ITS NOT A COST, ITS AN INVESTMENT

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ITS NOT A COST, ITS AN INVESTMENT
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AGENDA

• 1. Introduction
• 2. CII Research Project RT 231
• Owners Perspective
• Two Contractor Perspectives
• 5. QA

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About NCCER
Don Whyte, President
The National Center for Construction Education
and Research, affiliated with the University of
Florida, is a not-for-profit 501 (c)(3) education
foundation and is the leading source of workforce
development resources for the construction,
maintenance and pipeline industry.

• Resources include
• Accreditation
• Instructor Certification
• Standardized Industry-Driven Curricula
• Nationally Recognized Skill Assessments
• Industry-Recognized Credentialing Certification
• Construction Career/Recruiting Resources
• Construction Safety and Front-line Management
  Education

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Panel of Presenters

• Wayne Crew, CII
• Gerry Sprentall, Intel/CURT
• Rebecca Harmon, Koss Construction
• Nicole Wyatt, Zachry Construction
• Guest Appearance
• Doug Pruitt, Sundt Construction
• 2008 AGC of America, Senior Vice President

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Construction Industry Craft Training CII
Research Team 231
Wayne Crew Executive Director Construction
Industry Institute
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Construction Industry Institute (CII) A Principal
Industry Forum

• Knowledge creation through CII research to define
  best practices, breakthroughs, and industry
  norms.
• Knowledge dissemination through CII research
  publications, implementation guides, educational
  materials, workshops, and conferences.
• Knowledge assessment of the impact of CII
  practices through the benchmarking and metrics
  program.
• Knowledge management, organization, and
  assessment of relevance of the 450-plus CII
  documents and publications.
• Through these knowledge processes, CII enhances
  the business effectiveness, sustainability, and
  global competitiveness of CII members and lifting
  the construction industry.

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NCCER Vision and Mission
Vision Universally recognized by industry and
government as the training, assessment,
certification and career development standard for
the construction, maintenance and pipeline craft
professional Mission Build a safe, productive
and sustainable workforce of craft professionals
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• The mission of CURT is to create competitive
  advantage for construction users. CURT will
  accomplish this by providing aggressive
  leadership on business issues that promote
  excellence in the creation of capital assets.

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Construction Industry Craft Training

• CII Research Team 231

Sponsored in part by the Construction Users
Roundtable (CURT) and the National Center for
Construction Education and Research (NCCER)
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What is your biggest risk?
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Lack of Skilled Labor



Behind Schedule
No Float










Late
LDs



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CII Research Team Organization
Contractor
Owner
Owner
Contractor
Principal Investigator
Contractor
Owner
Contractor Co-Chair
Owner Co-Chair
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Construction Industry Craft Training Research
Team

• Bruce Buffaloe, WorleyParsons
• Ric Carter, Fluor
• Dan Christian, Victaulic
• William Fehling, Air Products
• Joby Frame, Southern Company
• Robert Glover, UT Austin
• Paul Goodrum, U-Kentucky
• Carl Haas, University of Waterloo
• Bob Helper, Aker Kvaerner

Robert Heath, Rohm and Haas Gary Hunter, Ontario
Power Tom James, Zachry Dickie Jones, Fluor Al
Mikolas, Baker Concrete Construction Bob
Nussmeir, Baker Concrete Construction Randy
Tomlinson, Dow Chemical Jack Prestwood, Tampa
Electric Don Whyte, NCCER
Co-Chairs
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CII RESEARCH TEAM 231 Purpose and Objectives

• The purpose of this research was to identify and
  quantify the business case for construction craft
  training.
• Objectives included
• Research, classify types, and quantify costs for
  construction craft workers.
• Identify results of types of training in terms of
  high and low impact and payback.
• Evaluate tradeoffs that organizations should
  consider for training (e.g., technical vs
  leadership training and hiring costs vs training
  costs).

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Research Project 231

• Site interviews
• Data collection
• Data analysis
• Business case justifications
• TIA Tool

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Site Visits (U.S. and Canada)

• Industrial contractors and training centers
• Identified trends and issues in craft training
• Five open shop and eight union sites

Site Visit Map
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Site Interviews - Issues

• Common barriers identified.
• Most do not measure benefits of training.
• Increased compensation important to training
  completion and retention.
• Community college participation
• Training offered for individuals with English as
  a second language.
• Modularized training programs
• Employment tied to certification.

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Biggest Change in Craft Training?

• Owner Craft Skill Qualification Requirements

Compliance with these craft skill qualification
requirements is a condition to remain on the
Approved Contractor List for the manufacturing
facilities
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DuPont Engineering
Contractor craft personnel assigned to a DuPont
site are now required to be assessed and
trained with NCCERs standardized construction
and maintenance program unless they are otherwise
assessed and trained. Robert R.
Heier Engineering Manager DuPont
Engineering Facilities Construction
Support
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RT 231 Surveys

• 93 Surveys Collected
• Avg 23 years of construction experience
• 27 percent are construction site managers.
• 20 percent are training directors.
• 74 percent are construction firms and 10 percent
  are owners.
• 59 percent are in industry sector and 41 percent
  are in building sector.

Survey Map
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Importance of Training Subjects
Importance High
Low
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Formal Classroom Training with On-the-Job
Training
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Completion Rates of Formal Training
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If I invested one percent of my total project
budget for wages/labor in craft training, I WOULD
EXPECT
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Industry Company Case Studies

• The research used companies actual records to
  examine the benefit from craft training program.
• Significant benefits exist in
• improved productivity
• reduced turnover
• reduced absenteeism

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Company A Absenteeism and Turnover Data

• Workers receiving training had lower turnover and
  absenteeism rates than workers without training.

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Company B Productivity Data
Company B Productivity Performance Factor versus
Percentage of Certified Plus Craft Workers
R20.39 F value 6.478 P value 0.029
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Business Case Benefit/Cost Analysis

• Typical industrial project based on current labor
  cost and labor-loading curves.
• Scope of work includes civil, structural,
  electrical, mechanical, architectural finishing.
• 527,457 craft work-hours.
• Estimated direct labor cost of approximately 25
  million.
• Construction duration 18 months.

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Business Case Benefit/Cost Analysis
Survey Data
Typical Plant
Expected Benefit
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Determine the Baseline Cost -1
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Determine the Baseline Cost - 2
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Baseline Cost Composition
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Quantification of Benefits Based on Survey Data
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B/C Ratio by Applying Survey Data
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Further Discussion on B/C Analysis
Estimated average duration for a worker on the
project is 18 weeks.
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B/C Ratios Estimated Using Consolidated Data from
Companies A B
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Common Barriers to Formal Training -1

• Ranks of Common Barriers to Formal Training

Severity High
Low
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What is the Business Case to the Craft Worker?

• Increased knowledge and skill
• Increased pay and annual income
• Enhanced career progression and satisfaction
• Respect and professionalism

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Industry-Wide Worker Payoff?

• Among all trades, every 100 hours of training
  increased a craft worker's hourly wage by 10
  cents (RT 182, 2003).
• For electricians, every 100 hours increased their
  hourly wage by 1 dollar (RT 182, 2003).
• A skills progression program is needed for reward
  and certification.

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Training Investment Analysis (TIA) Tool

• Estimates benefit cost ratio for craft training
  using a typical industrial project.
• Microsoft Excel.

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Construction Industry Craft Training

• CII Research Team 231
• Conclusions and Recommendations

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Conclusions

• Training pays off on a project.
• Craft training is where safety was years ago.
• Effectiveness of craft training can be measured.
• Training needs to be made more attractive to the
  craft workers.

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Recommendations

• Owners should
• Require craft training on all construction and
  maintenance projects.
• Require craft training in plants where industry
  is concentrated (e.g. Houston, Baton Rouge,
  Golden Triangle)
• Mandate craft certification under common
  standards.

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Recommendations

• Owners and contractors should
• Provide comprehensive employment packages that
  include competitive wages, training, and
  benefits.
• Participate in established, confidential database
  on training certifications.
• Measure benefits of training.
• Collaborate on work force development.

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POP QUIZ

• If you invested one percent of labor cost in
  craft training on your capital project, what
  would you expect the benefit in productivity to
  be?
• A 3
• B 7
• C 11
• D 20

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The Correct Answer

• If you invested one percent of labor cost in
  craft training on your capital project, what
  would you expect the benefit in productivity to
  be?
• A 3
• B 7
• C 11
• D 20

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References

• Construction Industry Institute (CII)
  www.construction-institute.org
• National Center for Construction Education and
  Research (NCCER)
• www.nccer.org
• Construction Users Roundtable (CURT) www.curt.org

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Skilled Construction WorkforceThe Owners
Influence
Gerald Sprentall Construction Manager Intel
Corporation
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Skilled Construction WorkforceThe Owners
Influence
The potential of increased costs attributable to
a shrinking skilled construction workforce is
becoming more prevalent
Problem StatementNegative financial and
schedule impacts owners and contractors
experience due to shortages of skilled craft
workers

• Impact to IntelProductivityTurnoverAbsenteeism
  Rework

Aggressive schedules driven by crucial time to
money corporate objectives create higher than
average construction resource utilization rates
on projects.
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Implement Skilled Construction Workforce
Development Strategies as a condition of bid
qualification for Construction Suppliers.

• Create a phased approach that establishes
• Workforce development expectations with all
  construction suppliers
• Establish a specific evaluation criteria for
  construction suppliers addressing all elements of
  workforce development
• Workforce development program implementation as a
  condition of award
• Workforce development program metric used as an
  element of supplier performance management

Analogy The Safety Program approximately 15 years
ago needed this same Owner provided influence
to actively promote implementation
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Training Investment AnalysisCII RT-231 project
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Contractor Perspective
Becky Harmon Loss Prevention Compliance
Manager Koss Construction
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Koss Construction Company

• Highway Airport Concrete Paving
• Asphalt Paving
• Cold-in-place Recycle
• Cold Milling
• Medium-sized Company

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How was buy-in from top management achieved?

• Getting more difficult to hire employees with
  appropriate skills and knowledge for skilled and
  supervisory positions.
• When the right employee couldnt be found for a
  specific job, we looked internally as to who we
  could train for the position.

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How was buy-in from top management achieved?

• Have a good base of employees over the years
• Growing knowledge of the business
• Good work ethic
• Dependable and loyal
• Would do what it took to get the job done right

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How was buy-in from top management achieved?

• Koss Chairman of the Board
• Was born into the Koss family
• Worked his way up as he went to college and
  afterward (Engineering degree)
• Koss President
• Graduated from college and started as a field
  engineer.

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How was buy-in from top management achieved?

• Determine what we need
• What kind of person do we want
• Who has the traits or abilities needed
• What additional skills do they need

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Koss Investment Avenues

• In-House Seminars
• Hired Speakers/Trainers
• Outside Seminars Classes
• Equipment Dealers such as Cat/Gomaco
• American Crane Training
• Association Seminars
• Supplier Training
• Insurance Company Loss Control Seminar

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Koss Investment Avenues

• Train the Trainer Certifications
• Smith Systems Driving Courses
• Boom Truck Training (American Crane)
• CIT Program Classes (KDOT KCA Partnership)
• Support of the Kansas Construction Careers
  Coalition (KC3)

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Construction Industry Training Program (CIT)

• Partnering Agreement
• Kansas Contractors Association
• Kansas Department of Transportation
• Offers a variety of craft-worker training classes
• All KDOT Contractors and Subcontractors qualify
  for free or assisted tuition

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CIT How it works

• KDOT oversees the programs curriculum
• Contractors Subcontractors who won bids on KDOT
  work the previous year qualify for tuition
• Based on a percentage of contract dollars
• KDOT figures the dollar amounts for each
  contractor
• KCA advises contractors of amounts

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Benefits to Contractors

• Designed to give workers additional skills for
  career advancement
• Helps with employee retention rates
• Generates public awareness to attract new workers
  to the industry
• Excellent opportunity to partner with KDOT
• Demonstrates commitment to employee development
  and retention

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Types of Classes Offered

• Asphalt Basics I II
• Asphalt Plant Operator
• Bridge/Culvert Carpentry
• Construction Plan Reading/Staking/Surveying
• Crane Operator Prep and Certification
• DOT Truck Inspection
• HAZMAT Training
• OSHA Fall Protection Course

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Kansas Construction Careers Coalition (KC3)

• Partnership between the Associated General
  Contractors of Kansas, the Kansas Contractors
  Association (KCA) and the National Association of
  Women in Construction (NAWIC) to generate
  interest and promote careers in the construction
  industry through career fairs, after school
  programs and other educational channels.

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Kansas Construction Careers Coalition (KC3)

• Main Objective
• To attract new workers to the construction
  industry.

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PROBLEM

• If we wait till kids get ready to graduate from
  high school
• Students have no knowledge of possible
  construction careers.
• Vo-tech programs have been eliminated or have
  lost funding
• Students are lead away from any trades to pursue
  degree programs in spite of the fact that only
  57 of those who enroll in college will graduate
  within 6 years.

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KC3 Reaching Out

• Informing kids at an early age about construction
  opportunities through
• After-School Programs
• State Fair Learning Exhibit
• In-Class Education Tools ( Build Up, Junior
  Achievement and Block Kids)

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KC3 Reaching Out

• Partnering with high schools
• Sponsoring Construction Science Programs at
  Kansas State University and Pittsburg State
  University
• Establishing a Training Center through a
  partnership with Hutchinson Community College.
• Becoming active in local and state workforce
  initiatives

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2007 Kansas State Fair Learning Exhibit

• Over 2,000 students were exposed to construction
  crafts during the 10 days
• Children from age 1yr old to 20 yrs old
• Activities for various ages
• Able to ask questions of contractor volunteers in
  the Learning Center

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2007 Kansas State Fair Learning Exhibit

• Play Excavator
• Digging for buried treasure
• Loading a dump truck
• Sifting the sand

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2007 Kansas State Fair Learning Exhibit

• Building Blocks
• Learned how to build a stable based tower
• Challenge to see who could build the tallest tower

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2007 Kansas State Fair Learning Exhibit

• Remote Controlled
• Excavators
• Screw Guns
• Various types of screw heads
• Put screws in and took them back out of wood

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2007 Kansas State Fair Learning Exhibit

• Heavy Equipment Simulator
• Moving dirt
• Backhoe Golf
• Had to pick up golf ball and place in a bucket

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KC3 Message to Prospective Construction Workers

• Careerbuilder.com listed construction as one of
  the 12 indestructible careers in 2007.
• Need workers to build shelter to protect us from
  the elements.
• Need workers to build and repair buildings.
• Need workers to build the roads and infrastructure

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KC3 Message to Prospective Construction Workers

• In this day of outsourcing or exporting all types
  of jobs overseas
• You cannot export
• construction jobs.

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Koss Constructions Commitment

• Train current employees in skilled crafts using
  various training avenues
• Enhance career development for trained employees
• Support the efforts of the KC3
• Reaching out to students in the schools
• Volunteering with events such as the State Fair
  Exhibit

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Contractor Perspective
Nicole Wyatt Employee Development Training
Manager Zachry Corporation
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Zachry Corporation Craft Training
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• Why Train at All?

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Craft Training

• Site Training Pros
• Great morale booster
• Lower absenteeism and turnover rate
• Better qualified, better skilled workforce
• Employees see the program as a company
  sponsored benefit
• Helps with employee retention

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Craft Training

• Training Pros (cont.)
• Opportunity for National Certification
• Opportunity for employee to become
  multi-crafted
• Less rework
• Increased productivity
• Increased safety awareness
• Craft Training is the RIGHT THING TO DO!

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Craft Training

• Training Challenges
• Training Costs
• Training facilities must be planned
• Training the trainers

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Craft Training

• What we saw happen in Wilkesville
• Completed over 1600 NCCER modules in 18 months
• Ranked the NCCER national leader in modules
  completed on site at the time

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Craft Training

• What we saw happen in Wilkesville
• 4 absenteeism rate
• 11 Turnover rate for entire job
• Created a training culture

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Keys to Successful Training Program

• Qualified Instructors
• Project Manager
• Safety Professionals
• Superintendents
• General Foremen
• Foremen
• Journeymen
• Staff
• Outside sources
• Instructors are NCCER qualified through a 24 hour
  training class

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Keys to Successful Training Program

• Dedicated Training Coordinator
• This is a full time position
• Expect results
• Qualified person with a passion for education

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Keys to Successful Training Program

• Financing
• We need to correctly budget money to fund the
  Program
• Grants are available from local colleges and
  universities
• Funds may be sought from State Governments
• Costs are Curriculum and Assessments
• Instructors and Training Coordinators pay
• Classrooms and teaching materials
• Snacks and beverages

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Keys to Successful Training Program

• Adequate Facilities
• Conference rooms, offices, lobby, HR offices,
  etc.
• Locking storage cabinets for training materials
  and snacks
• Locking file cabinets for training records
• Dedicated office and computer for Training
  Coordinator

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Keys to Successful Training Program

• Recognize Student Accomplishments
• At Project Gatherings
• Hand out NCCER Certificates
• Give Promotional items

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Craft Training Program

• If you build it, they will come.

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ITS NOT A COST, ITS AN INVESTMENT
THANK YOU Questions
www.nccer.org