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March 27, 2008

Construction training is good for your bottom line

  • Researchers have found a 1 percent investment in training returns an 11 percent hike in productivity and a 27 percent decrease in injuries.
    • By SANDRA OLSON
    CITC

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    Olson

    Craft employee training is critically important to construction owners, who expect workers to have the knowledge and skills needed to complete their projects in an effective, efficient and high-quality manner.

    A preponderance of evidence demonstrates that training pays off. A recent study conducted by the Construction Industry Institute research team at the University of Texas at Austin supports that theory.

    Researchers visited training centers in the U.S. and Canada and did an exhaustive literature review, according to team leader Ric Carter, president of Fluor Constructors International. They found that a 1 percent investment in training netted benefits on both capital and maintenance projects, ranging from an 11 percent hike in productivity to a 27 percent decrease in injury rates. The purpose of the research was to identify and quantify the economics and business case for construction craft training.

    [enlarge]
    Trained workers have an EMR that is about 20 percent less than untrained workers.

    The survey also revealed that once a company invests in a craft worker’s skills and capabilities, it is likely to retain the worker. In one study that was part of the research, team members found that one firm cut turnover rates drastically, from 7 percent among untrained workers to 0.6 percent among trained ones.

    Information supplied from construction firms included estimated effects on productivity, turnover, absenteeism, injuries and rework. The results are based on responses from more than 90 completed surveys. They estimated improvements in all categories.

    Few do the math

    Training pays dividends to employers by also lowering their safety-related EMR (experience modification rate). These double-digit returns represent increased productivity, reduced absenteeism and less rework. Unfortunately, few companies do the math.

    Enhanced craft training is where safety was 15 years ago. Safety improvements gained much attention then and the results are evident today. Safe work practices are directly reflected in a company’s EMR rating. Department of Labor and Industries statistics show a correlation between companies that train their employees and companies that don’t.

    The experience factor paid by the contractor for each hour of work is benchmarked at 100 percent of the respective crafts rate. When a contractor’s jobsite safety record is better than average, the workers’ compensation rate he or she pays for each labor hour drops below the 100 percent benchmark.

    For untrained employees, contractors will pay on average 0.98 percent of the specifically stated rate for every hour worked by each employee in workers’ compensation. For every employee who is trained, the contractor will pay a reduced rate of 0.78 percent. That alone is a cost savings of 20 percent per employee. As an example: A contractor who trains and has 75 employees on his payroll could save $25,600 per year if the benchmark rate for his craft is $1.00 for each hour worked.

    The Business Roundtable report “Confronting the Skilled Construction Work Force Shortage — A Blueprint for the Future” recommended “owners should only do business with contractors who invest in training and maintain the skills of their work force.”

    In 2004, the Construction Users Roundtable made a stronger and more specific recommendation to owners: “As they did with safety, owners should require contractors to invest in training and maintain the skills of their work force as a condition of employment.”

    Safety as a requirement

    Today it is virtually impossible for a contractor to do business with an owner without a proven record of safety performance. Like safety, a preponderance of evidence demonstrates that training pays off, as indicated in the analysis from the Construction Industry Institute study as well as others.

    Research team member Randy Tomlinson, a senior piping engineer, noted the industry clamor to “show me the money” adding, “We’re here to make it real for you. We want the numbers to tell the story.”

    The results indicate a high return if craft workers are given the opportunity not only to become engaged, but to progress through a formal craft training program. The longer that craft workers are trained, the greater the benefits that accrue to the company and employee.

    Sandra J. Olson is president of the Construction Industry Training Council, a nationally accredited, state-approved apprenticeship and craft training program dedicated to training, developing and retaining a skilled construction labor force.


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