Transcript HBR Joint Member/Subscriber Breakfast

Skilled Labor
Crisis or Opportunity
Joint Member Subscriber Breakfast
September 13. 2007
Purpose

Report information learned at

NPRA Conference In Houston on Aug 23
 Southern Governors’ Energy Labor
Summit in Biloxi on Aug 27-28

Summarize the

Future Labor Demands in the Gulf Coast
 Challenges Facing Industry
 Possible Solutions

Encourage More Industry Involvement
Gulf Coast Craft Labor Forecast
Revised
TOTAL CRAFT WORKFORCE
65000
60000
55000
45000
40000
35000
30000
25000
20000
15000
10000
5000
Maintenance
Construction
Turn Arounds
Dec-08
Nov-08
Oct-08
Sep-08
Aug-08
Jul-08
Jun-08
May-08
Apr-08
Mar-08
Feb-08
Jan-08
Dec-07
Nov-07
Oct-07
Sep-07
Aug-07
0
Jul-07
Workers/Day
50000
Gulf Coast Craft Labor Forecasts
70,000
January 07 Forecast
July 07 Forecast
60,000
50,000
40,000
30,000
20,000
10,000
D-08
N-08
O-08
S-08
A-08
J-08
J-08
M-08
A-08
M-08
F-08
J-08
D-07
N-07
O-07
S-07
A-07
J-07
J-07
M-07
A-07
M-07
F-07
J-07
0
Golden Triangle Projects
Project
Company
Total Cost
Timeline
Labor Need
Cheniere
$1.0 B
2006-2008
1,000
Golden Pass
$1.0 B
2007-2009
600
Motiva
$4.5 B
2007-2010
4,500
TOTAL
$1.8 B
2007-2010
3,500
Valero
$1.0 B
2007-2010
2,000
Sempra
$1.0 B
2008-2010
530
$10.3 B
2006-2010
12,130
Total Projection
Golden Triangle Labor

Unannounced projects - possibly add $5-7 Billion

Commercial / Industrial Workforce
 Historically 8,000 –10,000
 Currently 10,500 –13,000
 Two to Five Year Horizon is 25,000 - 30,000
 Future Commercial Ripple Effect 2,000 - 5,000

Fulltime Positions / Attrition - 1,500 - ???

Economic Ripple Effect - 7,500 - 10,500

Residential Construction - ??? -???

Maritime / Service sector - ??? -???

Total Needs - 31,500 – 44,500
Energy Industry Outlook
 Electricity demand increasing 3% per year in South
 Most southern states must have new capacity
installed and operating by 2011 and beyond
 Over $400 Billion in new generation and distribution
facilities. NEI estimates;
 31 nuclear power plants, 27 in Southeast, 9 in
Texas
 16 new coal fired plants
 26 gas turbine & 35 combined cycle generation
stations
 3500 miles of new high v. transmission lines
 50 major retrofit projects – scrubbers, SCR’s, etc.
Energy Industry Outlook
 API estimates refining capacity will increase over 1
million barrels per day by 2012.
 SEMTA estimate 30,000 more craft workers needed
in next 4 years. Primary craft needs are PF, Welders,
BM, MW & Elect.
 50% of the 400,000 electric utility workers will be
eligible for retirement in 5 to 10 years.
 CLRC estimates 185,000 new construction workers
needed nationally to replace 95,000 retiring and for
the increased demand over next ten years.
Challenges Facing Our Industry

Unemployment currently at very low levels and the
recruiting pipeline is empty

We compete with other industries and areas for
qualified recruits.
 Energy, health care, rebuilding infrastructure to
name three other industries
 Construction image is low, particularly in
southern states, due to low wages & benefits,
working environment, perceived safety
problems, cyclical nature of work.

Skilled labor demand will be high for a very long
time, perhaps 10 to 20 years
Challenges Facing Our Industry

High School drop out rate is over 30% and much
higher among minorities

28% of 9th graders will achieve a 4-year college
degree but only 20% of U. S. jobs require this level of
education.

32% of 9th graders go on to enter an associate
degree program at a community college but 65% of
U.S. jobs require this level of education

Many students leaving high school are not “work
ready” and lack desire to do physical and outdoor
work.
Challenges Facing Our Industry



Federal and State Education requirements have
caused High Schools to drop vo-tec programs to
make room for other mandatory courses geared to
preparing students for college and passing TAKS
tests.
Superintendents, principals, guidance counselors,
teachers and parents are not aware of careers in
industry.
Skilled labor careers are considered “second class”
among many school administrators, teachers and
parents
Possible Solutions - Education
Change the Education System in Texas
 Top down & bottom up approach involving all
Owners and Contractors and their associations and
lobbying groups
 We need to influence state legislators, local school
boards and high schools to establish or reinstate VoTec programs that meet industry’s needs
 Make it O.K. and even desirable to be in skilled labor
training in High School
 Michigan Study – “at risk students are 8 – 10 times
less likely to drop out if they enroll in a career &
technical program instead of the general program.
 Start NCCER training in 10th grade or earlier. Create
an alternative track for skill based careers.
Possible Solutions - Education





Teacher standards/qualifications must allow nondegreed “subject matter experts” to teach in high
schools and community colleges.
We should encourage and provide incentives for
retired Craft SME’s to teach in HS & CC.
It’s a waste of time to only talk to students.
We need to make sure District Superintendents and
Principals are committed to supporting industry
needs. They should in turn communicate to and
expect their teachers, counselors and parents to
encourage students to consider the skilled labor
track.
Talk about industry needs as a National Security
issue and tell school administrators that skills
training increase TAKS scores and lower drop outs
Possible Solutions - Recruitment


High Schools & Community Colleges should be
expected to recruit for industry.
Step up industry marketing and recruiting efforts
 Target groups should be current high school
students, recent graduates, the underemployed,
returning military, women and minorities
 Bring in marketing specialists to help design
programs
 Create a team for each target group.
 Include young persons in determining best
approach to reach them.
 New technology might help – “You Tube” and
“My Face” – go where the youth gather
Possible Solutions - Recruitment

Aggressively recruit returning military
 More than 5000 soldiers are discharged each
week
 TAP or Transition Assistance Program - week of
training and job fairs at every military base in the
U.S.
 AFL-CIO has the “Helmets-to-Hard-Hats”, where is
the merit shop program?
 Model after the “Driller” recruiting/training
program in Casper, Wyoming
 Resources - Hireveterans.com and gijobs.net
 Former military should be the best recruits for
construction – demonstrated good work habits
and are willing to travel and work outdoors
What Industry Can Do





Owners and Contractors need to fully implement
KPA. Make room for new recruits and give them
priority if they continue training.
Owners should only use Contractors that are
engaged in Workforce Development initiatives
such as HCCI.
Require NCCER certifications for journeyman level.
Increase cents per hour to cover marketing and
recruiting costs.
Educate State legislators and agencies about
industry needs and reduce “red tape” where ever
possible.
What Industry Can Do






Talk to your school boards and attend PTA meetings
and other venues to tell parents and educators about
opportunities in industry.
Help high schools with lab equipment/facilities and
material needs.
Implement programs to temporarily use non-fluent
English workers and expect them to learn English
through industry sponsored ESL programs.
Use foreign workers as last resort.
Encourage multi-crafting and provide incentives.
Resist “labor wars” and guaranteed overtime.
What Industry Can Do






Partner with other industries (Energy for example),
other groups and associations.
Offer a future to new recruits, not just a job.
Improve worker benefits – health care, 401K plans,
etc.
Assign a qualified mentor to every new recruit to
encourage and track progression through training.
Maintain labor stability as much as possible– level
labor demand on every site and across the greater
Houston area.
Get more involved at every level