Coming together is a beginning. Keeping together is progress. Working together is success.” — Henry Ford
It’s no secret the oil, gas and construction industry has expanded rapidly. With that there is a growing shortage of skilled craft workers. The need for skilled workers has emerged over the past 20 years, and although we are seeing contractors and owners making strides to develop the workforce, a collaborative effort is needed to bridge the gaps we are seeing in the industry. These workforce gaps in the industry are occurring for various reasons, and it will take the joint work of contractors, owners and industry associations to make a difference.
Generation gaps
One of the causes for the industry workforce gaps is an increasing number of employees in the baby boomers generation who are eligible for retirement. Hays’ “Oil & Gas Global Salary Guide 2015” noted an increase of employees with 0-4 years of experience by 18 percent. According to “Craft Workforce Development 2013 and Beyond,” updated by NCCER, “Seventy-five million baby boomers approached retirement age in 2010, putting over half of the U.S. population over 50 years old. The quantitative gap will persist until the millennials begin entering the workforce in larger numbers.”
Skills gaps
The American Society for Training and Development identified four factors that contribute to the skills gaps: changes in the types of jobs that are in demand, slow population growth, lag in educational attainment for needed skills and the fact businesses are not leveraging their learning investments effectively. The aging workforce has caused a disparity in the number of middle-aged and skilled workers, and those left to train the new employees entering the industry.
Interest in entering the industry’s workforce
The economic instability in the oil, gas and construction industry has led to a decrease in the amount of new workforce entering the industry. In 2014, Hays’ Oil & Gas Global Salary Guide stated, “Rising costs of labor and services, coupled with only modest increases in revenues, have squeezed company profits and cash flow.” And, in turn, this has “sounded an early warning for some companies and investors alike.” Because of the downturn in the economy, numerous contractors and owners have announced workforce reductions. This volatile work environment has deterred the current industry’s workforce from staying in the industry and potential workforce from entering the industry.
What can you do to help?
Growing skill levels in our current workforce is one important step contractors and owners can take to bridge the gaps in the industry’s workforce. With the growing generation gaps, companies will have to be able to meet the needs of all generations in recruiting and training. NCCER’s craft workforce report stated, “Older age groups will prefer traditional training approaches, such as the stand-and-deliver classroom approach, while Gen Xers and millennials may prefer computer-based training.”
Creating mentorship programs is another way to help bridge the gap in skills. Teaming new employees with experienced employees allows on-the-job training and builds employee relationships. Another form of training your company can participate in is apprenticeship programs. Apprenticeships combine class-related instruction with on-the-job training and are jointly sponsored by employers and labor groups/associations. Groups such as the Construction and Maintenance Education Foundation (CMEF) have made efforts toward creating and building on craft training and apprenticeships the employers can invest in for their employees.
Investing in sponsoring your employees is a great way to grow not only their futures but the company’s capabilities. In “Decrease Employee Turnover,” NCCER stated, “Investing just 1 percent of total project labor budget in training can decrease employee turnover and increase your return on investment.” Employers can also increase employee value by cross-training. This allows employees to attain multiple skillsets to meet the needs of the project. By spending the money now to grow employees within, employers can avoid the labor shortage in the long run.
Improving the industry’s image
The negative image of the oil, gas and construction industry greatly impacts willingness to enter the workforce. Shima N. Clarke, Ph.D., PE, and Blake J. Boyd, MCSM, from Clemson University conducted the research, “Youths’ Perceptions of the Construction Industry: An analysis at the Elementary, Middle and High School.” With the students involved in their research, they found “only 2 percent of the 7-10 year olds want to pursue construction as a career; 9 percent of the 11-14 year olds want to pursue construction as a career; and only 3 percent of 15-18 year olds want to go into construction as a career.”
Improving the image of an entire industry takes the combined work of owners, contractors and industry-related associations. According to NCCER, “Contractors must take responsibility for ethical behavior, improving wages, benefits, working conditions and the general quality of life of the workforce.” This will help to enhance the industry’s image. Another important method to improve the industry’s image is working together to educate the public and youth on the industry’s commitment to safety, quality and improved working conditions. We must teach them about the numerous career opportunities and career growth capabilities.
Preparing the future of the industry
Preparing and training today’s youth for work readiness is another major factor in bridging the generation and skills gaps in the workforce. Numerous studies show contractors, owners and associations need to work together with grade school and college students to help educate and prepare them for the skills needed to enter the workforce. The Texas Education Agency and the Texas Higher Education Coordinating Board have made efforts toward enhancing the Career and Technical Education (CTE) program to meet today’s workforce demands. The CTE program provides students with knowledge, training and skills for entry-level employment and post-secondary education/training. Contractors, owners and associations can get involved by working together with participating schools to create awareness about the career opportunities in the construction industry.
Volunteering time to teach students, attending and displaying at career shows and donating funds for scholarships are just some of the ways we can all work together to encourage students to enter the industry. Another way is by creating joint scholarship funds for students to attend college and obtain degrees related to the industry. Once students are enrolled in college, strong internship programs will help develop the students’ hands-on experience and better their chances for success in the workforce.
Partnerships between clients, customers
The relationship and business practices between clients and customers in the oil, gas and construction industry will play one of the largest roles in improving and developing the industry’s workforce. One reason is it is the clients who get to decide which customers they choose to conduct work for them. An example of this would be the partnership between owners and contractors. In the Construction Users Roundtable’s research, “Skilled Labor Shortage Risk Mitigation,” it is said identifying contractors who have effective, long-term employment strategies that result in large core workforces (and the contractor to the workers) means there will always be a base of skilled labor available for the project. By owners requiring their contractors to participate in training programs and career advancement programs, they can increase the number of skilled workers on their projects as well as future projects. Owners working together to form a consistent criteria for these training and outreach programs will encourage more contractors to become actively involved in the movement.
Ultimately, working toward bridging these workforce gaps individually as a company is good, but working together as a community to address and tackle these gaps is the best solution to solving the larger workforce issues.
For more information, visit www.austinindustrial.com or call (713) 641-3400.