While many college graduates are often paid well as they progress into their careers, a very good living can also be had by entering the construction trades – and at a fraction of the education or training cost.
Contractors can better recruit would-be candidates by showing them compelling evidence demonstrating the strong ROI of apprenticeships, certifications and other types of training to obtain the skills needed for their chosen trade. But contractors must do more than that to attract and retain workers, particularly millennials: contractors must also find ways to let workers collaborate more on projects, as well as provide them with a clear career path – and how the firm is going to nurture their development.
ROI of a Four-Year College vs. Trade Programs
While the net present expected value of obtaining a bachelor’s degree varies between $95,000 and $275,000 — depending on the major, research has shown that within five years of receiving certifications or associate degrees, many workers in the applied or technical fields can actually out-earn many professionals with bachelor’s degrees – and some out-earn after 10 years on the job, according to the American Enterprise Institute report, “Degrees of Opportunity: Lessons learned from state-level data on postsecondary earnings outcomes.”
“If we move beyond our current fixation on the bachelor’s degree and widen the aperture to include all the postsecondary pathways at our disposal, far more educational options emerge that can lead students to economic success,” Mark Schneider and Rooney Columbus write.
The report is based on an analysis of state administrative data from College Measures on the ROI of completing bachelor’s, associate, certificate, and apprenticeship programs in Florida, Texas, and Tennessee. Schneider and Columbus chose to analyze the programs in three states to demonstrate a pattern likely seen in all states. In Florida, six of the 16 programs with the highest-paid graduates after five years are from associate degree and apprenticeship programs offered by community colleges or technical training centers.
AEI analysts also calculated the ROI of the various educational and training programs in Texas – subtracting the costs of attaining the credential from the median earnings a person would receive 10 years after completion of each program, relative to the earnings of a high school graduate.
More than half of the programs with the highest expected ROI in Texas are at the undergraduate level, including apprenticeship and certification programs. Part of this is due to the fact that these programs take less than four years to complete, are cheaper than paying for a bachelor’s degree and the costs for room and board while attending the shorter programs.
“Students, taxpayers, and policymakers need to be made aware of these alternatives to the traditional bachelor’s degree and of the fact that these pathways may more effectively satisfy students’ number-one goal: finding a good job with good wages,” according to Schneider and Columbus.
One thing to think about: if more people complete apprenticeship and certification programs and start competing for jobs in the various construction trades, employers might drop their wages, according to the report. Right now, not many people complete these programs, so their wages could be higher to account for their great demand in the workplace.
Not surprisingly, AEI analysts found that the median expected ROI is higher in technical and business-related fields, no matter which type of educational or training program in Florida, Texas or Tennessee.
“Many of the programs — bachelor’s degree or otherwise – producing graduates with high wages and ROI have one thing in common: They graduate students who know how to build and fix things,” Schneider and Columbus posit.
How Student Debt Can Hurt
A Benefits Pro article cited a survey from the Investor Protection Institute titled “Investor Protection Institute College Debt/Retirement Savings Bind,” which found that many millennials are forgoing major life purchases because of college debt obligations.
A third (29%) have delayed the purchase of a home; 26% have postponed a major purchase, such as a car; 22% have cancelled plans for additional education; 19% have had to return home to live with their parents; 17% have put off starting a family; 12% have postponed getting married; and 34% have either delayed starting to save for retirement or were forced to save less than they had hoped due to student debt. More than half (56%) say they’re worried “about having to work longer as a result of having a late start on saving/investing for retirement.”
Letting Candidates Know That They’re in Demand
For the seventh consecutive year, vacancies in the skilled trades — including bricklayers and masons — are the hardest jobs to fill in the U.S., according to Manpower Group’s 2016/2017 U.S. Talent Shortage Survey.
Why? The most common employers cite is there is a lack of available applicants. Other reasons include not enough workers have the required experience or technical competencies.
Employers are addressing the talent shortage in a number of ways, according to the survey. Nearly half are offering training and development to existing staff, 44% are recruiting outside the talent pool, 27% are using alternative sourcing strategies, and about 1 in 5 are paying recruits higher salary packages to recruits, as well as providing additional perks and benefits.
More and more contractors are offering apprenticeships to people wanting to enter the construction industry. For example, the Mason Contractors Association of America (MCAA) offers an online masonry training program database for those interested in going into the masonry industry. Those interested can search for apprenticeship programs by state and choose the best program for them.
Apprenticeship programs combine classroom instruction and on-the-job training. The length of masonry apprenticeships usually last about three years, but can last longer depending on the program. Apprenticeship training consists of144 hours of classroom instruction per year and 1,500 hours of training on the job a year. The time spent on the job, apprentices are paid half of a journeyman mason’s salary with the wages increasing up to 90% by the final year of training.
All candidates interested in participating in an apprenticeship program must be 17 years or older and in good physical condition. For most employers having a school diploma is preferred. Enrolling into an apprenticeship program can be done through a training center, union program, or mason contractor. Visit the MCAA’s website www.masoncontractors.org for more information on apprenticeship training programs.
Giving Candidates Purposeful Work, Making Sure They Stay
Millennials in particular want a very purposeful job in which they can collaborate, according to 2015 FMI Industry Survey, Millennials in Construction: Learning to Engage a New Workforce. FMI surveyed 369 individuals who work in the construction industry nationwide, including 201 millennials and 168 participants 35 years or older.
More than 50% of millennials stated their interest in accepting challenging work assignments – almost 10% higher compared to the non-millennial responses. The report also included responses from interviews with more than 20 millennials who told the researchers they are very eager to learn about all of the aspects of a project.
“When trying to engage millennials, it is important to emphasize the appealing aspects of the industry,” says one millennial survey participant. “In construction, projects are always different. By showing millennials the challenges each project offers, it provides them a sense of purpose and greater determination. The constantly changing work environment offers a more exciting route compared with the monotony of replicated day-to-day activities.”
And they want a chance to truly collaborate on projects, and not just be dictated orders, Barbara Jackson, director at the Franklin L. Burns School of Real Estate & Construction Management at the University of Denver, tells FMI.
“The young people in this industry are eager to contribute and participate,” Jackson says. “Oftentimes, standard job descriptions and policies stand in the way of them contributing at a level that would bring real value to the companies that they work for. This can result in frustrations, and ultimately people move on to more progressive firms and industries.”
The report cites examples of “progressive companies,” such as DPR Construction, which encourages employees to use a special website to submit ideas for improvements. FMI writes that this can be a good way to engage and motivate young employees in construction.
Indeed, one millennial survey participant says, “One of the main reasons why I’m with my current company is because I’m free to be creative and try new things.” The timing couldn’t be more perfect, according to the report’s authors, as emerging virtual design and construction tools and integrated project delivery methods are now requiring higher levels of collaboration within and among project teams.
“Having new, young people focused on a common purpose, effective processes, excellent communication and solid relationships will help engage workers of all ages and transform the industry over time,” the authors write.
Making Sure Candidates Stay By Giving them a Clear Career Path
Just as important, millennials want well-defined advancement opportunities, ideally through formalized career tracks within comprehensive talent development programs, according to the 2017 FMI Industry Survey: Talent Development in the Construction Industry.
“In today’s fast-changing and competitive business landscape, engineering and construction firms are vying to attract and retain the best people more than ever,” Emily Livorsi, Matt Kennedy and Andy Patron contend. “And while most E&C organizations put some level of training in place to further their talent, simply investing in training dollars is not enough.”
Progressive contractors and engineers are now recognizing the need for a systematic and strategic approach and are investing in the necessary people and resources to set up long-term talent management programs, according to the report. However in too many firms, the topic of talent development is still being tackled “in a very tactical, piecemeal manner, at best.”
“Despite rising talent shortages and high levels of recruiting difficulty, many firms don’t see talent development as a strategic priority,” Livorsi, Kennedy and Patron confirms. “Moreover, many firms acknowledge the power of an attractive corporate culture, but few intentionally measure and build such cultures.”
FMI’s survey found that the firms that are more effective at retaining employees are more committed to increasing informal feedback in the future (78% for high-retention firms, compared to 63% for other firms). These firms also plan to use coaching (67% versus 45%) and formal in-house classroom training (67% versus 57%) as tools for managing and improving performance.
“Organizations with the highest employee retention have committed to rich professional development cultures and have effective performance management processes,” Livorsi, Kennedy and Patron go on to say. “But for most firms, performance management isn’t always used effectively.”
The survey found that more than half (55%) of the respondents lack formal processes for identifying and developing high-potential employees. “This is a missed opportunity to identify, assess and develop a new generation of leaders that is willing to build long-term careers at their companies,” the authors write. “The fact that 43% of survey participants report that their firms don’t prepare a formal annual budget for training and development underscores the stark reality that talent development is still not treated as a top strategic priority in our industry.”
A major part of the problem is that many human resource departments at construction and engineering firms are underfunded and tasked with mostly administrative functions, according to the report. These departments are running decades-old operations and processes that haven’t been updated and that are rarely linked to strategic business goals.
“Looking ahead, the construction industry must redefine the role of human resources in a way that gives HR leaders a seat at the senior leadership table,” Livorsi, Kennedy and Patron state. “Tomorrow’s successful construction leaders will find ways to effectively blend the strategies, practices and processes needed to overcome people obstacles and create a sustainable competitive edge for their organizations.”
The most successful talent management program aligns employees with the organization’s overall strategic goals, clearly communicating this to employees as they progress through their careers there. Critical to success is engaging employees in the attainment of the organizations goals, and clearly showing how their engagement can specifically benefit their career progression.
Flyout Quote: “By listening to their workforces (and recruits), and by factoring in their individual career aspirations and plans, talent leaders can help create personalized development programs that strengthen the entire organization and engage the whole workforce today and well into the future,”