Giant labor shortage needs educated solution

By BOB MIODONSKI Editorial Director ALTHOUGH IT PROVIDES little comfort to this year's Giants and other contractors who face labor shortages, here's a headline from an Associated Press story in late April: "Lack of qualified workers threatens India's success." India, along with China, has become the poster child for where outsourced American jobs wind up. At countless meetings in recent years, I've

By BOB MIODONSKI
Editorial Director

ALTHOUGH IT PROVIDES little comfort to this year's Giants and other contractors who face labor shortages, here's a headline from an Associated Press story in late April: "Lack of qualified workers threatens India's success."

India, along with China, has become the poster child for where outsourced American jobs wind up. At countless meetings in recent years, I've heard construction held up as the one industry whose jobs can't be done overseas.

The point, of course, is that careers in plumbing, heating, piping and other construction fields should be more appealing to young people worried about job security. The same can't be said for manufacturing jobs done in Chinese factories or communication technology jobs done in Indian facilities.

Indeed, a Wall Street Journal article in late March cites economists who believe that up to 40 million U.S. jobs are at risk of being sent overseas in the next 20 years. That's more than twice the number of employees working in American manufacturing today, according to the article.

Interesting, then, that after nearly two decades of skyrocketing growth as an international technology center, India has the problem of running out of workers, according to AP. The article quotes an HR executive for an Indian software company who says the problem is not a shortage of people, "It's a shortage of trained people."

So, despite a population of 1.03 billion, India's employers have to go hunting for qualified employees, AP reports. The large mechanical contractors featured this month in our annual Book of Giants can feel their pain. Yet, it's not only big contractors who feel the labor pinch. The Plumbing-Heating-Cooling Contractors — National Association, whose ranks include firms of all sizes, says that 91% of member company owners rate finding qualified technicians as an important business issue.

20% of contractors say they poach employees from other contractors.

The Giants say the lack of human resources may be the one obstacle holding back the nonresidential construction market, outside a few specific industries and geographic areas. The CEO of the No. 2 Giant on our list echoes the Indian HR executive when he says his problem is finding enough people with specific skills, including project managers and supervisors. Another-CEO says his company is accepting-only work where it can put qualified-people on the job so that quality doesn't suffer.

Complicating the situation, another CEO tells us, is that construction management firms are trying to lure away mid-level project managers and supervisors to run their mechanical, electrical and plumbing projects. About 20% of contractors in a recent survey by consultant FMI say they poach employees from other contracting firms to address their manpower shortages.

The industry clearly needs more innovative, long-term solutions. An economist quoted in the Wall Street Journal article, who doesn't mention construction specifically, says that the American education system should be retooled to train young people for jobs that can't be easily shipped overseas. He further suggests that the government give tax breaks to reward companies that create jobs that stay in the United States.

Both ideas are worthy of serious consideration. In fact, members of the plumbing and HVAC community met in April with representatives of the U.S. Chamber of Commerce, American Association of Community Colleges, and U.S. Departments of Education and Labor to discuss an initiative that would enhance career and technical education in this country.

The idea is to blend academic and vocational education in the context of a career that would make construction more appealing to young people as well as educators. We encourage the industry to move forward with this initiative, including a national summit on workforce issues, which could take place later this year, according to Gerry Kennedy at the PHCC Educational Foundation.

More innovation also is needed to bring a greater number of nontraditional workers into the industry. FMI's report cites methods that contractors use to recruit women, military veterans and others. One Giant tells us that he has brought in workers from Europe and Caribbean islands to fill positions.

The industry must do more to include legal immigrants to address labor shortages. While many jobs in other industries are being sent overseas, people born outside the United States who come here still view construction as an industry of opportunity.