According to data from the National Electrical Contractors Association, 7,000 new electricians join the industry each year, but 10,000 retire from it, leaving contracting firms and their customers struggling to manage a net deficit of skilled labor. This situation has been further compounded by the steady growth of construction activity nationwide, which, according to the U.S. Bureau of Labor Statistics, will create an increasing number of opportunities for electrical contractors/electricians—to the tune of an estimated 85,000-plus unfilled positions by 2024.
How are contracting firms navigating the current shortage of skilled labor as it relates to training? In Western Pennsylvania, executives at several different-sized contracting firms shared their insights about the unique market conditions in their area, their training priorities, and the strategies they are employing to help maximize their resources and enhance their team’s skills.
Tight market expected
According to Chad Jones, executive director of NECA’s Western Pennsylvania chapter, Pittsburgh and its surrounding metro area will soon feel the squeeze caused by labor shortages.
“We’re preparing for a shortage of labor, but it hasn’t hit us that hard—yet,” he said. “We’ve historically been an industrial town, but more large finance, technology and healthcare companies have recently developed in our area. Among those, Uber, Google and Apple have all opened locations here, and they’ve driven a lot of new construction. We’re fortunate to have a large group of qualified contractors in our area, but all of these projects will be competing for the same labor pool.”
As such, he believes there will be an uptick in labor rates in Pittsburgh for the next two to five years.
“There’s a real focus on attracting qualified talent to the electrical contracting industry right now,” Jones said. “Our contractors are facing this reality internally in their own companies, and we’re facing it as a group with our labor partners as well. For individuals who are eager for a great career with many options, the electrical industry can provide that right now.”
Hanlon Electric is an 88-year-old contracting firm based in Monroeville, Pa. It has long prided itself on its role in “powering Pittsburgh’s signature projects.” Michael Hanlon, president of the firm, agreed that the challenge is on for his firm and other area players.
“Pittsburgh has been a little bit behind the rest of the country in terms of experiencing the brunt of contractor shortages, but with the amount of work we all see coming up, things will definitely get tighter, and we’re expecting a shortage of electricians,” he said. “We can find and train project managers and estimators, but finding four-to-five-year trained apprentices won’t be so easy. As a result, all contracting firms are going to need to make smart decisions about what they’re doing and the kind of work they’re taking.”
Large firms, such as Canonsburg, Pa.-based Lighthouse Electric, also expect to be impacted as construction activity picks up this summer. The company employs some 500 electricians.
“Because it involves a long-term training process, journeymen/wiremen are the hardest spots to fill, and the rest of the country where we’d pull talent from is also busy with greater construction activity,” said Todd Mikec, president, Lighthouse Electric. “As a result, we anticipate competing for labor in a limited labor pool, though we know that our partners at the IBEW will support the effort as best they can. The goal for us is to participate in projects where we can add value, not just compete on price.”
The training imperative
When it comes to adding value and participating in the more lucrative parts of the contracting industry, training and qualifications are the differentiating factor.
“The price of material is what it is, so what it comes down to is how well-trained and qualified your people are,” Jones said. “Leadership in both the contracting firm and at the field level will be key to capitalizing on all of the opportunities that will present themselves in the marketplace.”
Training is a priority for ECs across Western Pennsylvania, especially safety training, but they’re investing in other areas as well. For Ferry Electric, a medium-sized contracting firm founded in 1926 and based in Pittsburgh, this has involved embracing advances in technology.
“You can’t get complacent, especially as a legacy firm, and we pride ourselves on promoting a culture that’s receptive to change and dedicated to doing things better and smarter,” said Jim Ferry, Ferry Electric president. “We’ve definitely started to implement and train in technology in the field—knowing that it’s going to be hard for us to find available people to do the work in the future, tools like building information modeling [BIM], CAD and prefab activities all enable us to achieve more efficient operations and level out the manpower curve.”
Ferry Electric has employed many strategies to move hours out of peak-manpower times.
“We took an excellent foreman of ours from the field and moved him into the prefab shop so that he could support all of our jobs and all of our other foremen by either assembling materials there or coordinating that process at the manufacturing level,” Ferry said. “We’ve also implemented iPads for all of our foremen and have trained them in that technology such that—except for some packing slips and physical sign-off forms—there’s really no paper between the field and the office that we haven’t replaced electronically. And thanks to our investments in BIM training, we’re able to move our manpower curve to earlier months, even before the other trades come in. We’re able to do rough-ins earlier because we know where we’ll be working.”
Ferry’s company also is testing a piece of wearable technology that shares built-in drawings and prefab layouts, enabling team members in the field to access this information hands-free while working.
Mikec said technology training has become a key focus at Lighthouse Electric, as well.
“We train new and core employees alike in everything from planning, AutoCAD, and more in order to go paperless and stay ahead of the curve,” Mikec said. “One of the biggest things for us, however, has been standardization of processes in the office or field installation. In the field, we have a parts list and have standardized on a particular junction box or bracket, for example, so that our team doesn’t have to retrain on different products. We like to standardize on one method at a time so that our team knows what to expect and how to handle it.”
Lighthouse Electric also has brought its planning/layout function in-house—it was previously done at job-site offices—which has helped to deliver a standard and improve efficiency.
Meanwhile, Hanlon Electric has gotten more selective with the types of work it takes, and it has been investing more in training young project managers and estimators.
“Finding people with the right qualifications and feel for construction can be difficult, and since we have a younger contingent in our company anyway, it made sense to train them in those specialties,” Hanlon said.
The Hanlon Electric team also trains on a range of software and capitalizes on product training offered by manufacturers and other resources.
Electricians training and working in Ferry Electric’s prefab shop, an area that helps the company level out the manpower curve.
Some words of advice
The Western Pennsylvania ECs shared some tips for training and navigating the current shortage of skilled labor.
Look ahead: It is often difficult for contracting firms to look for and train in other markets when their existing business has benefitted them. However, it may be imperative.
“Firms should take a hard look at the markets they’re in,” Jones said. “Have they carved them out such that they’re protected and can compete, or should they staff and train for a market that might provide more opportunity in the future? In Pittsburgh, there’s never been a better time to re-evaluate your approach to a changing construction market and identify competitive advantages for your company.”
Keep an open mind: “We recently purchased and trained on a robotic total station to use on projects, which allows us to compete with larger, more sophisticated firms,” Ferry said. “It wasn’t my idea, but my team suggested it as a way to move hours out of peak. Ultimately, I help navigate our direction, but it’s about the whole team collaborating to achieve our objectives and plot our course. So if something makes sense and will make us better, we’re open to it.”
Focus on the customer: “It’s important to be customer-centric,” Jones said. “Contractors really need to listen to and hear their customers and then create solutions—that’s the end goal and where you become the most valuable. If contractors can look at their market and truly listen for a new opportunity, they can potentially create a whole new market.”
Be prudent: “You have to be cautious of the obligations you’re taking on for the business in terms of having the resources you need to complete projects,” Hanlon said. “Otherwise, you’ll have to pay top dollar and overtime if you can’t get the skilled manpower.”
Invest in technology: “The labor shortage will be an on-going issue that may not be fixed for some time to come, so it’s helpful to investigate ways to automate things and take some of the manual labor out of processes,” Hanlon said.
For this reason, technology is a priority at Lighthouse Electric.
“Embrace technology and learn how to use it to make the most of every man-hour you spend,” Mikec said. “Being able to view and work with drawings electronically shortens the planning and estimating process, and though it can be intimidating at first, it’s definitely scalable to any-sized firm.”
Promote the industry: Mikec said the industry needs to up its game and change how the industry is perceived by younger talent. Hanlon agreed, and said the sales pitch should actually be quite simple.
“There’s not a lot of places where you can have your education paid for and come out making a nice salary,” Hanlon said. “This is just the beginning; the opportunities beyond that are endless. The uptick in construction activity that we’re seeing in our area will help contractors here for the next five to seven years. These opportunities will hopefully generate interest and help attract more people to the industry. ”