In Rhode Island, the construction industry has two connected challenges. Aging infrastructure and population growth is driving demand for tens of billions of dollars in new construction. At the same time, the mass retirement of baby boomers is underway and the industry is witnessing the exodus of a vast pool of talent, know-how and experience.
The industry’s most respected experts uniformly predict
- severe, imminent skill shortages,
- continuation of a precipitous decline in craft labor productivity that has already been occurring due to decreased training.
Hand in hand with these issues come related problems with quality, cost, safety and other concerns triggered by inadequate skill supply.
Apprenticeship Utilization Programs (AUPs) provide a reliable tool for ensuring that participating projects are staffed with qualified labor, while also promoting effective workforce development needed for the future. The AUP strategy promotes the interests of all industry stakeholders, including project owners, contractors and workers.
Requiring project owners to meet certain craft labor training requirements as a condition of bidding or performing work allows a project owner to protect its short-term interests in securing successful project delivery on immediate projects while also promoting its long-term interests in future workforce development. When such requirements are implemented through specifically defined apprenticeship utilization criteria, the project owner has greater assurances of reaping the maximum benefits from such programs and ensuring successful workforce development.
Time Tested Training
Formal apprenticeship programs have long been recognized as time-tested training vehicles and the construction industry’s most effective approach to providing skills training to craft workers.
The advantages of these programs are widely recognized throughout the industry. As the Rhode Island State Apprenticeship Council explains, apprenticeship programs provide:
. . . an effective and time-honored way to help sponsors build a skilled, competent workforce [through] a combination of on-the-job training and related classroom instruction in which workers learn the practical and theoretical aspects of a highly skilled occupation.[i]
One reason apprenticeship training is successful is because the programs must be carefully designed to ensure quality control and administered in accordance with these established federal and state apprenticeship standards. Among other things, these standards do not allow apprentices to advance from one level or year to another within a given apprentice training program, and hence move up to the next higher level of pay, unless they successfully meet the requirements and pass applicable skill tests for each level.[iii]
Earn While you Learn is Accessible for Workers
Apprenticeship training is also successful due to the “earn and learn” approach incorporated into these programs. A study by the U.S. Department of Labor’s Employment and Training Administration explains:
Adult learners with families and financial obligations frequently are unable to stop working while they gain additional education or workforce skills. Young adults may not be able to go to school full time without the benefit of a job. Registered Apprenticeships are ‘earn and learn’ opportunities and provide access to education and training that may not otherwise be accessible to many adults.[iv]
Benefits of Apprentice Utilization Programs
Expansion of skills training in construction will not occur without the project owner community taking the lead and driving the change. Project owners and facility managers who take such action and begin to adopt Apprentice Utilization Programs, can reap valuable benefits for their construction programs by:
- Securing a more reliable and better trained craft labor force to meet their immediate construction project needs;
- Achieving cost, productivity, schedule and safety advantages through the use of a more highly skilled workforce; and
- Promoting long-term workforce development in the skilled craft labor trades needed to address future project needs.
Apprenticeship Programs are Cost Effective
At the 2012 National Education and Action Summit, United States Labor Secretary Hilda Solis emphasized that apprenticeship programs “improve skills, they improve wages, and they improve a company’s bottom line.”[v] Indeed, properly trained craft workers, particularly those who participate in formal, industry-based apprenticeship programs, offer significant advantages over untrained workers, including increased productivity, improved quality and safety, and greater overall value and reliability.
Research also shows that contractor participation in apprenticeship training yields a solid return on investment. Where contractors invested just one percent of total craft labor costs in skill training, the typical project benefits included the following:
- Productivity improvement: 11%;
- Turnover cost reduction: 14%;
- Absenteeism cost reduction: 15%;
- Rework cost reduction: 23%; and
- Injury cost reduction: 26%.[vi]
Growing Use of Building Futures’ Model AUP
Building Futures has developed a model AUP that incorporates the key findings and advantages of other strategies, but offers a unique approach to workforce development for Rhode Island. This program provides project owners with model bid specifications and other necessary implementation documents that can be incorporated into owners’ bidding and contracting procedures to ensure that all construction firms participate in and maintain adequate bona fide apprenticeship training programs for the crafts they employ.
Building Futures has received strong support from the local project owner community, and this policy is currently being used by several major public and private institutions in Rhode Island, including the City of Providence, Brown University, Providence College and has been implemented for private sector institutions such as Blue Cross/Blue Shield, CVS/Caremark and Hasbro, among others.. These entities are leading the way by proving that this new and different approach to construction contracting – which promotes high quality training and good jobs for local residents – is both feasible and beneficial for project owners.
Key Features of Apprenticeship Utilization Program
Building Futures’ model AUP is designed to be straightforward to implement, while also including features that will help ensure maximum quality control for project owners. Key components of this program are as follows:
- Prequalification Standards: Building Futures’ AUP recommends that the craft training requirement be adopted as part of a contractor prequalification program and be made a mandatory condition of bidding and performing work on all owner projects (over a reasonable dollar threshold per the particular needs of each owner, e.g., $100,000 for larger construction programs).
- Registered Apprenticeship Participation: Participation in registered apprenticeship training programs, which are time-tested, structured, formal education and training programs registered with and certified by federal and state government, ensures quality. Registered programs are also required to meet certain minimum criteria in terms of on-the-job training hours, related classroom hours, supervision and other criteria to ensure proper training.
- Apprenticeship Utilization Rates: Specifying the use of registered apprenticeship programs ensures quality training can take place on the project. In order to make sure participating contractors are training a sufficient number of apprentices, it also makes sense to require that a minimum percent, e.g., 15% of the total labor hours, will be from apprentice workers enrolled in quality registered programs. This approach provides a process of facilitating minimum levels of apprentice enrollment to maintain continuous training at levels needed to meet future workforce demand.
- Implementation and Documentation: Creating the system for achieving the goals is essential to AUP success. In Building Futures’ AUP, contractors provide the project owner with their apprentice utilization plan prior to being awarded their scope of work. Once mobilized to perform the scope of work, through Building Futures the contractor has a system to get qualified entry-level apprentices when needed. Contractors then document progress in achieving the apprentice utilization goals through custom report formats that require very little administrative time to complete.
- Enforcement Procedures: No system is effective without enforcement. Building Futures’ AUP includes provisions that trigger sanctions for non-compliance, provides incentives for voluntary adherence to program requirements and protects project owners from conduct that would undermine the program. An AUP committee is established at the onset of a project. Members of the committee review specific contractor performance and any AUP exemption requests from contractors, and recommend corrective actions when needed, all prior to any economic sanctions being considered.
Implementation of Building Futures’ AUP ensures that all contractors and subcontractors hired on behalf of a project owner participate in effective, registered apprenticeship training programs. This program is straightforward to administer since the self-certification procedures require firms bidding or otherwise seeking work from an owner to prove they meet the qualification standards set forth in the AUP, so contractors must show compliance with specific, well-defined industry standards.
For firms that already provide good training, satisfying such standards simply requires verification of participation in effective training programs. Other firms wishing to do business with a project owner would be required to increase their commitment to workforce development and improve skills training operations.
To learn more about Building Futures’ AUP, contact us.
Text on this page is excerpted from the 2013 report, Ahead of the Curve: Increasing Apprentice Utilization in Rhode Island’s Construction Industry. For a full discussion of Apprentice Utilization Program’s long-term impact on Rhode Island’s construction industry, download the full report. Ahead of the Curve-2013 Edition
[i]See Rhode Island Department of Labor, Apprenticeship website, at http://www.dlt.ri.gov/apprenticeship. For additional information regarding the role of craft labor apprenticeship programs in construction, including the purpose, structure and functions of these programs, see Appendix 1.
[ii] Reed et al, “An effectiveness Assessment oand Cost-Benefit Analysis of Registered Apprenticeship in 10 States, Final Report” Mathematica Reference Number: 06689.090 and 40096, submitted to U.S. Department of Labor Employment and Training Administration. (July, 2012)
[iii] 29 C.F.R. § 29.5.
[iv] Leveraging Registered Apprenticeship as a Workforce Development Strategy for the Workforce Investment System, Employment and Training Administration, Department of Labor (2007), at 4.
[v] Gayle Cinquegrani, Panelists Praise Apprenticeship Programs As Cost Effective Means to Train Workers, BNA Construction Labor Report (Aug. 9, 2012)