According to the famous movie line, “If you build it, they will come.” For Louisiana’s industrial construction boom, however, nothing will get built until they come. “They” means the workforce involved in industrial construction projects, from engineers to welders to nondestructive testing technicians.
Indeed, a qualified, skilled workforce is paramount to the state’s industrial renaissance becoming not only a series of announcements made in the business pages, but also a reality that affects the state’s economy for at least a generation.
Research indicates that an additional 86,300 skilled craft workers are required to construct the $80 billion worth of new plants and plant expansions already announced in Louisiana. About 35,000 of these workers are needed by 2016; an additional 51,300 are needed to replace industrial construction workers expected to leave the industry through 2016. The professions most in demand include electricians, welders, pipefitters, millwrights and carpenters. Process technology technicians, project managers and project estimators also are in great demand.
According to Roland Toups, chairman and CEO of Turner Industries, a number of factors contributed to the shortage of skilled craft workers, including a societal focus on four-year degrees, outsourcing of manufacturing and the evolution of needed technological advancements, such as robotics. Bloomberg Businessweek cites Bureau of Labor Statistics data showing that in 1988 the U.S. had 570,000 welders; by 2012, that number had dropped to 360,000. And with the average age of a U.S. welder being 55, a potentially serious shortage is in the future.
“Generally, at the high school level, parents and guidance counselors point their graduates to professional careers and four-year colleges,” he says. “Understandably so, and for many skilled workers, work is temporary and undesirable, travel is a way of life, and work is performed in volatile environments with long sleeves in the summer prescribed—all factors contributing to this being the vocation of last choice. The result is that in times of strong labor demand, those demands can easily outstrip the labor supply.”
Indeed, without that supply, projects that have been announced and approved simply can’t get built.
“Whether it’s electricians, millwrights, machinists—you’ve got to have skilled craft workers when you assemble these facilities because they are complex construction projects,” says Charles F. Freeburgh, vice president for advocacy at Axiall Corp.
“New jobs are coming to Southwest Louisiana, and it is important that residents who want to work and get promoted in today’s workforce get the required training and credentials NOW,” reads Sasol Ltd.’s new Southwest Louisiana Workforce Resource Guide. The guide, which was created in partnership with organizations like the SWLA Economic Development Alliance and the Louisiana Workforce Commission, continues with step-by-step instructions that encourage job seekers to get a high school diploma, select a craft, get the certification or associate degree for that craft, build a resume and finally apply for a job.
It’s not just welders, electricians, pipefitters and other craft workers that are in demand, though. Projects can’t be designed without the needed engineering talent. Indeed, Toups says that the front-end engineering design (FEED) process—which comes after the conceptual design of a project and also includes a definitive estimate and schedule—must be completed before construction begins. “In this country today, we have a real shortage of quality engineers and lead designers. Emphasis must be placed on STEM (science, technology, engineering, math) disciplines.”
Freeburgh agrees. “For this investment to be successful—for all industries involved—we’re going to need engineers.”
Although the estimated number of engineers needed is not as high as the number of skilled craft workers, engineers can be more difficult to recruit, says Stephen Waguespack, president of the Louisiana Association of Business and Industry. “Engineers are the hardest position to fill because of the escalating demand in global markets.”
Dean Richard Koubek of LSU’s Bert S. Turner College of Engineering says Louisiana’s engineering colleges would need to graduate 50% more students every year to meet the state’s workforce projections. “This is not a new issue, but the impact in Louisiana is amplified because of our vigorous growth in industries that need engineers,” he says.
Developing a workforce won’t happen overnight, especially for more experienced workers, including journeymen, engineering supervisors and project managers. For example, Toups says that 40% to 50% of work in a plant is pipefitting. “Those pipefitters have got to have experience,” he says. “You can’t make them in a day.”
In addition, about 70% of the workforce for any of the announced industrial construction projects will be journeymen. Developing a helper into a journeyman takes at least two years of training and work experience. Yet, helpers cannot gain the required work experience needed to become journeymen in sufficient numbers until the surge in work begins. This means a short-term shortage of in-state journeymen will likely result. Without an influx of highly skilled workers to Louisiana, the state faces a shortfall in its supply of journeymen.
And while workforce shortages are not causing projects to fall by the wayside, they could contribute to it taking longer to get projects built. “If a lack of qualified engineers and a technical team delays the typical six-month FEED process, then construction lags,” Toups says. “The construction staff and craftsmen are moved to other jobsites if work is available, but too often are forced to leave the area for ongoing work in other locales. Thus, the perceived shortage’ of craft labor that has moved on to greener pastures and other jobs.”
Analysis from LSU’s E.J. Ourso College of Business Division of Economic Development and the Louisiana Workforce Commission found that the spike in employer demand in the Louisiana construction industry will be less sharp over the next two years than previously predicted, while peak employment will be slightly lower than expected last year. According to the LSU/LWC analysis, “Firms know that construction labor will continue to be in exceptionally high demand, and are likely to adjust their schedules accordingly. All of this means that accurately projecting the timing of hiring is a process that requires constant refining.”
“About 90% of these plants’ schedules have been pushed back,” adds Toups. “That can be a blessing because if you’re not going to build them as fast as you said, your workforce demands can be spread over more time.”
Connie Fabre, executive director of the Greater Baton Rouge Industry Alliance, agrees, adding that “the peak is kind of stretching out through 2025 for all these fields.”
“With the timing more spread out, we won’t experience the panic that we at first thought we would,” Freeburgh says. Sliding timelines also give government, industry and educators more time to ensure that an ongoing supply of workers is available to meet Louisiana’s industrial construction and maintenance needs now and well into the future.