand their companies due to the lack of skilled labor. Lead times at T.W. Wallace Construction in Arlington, Va., have increased to 14 months -- up about six months from a few years ago. Owner Tim Wallace says the delay is caused by his manpower shortage, as well as that of his subs. "With that long of a lead time, you lose work," says Wallace, because homeowners often turn to the contractor who can start the earliest, whether or not the company is qualified.
Linda Holmes, president of Creative Carpentry Remodelers, Aurora, Ill., has also seen an increase in lead time, from four to seven months. She decided to risk losing the work by asking her customers to wait rather than risk her reputation by hiring an unqualified employee.
Atlanta remodeler Chuck Brownlow says his subcontractors have the same labor issues and often subcontract work themselves. Brownlow, who is president of Brownlow and Sons in Atlanta, says his job costs have increased because his project managers have had to constantly follow up with subcontractor crews to make sure they are doing the job correctly.
Any solution to the labor shortage involves reaching three critical goals. First, the industry as a whole has to find new avenues to recruit employees. These should include immigrant populations, as well as subcontractors, suppliers, and the Internet. Second, individual businesses need to retain employees by offering a combination of good wages, health benefits, bonus programs, training, and retirement plans. Finally, remodeling professionals need to garner industry-wide support to redefine America's view of construction workers and make careers in remodeling and building appealing to the next generation.
The skills Plekkenpol looks for in his personnel may help explain why it's so hard to find employees. "Remodeling tradespeople must work on homes built by different builders, during different periods of history, built to different codes, with different materials and techniques," he says. Plus, "they must have the ability to adapt to a new family or customer for every job." There are, however, specific places a remodeler can look that increase the odds of finding an employee who fits those needs.
Schools. To tackle the difficulty in finding these employees, Plekkenpol formed a cross-departmental recruitment and retention committee that meets quarterly. The committee decided to recruit from a local trade school. They first sent older carpenters, but they found that the previous year's graduates who now work at the company were more successful recruiters. Plekkenpol also offers his employees $700 for each recommended employee the company hires who stays at least 90 days.
Referrals. Tim Wallace has offered $500 to suppliers and merchants for each job candidate they send him that stays on staff for six months. So far, the few candidates he received have not stayed that long, but the lumberyards and suppliers are still on the lookout.
Most of The Turnage Company's employees in Jacksonville, Fla., come from referrals. "About 80% of my workers were a referral from someone who worked here," says company president Tom Turnage. He recently interviewed someone who was laid off from a local remodeling company due to a slow down. "That kind of networking pays off," he says. Turnage refuses to recruit someone until they've left their previous company.
Plekkenpol also thinks it is unethical to actively recruit from competitors. "We all have to live and work in the same community," he says.
Holmes says she shares potential employees with her competitors. If she receives a resume from a carpenter who lives 25 miles from her work area, she'll pass his name to a closer remodeler. "I can hire him but how long will he really stay if he has to commute so far every day?" Holmes asks.
Small businesses. Remodelers like Jim Mirando in Harrisburg, Pa., look for employees from a pool of craftsmen who have run their own businesses. Four of his employees previously owned their own firms. "They may want to simplify their life and just work on one aspect of what they used to do at their company," says Mirando, president of Excel Interior Concepts and Construction. They make great employees, he says, because they understand the big picture and can anticipate problems.
Peter Scalera of Construction Resource Group, New Fairfield, Conn., says in most cases, he can pay small operators more than what they make running their own companies. "I've found four key employees that way," he says. One was a carpenter who had worked independently for five years and asked Scalera for advice on growing his business. Instead of giving him management tips, Scalera offered him a starting salary higher than the $35,000 he made the previous year.
One drawback, Scalera cautions, is that previous business owners could take what they learn from you and your company and restart their businesses.
Plekkenpol also says he's wary of hiring former business owners, but for another reason. "They tend to have ingrained habits and don't always adapt to our company culture. Many times these habits might be related to why their business failed," he says.
He is still open to former business owners, but he asks focused questions to gauge how they will work in a team environment and work within the company culture.
Immigrant communities. Tim Wallace found the best source of employees in the Virginia area to be the Hispanic immigrant community. He has hired three workers over the past two years from advertisements in the local Hispanic paper. "There seemed to be more people in the Hispanic community who were willing to work in construction," Wallace says. One person Wallace hired as a mid-level carpenter is on his way to being a full-fledged carpenter. Another was hired as a laborer/helper and is becoming a mid-level carpenter. "We had to teach them skills, especially because our methods are different from those they learned in their home country," Wallace explains. He says the employees who have stayed with the company have shown a willingness to learn.
It also helps to listen to their needs. To show his level of commitment and develop loyalty, Wallace says he sponsored the two Hispanic carpenters still with his company and paid for their legal costs to apply for permanent residency. He also offers payroll advances and interest-free loans to help them purchase cars or trucks and will pay for English classes for employees and their spouses. In the meantime, he's learned some Spanish.
Brownlow has found a source of skilled workers in Atlanta's Bosnian community. The World Relief Organization contacted him in the 1990s about placing stone and brick masons, plasterers, and painters. The WRO had seen an ad Brownlow ran in the Atlanta paper and offered to send him war refugees. He now has 20 Bosnians on staff and promotes his company in the Bosnian community. "We are adding a story about them to our Web site and including pictures," Brownlow says. He says the site gives current employees something to show their family and friends.
Plekkenpol says immigrants represent a significant portion of lower skilled trades in new construction. The workers he's hired for remodeling have been integrated into the general population and have strong personal and communication skills. "Some amount of that work force is overqualified for what they are doing. For example, there are skilled carpenters hanging drywall because they don't know English," he says. His local builders association is teaching immigrants English, construction terms, and safety skills.
Hiring immigrants may not be for everyone. Linda Holmes says there is a large Spanish-speaking community in her area, but she has not actively recruited there for two reasons. First, she requires documentation that they are in the country legally, which many cannot provide. Second, many don't have good English language skills.
"Our clients are not comfortable if they can't communicate with those doing work on their home," she says. She adds that her company's new hires need strong English skills because they go through extensive training by working with several different lead carpenters. "It would be difficult to set up and manage if they didn't have good communication skills to start," she says.
Prequalification. It's expensive to make a hiring mistake, so Ron Cowgill, president of Damp;R Services, Glenview, Ill., is working on a program to prequalify field workers. It will test framing, drywall, trim, and electrical skills in the shop and will include a written portion with questions similar to those on NARI's CLC and CR exams. Cowgill hopes the testing cost of $500 will save his company the time and money spent on employees they let go after only a few weeks.
Industry-specific Web sites seem to help in the search for qualified employees. Scalera has had positive results from the few months he's been running ads on woodworking Web sites. "People that look at the site are in the industry and serious," he says. One site in particular, woodweb.com, has been helpful in recruiting employees for his cabinet shop. Also, the NAHB recently launched a Web site, buildingcareers .hbi.org, that matches job seekers with likely employers.
Biba Djodjevic, office manager of Wallace Remodeling in San Francisco, stopped running newspaper ads and turned instead to a local Internet listing called Craig's List and a California online job bank, CalJobs. "Everyone who answered had qualifications or at least were in the field," she says.
It's important to remember that construction skills aren't everything. After all, they can be taught. Mirando prefers to hire someone with the right attitude. "I'd rather hire someone who is intelligent and has good communication skills and teach them technical skills," he says.
Tim Thompson has considered starting his own training program. "Good companies will have to develop a program -- an intentional way to bring in people -- and take five years to train them and promote them," he says.
It is, of course, imperative that once employees are hired, they stay at the company. The right mix of salary and benefits can facilitate that, as well as a list of non-measurable qualities good employees are looking for.
Plekkenpol says today's work force is more mobile than yesterday's -- they'll go where they find the best company. "All employers have been forced to react by paying well and offering good benefits," he says. "Those things become a given."
Back in Virginia, Tim Wallace says steady work has kept many of his key employees at the company for 12 years. "My guys have not missed a day because we didn't have work," he says. "I also empower them -- they dictate what they do." Once Wallace sells a job, the production crew completely takes charge and orders materials, sets the schedule, and completes the work.
When Djodjevic's company had layoffs due to a slowdown last September, her company took care of its employees. "They found temporary employment, but we continued their benefits until we were able to hire them back," she says.
Creating an environment where workers have clear goals and are constantly learning also keeps them at the company. Mirando says the company's award-winning projects and reputation for high-quality work make his employees proud. "Anything that makes us more professional makes us more attractive," he says.
Plekkenpol set up mentoring relationships where young apprentices learn from and bond with more experienced workers. Productivity suffers because of the teaching time, but the cost is worth it in the long run. "We've paid two people for the day and gotten less work done," he says. "But if we teach them today, the next time we have that task, he is not just carrying plywood, he is an assistant," Plekkenpol says.
Insurance restorer Tim Thompson and a few members of his Business Networks BN10 group use a job hierarchy system called the "matrix" that ties job descriptions and skills to pay raises. "There is no question it keeps employees here," says Thompson. "The level system gives them a clear indication of what they need to do to move up. Morale is higher than it's ever been -- especially in the field."
Employee reviews are based on evaluations by co-workers at higher levels who grade communication, paperwork, and trade skills. The employees find having six or seven peers evaluate them is fair, and they like how the company promotes from within. "We've pulled five of our six main management personnel from the field," Thompson says.
The company has ceremonies for employees who move up a level and prints the new job title on employee name badges. The system also helps the company more accurately calculate labor costs on jobs. Though Thompson and his networking group are insurance restorers, he thinks the system could work for any remodeling company, as long as it is growing and creating opportunities for promotions.
Thompson also uses the matrix to hire new employees. He asks them to grade themselves based on the criteria, and the interviewer also grades them. They choose a level, then the new employee works with all the company's highest Level Five workers for one month each. Each Level Five has input and together they decide if the employee stays, goes, or is on probation.
Besides hiring and retaining good employees, remodelers and the industry as a whole will have to work to change the image of construction professionals and educate today's youth about career options in residential building and renovation.
Mirando says many of today's youth are encouraged to attend college, even though they might be happier working as skilled craftsmen. "But higher pay due to shortages may make educators rethink their advice," he says.
Plekkenpol says his association has had a trade recruitment and development committee for six years. They run a construction training program with the area school districts where juniors and seniors receive on-site training and mentoring with local builders and remodelers. "We produced two videos, one on the local and one on the state level, that are distributed to high school counselors around the state," he says. They also developed a Power Point presentation for students and parents.
The Home Builders Institute is working on several different levels to change the image of construction to attract more students. They have student chapters and provide members with recruitment materials and videos for participation in job fairs. NAHB recently released a CD-based educational game that's designed to get middle school students excited about home building. The association has distributed over 8,000 CDs to educators and NAHB members who sent requests for the free CDs through the Web site, www.homesofourown.org.
The National Association of the Remodeling Industry recently completed the Certified Remodeling Carpenter (CRC) pilot program in Chicago-area schools. NARI is running leader training to bring the CRC program to 16 chapters. The association also partnered with a public school to develop high school training for the CRC certification.
Cowgill participated and said the student had one year of technical training, then spent a few hours a day on the jobsite for class credit. He says the program is a step in the right direction.
Hiring and Sponsoring Immigrants
Remodelers need to make sure every employee correctly fills out the I-9 form. Pay close attention to the documentation presented along with immigrants' forms, because many immigrants have different documentation than U.S. citizens.
Remodeler Tim Wallace advises employers to scrutinize everything. "Make sure they have their proper paperwork. If you're not sure, then the local INS office can help you," he says. He has encountered problems with documents that have an invalid Social Security number. "With today's printers it's easy to get good forgeries," he says.
Immigration attorney Ann L. Lamdin of Corbin Schaffer amp; Aviles in Severna Park, Md., says the INS pays particular attention to enforcement in industries that have a high percentage of foreign workers, including construction, restaurants, and manufacturing companies. The INS offers employers a handbook to answer questions about the forms and shows samples of acceptable documents. "The handbook (INS form M274) has photos of documents that are acceptable for employment applications," she says.
Sponsoring an employee for permanent residence takes a lot of dedication. As part of the process, Tim Wallace had to show he had a financially stable company and prove he could not hire qualified U.S. workers. In his search for skilled carpenters, he says, he had to document the lack of qualified respondents. He also referred his employees to immigration attorney Luis Salgado and helped his employees with the legal fees. Salgado, of Salgado and Associates in Washington, D.C., says even with his firm's expertise and experience, the permanent residence process takes about three years.
A common misconception, Lamdin says, is that the employee can work while the labor certification application is pending. "The employee can't work for you unless he or she has valid work authorization," she says. There are a variety of ways to obtain temporary work authorization. Lamdin advises that employers study the legal ramifications before they sign on as a sponsor. And be prepared for red tape and delays. She says the Department of Labor may not work on a labor certification application until 18 months after it's been filed.
The INS delays are similar. "It can take a year or more for an employer-sponsored immigrant visa application to go through," she says.
INS Hotline: (800) 357-2099; www.ins.usdoj.gov