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CONSTRUCTION INDUSTRY TRAINING SURVEY Andria K. Wolfe In 1997 FMI conducted its fourth survey of U. S. construction firms with the goal of identifying training trends and practices across the construction industry. We last conducted this survey in 1992, and in the five years since, the construction industry has undergone some major changes. Emerging technology, industry consolidation, population shifts, and a shrinking labor pool are powerful forces affecting how firms conduct business today. These forces also affect the training and development initiatives that companies implement for their employees. Our survey asked questions regarding types of training that construction companies sponsor, to whom, and how much they are investing in the process. Additionally, as a new feature in this report, we looked at the status of training in the construction industry compared to that of other U. S. industries. THE 1997 TRAINING SURVEY FMI distributed surveys to 1, 784 U. S. construction firms. One hundred seven firms - or approximately 6 percent - responded. The survey consisted of 27 questions in four different categories: industry challenges, current training practices, media, and investment (in training). Typically, upper management personnel - presidents, vice presidents, or training directors - were those completing the surveys. Respondent Profile Companies were asked to identify themselves according to their type of construction work. The 107 respondents identified themselves as follows: . General contractor or construction manager (64) . Highway/street, heavy/civil, or industrial (15) . Electrical and specialty trades (28) Firms were also segmented according to their annual construction revenue in the following categories, with the number replying in that category indicated in parentheses: . $25-49.9 million (27) . $50-99.9 million (37) . $100+ million (43) SURVEY HIGHLIGHTS · As they say, "What comes around, goes around" Finding adequate skilled craft labor was ranked the greatest challenge facing the industry (36 percent) in 1997,just as it was in the 1989survey. However, it was ranked as the least important challenge for the industry in 1992,when the recession had produced downsizing, layoffs, and a surplus of skilled labor. Today's competitive business environment and low unemployment rate have again brought about a shortage of skilled craftspeople. We anticipate that this challenge will only intensify as skilled craft laborers retire and fewer qualified people enter the industry. · Competition remains one of the industry's greatest challenges Even in a growing economy, construction firms are feeling the push of competition from other companies. Large and small companies alike are striving to increase productivity and improve their competitive advantage. Poor planning and scheduling skills as well as poor communication were cited as factors further reducing productivity. · A lack of skilled people at all levels. Finding qualified people is the industry's greatest challenge. And this shortage is felt not just at the technical and craft levels or on the field; it's recognized at the supervisory/management level as well. The lack of skilled management/supervisory people was listed as the industry's third greatest challenge, following competition in the industry. · New technology, new tools for communication and training. A development not even mentioned in 1992, the use of technological innovations in the industry has increased dramatically. Many construction firms are using more communication tools - voice mail, e-mail, pages, and cellular phones - than ever before to leverage the productivity of their management and field teams. Companies are also using a wider variety of multimedia tools for training employees. For example, computers are present in ever-increasing numbers in the office, on the job, and as a training tool. CHALLENGES FACING THE FIELD Competition was ranked as the second greatest challenge in the industry. Because competition and productivity are closely linked, becoming more productive is a major concern to the survival of most companies, whether in construction or other industries. There is not a simple answer to being competitive and successful. It is a complex issue depending upon a number of factors, including recoverable lost time and planning. The Top Three Challenges Facing the Industry
BARRIERS TO FIELD PRODUCTIVITY Barriers to productivity in the construction industry identified by survey participants are familiar ones, regardless of size or type: 1. Decline of skilled craft labor 2. Poor project planning 3. Uneducated owner or owner Recoverable Lost Time The issue of recoverable lost time is obviously an important one, directly affecting productivity. Small improvements in this area will yield large increases in profitability. · Almost half (48 percent) of the respondents surveyed felt that better supervisory training would improve field productivity by 10-19 percent. Another 19 percent answered 5-9 percent improvement. · Almost half (47 percent) also felt that more effective planning would improve their productivity by 10-19 percent (22 percent by 5-9 percent). · However, when asked about the planning abilities of their project managers and superintendents, they were ranked as above average (4 out of 5) almost regardless of the size or type of company. Foremen were ranked as average across the board (3 out of 5). If project managers and superintendents typically possess good planning skills, then improvement in planning needs to take place at the foremen level. Or perhaps there is a lack of effective communication when projects are handed off from estimating to operations. · Smaller companies felt that better planning would have less of an impact on their productivity (improve by 10-19 percent) than did the largest companies, which said productivity would improve by 20-29 percent. This makes sense as larger companies reported experiencing more recoverable lost time. Planning and Productivity Another means of improving productivity through better planning is to conduct pre- and post-job reviews more frequently. Thirty-nine percent of companies say they always conduct pre-fab reviews, 37 percent do them often, 15 percent frequently, while I percent report they never do them. Less than 40 percent of companies consistently review jobs before beginning them. The statistics for post-job reviews are worse: only 14 percent of companies always conduct them, 27 percent do them often, 24 percent frequently and 31 percent seldom do them. the largest firms are most likely to do post-job reviews. CHALLENGES FACING MANAGEMENT The top three challenges facing management given in our survey are the same top three identified in our surveys for the past seven years (although the order has varied year by year). 1. Leading/Motivating- This year leading and motivating field labor rose as the greatest challenge facing management (from third greatest in 1992 and second in 1990). In the face of increasing competition and lack of skilled workers, the construction industry continues to recognize the importance of better equipping management and supervisory personnel in skills such as effective leading and motivating their people. However, only 12.5 percent of responding companies provide training internally in leadership/supervisory skills. 2. Planning and scheduling- Effective planning and scheduling ranked second in this year's survey, after being the first in 1990 and 1992. These two factors are closely related to productivity. While companies identified the need for better planning and scheduling in the survey—almost half said that better supervisory training would improve field productivity by 10-19 percent (19 percent answered 5-9 percent) and that more effective planning would improve their productivity by 10-19 percent (22 percent by 5-9 percent) - it doesn't appear companies are doing much to upgrade training in these areas. Only 13 percent of companies conduct training internally in project management techniques, and slightly less (12.5 percent) provide training in project management and leadership/supervisory skills from external sources. While companies do provide training for employees on this issue through external seminars, consultants, trade associations, etc. - planning and scheduling skills certainly merit greater attention and investment in training. 3. Effective communication- Even with the influx of new technology and communication tools - pagers, cellular phones, e-mail - good communication remains a major challenge facing management in the construction industry (as in many industries). Communication issues arise between levels of management, between management and the field, and with other contractors working on the same project. This lack of coordination with other construction companies was cited as a major factor affecting productivity. TRAINING IN THE CONSTRUCTION INDUSTRY Despite companies' recognition of the shortage of qualified tradespeople, training for supervisors/management made greater strides than did training for technical/craft personnel. Supervisory and management personnel receive 12 percent more training than employees in technical and craft fields. This increase in training for mid- and senior-level management is appropriate given it ranked as the third greatest challenge facing the industry. Senior executives and business development personnel were the most likely to receive training from external sources - in -house seminars conducted by external consultants, public seminars, and seminars sponsored by industry/trade associations. Apart from the senior executive level, most of the training provided in the construction industry is done informally through "on-the-job instruction" or is provided by a supervisor or peer. This is particularly true for craft and trade workers and smaller companies. A smaller percentage of companies offer in-house seminars by internal trainers or outside consultants. Industry or trade associations are a third source of training for employees. Enhancement or formalization of training for trade and craft workers needs to "top the agenda" in providing skilled crafts- and tradespeople. While many construction firms are providing some type of formal or informal training for employees,the importance of training seems relatively low, given the challenge of finding quality management and technical employees. Compare the construction industry's response with the status of training in other industries (as reported in Training magazine's "Industry Report 1997: A statistical picture of employer sponsored training in the United States," October 1997): ·92percent of companies provide training in management skills/development. ·9l percent train in technical skills/development. ·88 percent provide training in supervisory skills. ·88 percent have training in communication skills. ·8 l percent provide executive development. ·70 percent train in employee/labor relations. An interesting side note is the growing number of companies in other industries that offer remedial training to employees. Almost 20 percent of companies nationwide are offering remedial education in reading (40 percent), basic math (50 percent), English as a second language (5 l percent) and writing (52 percent). The larger the company, the more likely it is to provide remedial training. This type of education could become more relevant to the construction industry as the number of workers from other cultures continues to increase. Providing basic language skills to workers in the field, and perhaps training in another language to their supervisors, will enhance communication, quality of work, and productivity on the job. TRAINING BUDGETS ON THE RISE The need for training at the technical/craft and management levels is obvious, and, if addressed, can improve productivity and competitiveness within a company and across the industry. Many construction companies are recognizing this fact as overall training budgets have increased, and most plan to further increase what they are investing in their employees at both the technical and managerial levels. We measured increases in training budgets in three areas: Technica/Craft, Safety, and Management/Supervisory. 50 percent of Technica/Craft training budgets increased, with 47 percent reporting that their budgets remained the same. Only 3 percent decreased their budgets. Sixty-seven percent of highway/street companies increased their training budgets in this area, followed by 60 percent of heavy/civil companies. 69 percent increased their budgets for training in safety, with 30 percent remaining stable. Over 80 percent of industrial, construction mangers, heavy/civil, and electrical and specialty companies reported an increase in money spent on safety training. 62 percent of companies increased their training budgets for managemen/supervisory training; 37percent of budgets remained the same. The biggest companies saw the greatest increase in training budgets at 83 percent. Heavy/civil construction was most likely to increase their budget. Heavy/civil construction firms the greatest increase in overall budgets when compared with other types of construction companies. According to our respondents, planned future investment (for the next twelve months) in internal education for technical/craft programs will receive the least amount of funding. Sixty-three percent of companies surveyed said they intended to spend under $25,000. This was fairly consistent among all companies except the largest, of which 40 percent expected to spend $100,000 or more. Future Investment in Training Technical/Craft Labor While companies consistently identify the lack of skilled craft workers as a major challenge, they are investing the least amount of training dollars in this area. On the average, the majority (65 percent) of construction firms with revenues of $25-499 million reported that they plan to invest under $25,O00 in internal education/training budgets in the next twelve months for technical and craft skills. Of the largest companies with revenues of $500 million or greater, 40 percent planned to spend $10O,000 or more. Future Investment in Training Management and Supervisors For training of management and supervisory personnel, construction firms planned to invest more. The amount companies planned to invest varied according to revenue of the company. · Sixty-two percent of small firms ($25-49.9 million) planned to invest under $25,O00. · Of mid-range companies ($50-99.9 million), 47 percent planned to invest under $25,000 and 33 percent planned $2549,999; 14 percent of $100+ million companies planned to invest $50-74,999. · Twenty-three percent of the largest firms planned to invest $100,000 or more. · Electrical and specialty firms were planning to make the greatest investment, with 38 percent intending to spend over $10O,000 or more, closely followed by 33 percent of highway/street contractors spending the same amount. RETURN ON TRAINING INVESTMENT Survey respondents were asked their average percent return per dollar spent on training in three categories: technical/craft, safety, and management/supervisory. · The return on investment was consistently highest for safety training. Mid-size companies reported average returns of 20-49 percent. The largest firms reported a return of at least 70 percent. · The return on investment for management/supervisory personnel varied widely depending on company size, with returns varying from under 10 percent to 70 percent. · There was more consistency in perceived return of investment for technical/craft training, though here, too, there is great variation in responses. Forty-five percent of smaller companies responded their return was under 10 percent. Larger companies tended to report a greater return - 60 percent of larger companies reported a return of 20-29 percent. This question solicited comments, as several respondents said that they found it difficult to quantify the results of training programs. One respondent wrote, "most training is by nature vague." This shows that companies may not know how to measure effectiveness or evaluate results, particularly in management and non-technical "soft skill" training. As markets get more competitive, there is greater accountability being required of those providing training and development services. Companies need to know that expenditures for people and skill development do indeed help improve their bottom line and profitability in a competitive marketplace. While not simple, it is possible to evaluate, determine outputs, and measure the results of training initiatives. Developing and using evaluation tools and methods are steps the industry needs to take to assess training's impact and effectiveness. TRAINING AND TECHNOLOGY IN THE CONSTRUCTION INDUSTRY The availability and use of technology in the industry have increased tremendously. One noteworthy trend is the proliferation of communication and computer tools throughout the construction industry. Most companies are using communication tools - voice mail (82 percent), e-mail (73 percent), pagers (75 percent), and cellular phones (94 percent) - to improve productivity and communication. Computers, too, play a dominant role in the office, in the field, and as a training tool. Seventy-four percent reported to be using computers on the company's job sites, and 72 percent of managers are provided with laptops. Regardless of size or revenue, construction companies are beginning to take advantage of computer-based training (CBT) tools. The overall percentage of construction firms that use CBT for training is surprisingly high at 56 percent. Eighty-three percent of the largest firms have CBT available for employees as compared with smaller firms at just over 50 percent. Eleven percent of companies are using distance learning, and 33 percent provide direct access tools, such as CD-ROMs. Employees most likely to use computer-based training are senior executives, estimators, and office managers. Least likely to use computer-based training is field labor, though the largest firms are using these tools 2-3 times more than smaller firms at this level. There is incredible latent potential in these technological tools to increase productivity and provide relevant and easily accessible training to employees in the field and in the office. Better and more innovative use of these technologies may help address the difficult issue of how to provide training for job-site staff or staff at varied locations. As more computer programs are developed to meet the training needs of the construction industry and as tools become more versatile, available, and affordable, technology can be used to deliver training when and where it's most needed. STEPPING UP TO THE CHALLENGE Addressing Internal Issues for Success in External Challenges Many of the challenges facing the industry are internal issues, such as ineffective planning and scheduling, poor communication, and lack of skilled management, rather than external threats like competition and lack of craft labor. These issues could be successfully addressed through the training and development of internal employees, at both the management and craft levels. Resolving internal issues will lead to improved productivity, greater competitiveness, and new solutions for the external issues. Clearly the industry needs to focus on finding and retraining qualified people for technical and craft work. Companies may want to consider partnering with local community colleges or technical schools, offering internships, establishing apprenticeships, paying for education in return for a certain number years of work, etc. Employees could receive incentives for recruiting other qualified workers. Leverage the current communication and computer technologies as training tools. Most construction firms have invested in and are using communication tools and computers to enhance their productivity and communication. These tools, particularly computers, can be used to develop new training methods and materials and to provide greater access to training to all types of employees. Better tools and programs need to be developed to meet the particular needs faced by the industry, such as delivering training to workers onsite. CONCLUSION The construction industry is operating in a tight but growing economic market. These conditions make for fierce competition for jobs and skilled personnel. Many of the challenges that have faced the construction industry over the past five or seven years continue to be compelling issues—lack of skilled people at both the craft and management levels, ineffective planning and scheduling, and poor communication both within and between companies. It appears the industry has not taken sufficient steps to resolve these issues. While many firms have increased or are increasing their investment in training and development, it is still an underused solution for addressing chronic issues. In other fields, many companies are recognizing that their success depends on attracting and retaining valued employees. Many companies outside of the construction industry are looking to training and development to help them gain a competitive edge in a tight market. As our culture becomes increasingly knowledge- and information-based, investing in a company's intellectual capital is imperative to financial success. Training and development plays a key role in developing internal talents and improving the productivity of all kinds of companies. In general, construction firms are far behind in recognizing and implementing this important trend. One respondent reported that his company was planning to spend more in salary increases than for training as they moved more toward a "free agent" system than a "farm" system. While not uncommon, this mentality fails to see training and development as valuable tools for enhancing productivity and retaining good employees with industry experience and company-specific expertise and skills. Providing training opportunities for employees beyond the executive level enhances employee morale, skills, abilities, and, hence, productivity. Andria K Wolfe is a consultant with FMl's Management Training ~ Development Group. She has experience in the areas of communication, instruction design, assessment, and organizational career development. She can be reached in FMl 's Raleigh office at (919) 787-8400 or her e-mail address is awolfe@fminet com. Return to the List of Articles Return to the Association for Project Managers Main Page Email the Association for Project Managers
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