The Critical Path

The Critical Path

Positioning Maryland as an Innovation Leader in the Global Construction Industry

The Critical Path - Key Findings and Recommendations 1

About The Critical Path Construction is a proud business that thrives on problem

solving, values dedication and craftsmanship and requires vast amounts of knowledge and professionalism. Four primary factors are now challenging construction’s standard business model. Technology. Technology is revolutionizing the way our built environment is designed, delivered and implemented. People. The construction industry struggles with a “this-is-how-we’ve-always-done-it” mindset. An aging workforce and impending “brain drain” from retirements could lead to tremendous opportunity for future practitioners and business owners. Pathways. Maryland has an excellent education system, but it faces immense competition from other states at the post-secondary level and pathways to potentially fulfilling careers are not apparent. Perception. The industry’s perception among young people hinders their desire to examine construction when planning a career path.

Leaders in Maryland’s construction business, education and government saw these trends emerging and formed the Maryland Center for Construction Education and Innovation (MCCEI). MCCEI engaged the construction industry on what it needs from Maryland’s education system to get in front the technological and workforce changes. During MCCEI’s first year, a total of 126 industry leaders were interviewed on how they saw this business changing over the next 10 years.

The Critical Path is a summary of their perceptions and the resulting 6 policy recommendations. It covers emerging technologies, building processes, business planning, and efficiencies the industry is adopting in order to remain competitive and deliver value to customers. It also covers skills gaps, educational attainment and recommendations to Maryland’s education system to teach and train the workforce of the future.

This remains a proud industry where rewarding careers are perfected over a lifetime of practice, but the notion of “this is how we’ve always done it” may not be the formula for success anymore. It will take partnership, dedication, open dialogue and further refinement to implement, and that process starts now.

Contents 2

About The Critical Path

3

Forward

4

Survey Participants

8

Executive Summary

11

The Critical Path

32

Policy Recommendations

39

Citations

40

Parting Shots

41

Acknowledgements

42

Conclusion

2

Maryland Center for Construction Education and Innovation

Construction professionals use an action plan that incorporates thousands of items and tasks in exact detail on how a project is going to get from concept to reality. The industry calls this a “critical path.”

The recommendations made in this report, The Critical Path, are the beginning of a plan to build a world-class education system for Maryland’s construction and related built environment industries.

Forward The entire process of producing The Critical Path has been an

exciting and challenging endeavor. Nothing like The Critical Path has ever been done before for the construction industry. MCCEI interviewed 126 professionals, some of the interviews wrapped up within an hour, most went well beyond that. With the industry reeling on its heels from the Great Recession, these professionals had dozens of things they could have been doing, but took the time to sit down and tell us what they thought. There are not enough words of appreciation to express how much validation their time gives to this project.

During the interviews, some very interesting opinions and stories were shared. One story in particular stood out as a fitting metaphor for why The Critical Path was produced.

An interviewee stopped mid question and said “you know how the construction business is changing? Look up there and tell me what you see” pointing at the ceiling of a recently completed office. Looking up at the ceiling, I responded that I saw a light fixture. The interviewee then asked “what do you think the electrician did to get that light installed and working?” Thinking for a minute, I responded that the electrician installed the light in the bracket, ran the power from the breaker panel to the junction box to the switch to the light circuit. Confident I passed the test with flying colors and wanting to move on to the questions at hand, the interviewee calmly stated “nope, that is actually a LED panel, and all of the wiring is low voltage, controlled by light sensors, and run by a computer server. The IT guys did all of the wiring for the lighting system.”

With eyebrows raised, I questioned back that an information technology contractor performed a job that was the purview of an electrician. The interviewee responded “exactly, and when I realized that I was paying an electrician simply to install panels in ceiling brackets, I complemented him on his work but told him that he would not be needed back on site tomorrow.”

Think of the magnitude of that. One has to wonder what went through that electrician’s

mind when his work day ended. Did he shrug it off and think it was back to business as usual again tomorrow, or did the reality of the changing landscape hit him and he started doing internet searches for classes on computer controlled lighting systems?

There is a technological revolution occurring in the construction industry. Materials, processes, and systems of all sorts are changing and the way we teach, train and educate the workforce, and the people pushing the buttons to the people pushing the shovels must change with it. As one survey respondent stated, a significant threat to the construction industry is “obsolete technology of conventional building – we hold on to it because we don’t know any other way.”

This is why MCCEI exists. We hope you enjoy The Critical Path, but more so, we hope that you will roll up your sleeves and join us in making things happen.

Sincerely,

Robert M. Aydukovic, CRE President Maryland Center for Construction Education and Innovation

The Critical Path - Key Findings and Recommendations 3

Survey Participants The companies listed were interviewed by MCCEI from July 2011 through April of 2012. Every attempt was made to balance the list in terms of geography, discipline, and business size.

In total, these companies, divisions and departments represent a global gross volume in excess of $45

billion and employ

over 100,000 craft, trade, design, and management professionals worldwide. In Maryland, these organizations represent $7.2

billion in annual volume and employ

13,700 state residents.

Brian P. Andrews

Charles T. Breeding

Christian M. Chambers

Anonymous

Eric C. Brown, LEED AP

Francis “Frank” H. Chaney, II

Gregory W. Brown

Bernard A. “Andy” Cheezum, Jr., CHC

Carl J. Buch

Paul J. Choquette, III

Scott D. Bulera

Terry Coakley

Mike Burlas

William Cole, Jr.

Patrick A. Burns, P.E.

Gregory S. Colevas

Nevin Camp

M. Teresa Cook

Senior Project Manager Kettler McLean, VA Baltimore, MD

Anonymous Rockville, MD

Dwayne Austin

Vice President, Operations Manager Eastern Shore Joseph M. Zimmer Inc. Contractors Salisbury, MD

Daniel Baker

Executive Vice President Evans Builders, Inc. Salisbury, MD

John W. Barotti, P.E., LEED AP Senior Vice President Skanska USA Building, Inc. Rockville, MD

Carl O. Belt, Jr.

President The Belt Group, Inc. Cumberland, MD

William L. Bowen, II

Area Manager IA Construction Corporation Cumberland, MD

Jerry L. Bowman

Executive Vice President Morgan-Keller, Inc. Frederick, MD

Robert S. Boyd

President Regional Builders, Inc. Seaford, DE

David C. Bramble

President David A. Bramble, Inc. Chestertown, MD

4

General Superintendent David A. Bramble, Inc. Chestertown, MD

Senior Vice President of Operations & Principal KBE Building Corporation Columbia, MD President Waynesboro Construction Frederick, MD President Buch Construction Laurel, MD General Manager Turner Construction Company Baltimore, MD Vice President Miller & Long Bethesda, MD

Vice President, Group Operations Mortenson Construction Alexandria, VA President N-Tech Mechanical Services, Inc. Frederick, MD

Timothy R. Campbell President/CEO Callas Contractors, Inc. Hagerstown, MD

Stan D. Carlat

Operations Manager Hensel Phelps Construction Company Chantilly, VA

Jason A. Carter, LEED AP Vice President John J. Kirlin, LLC Rockville, MD

Maryland Center for Construction Education and Innovation

Partner Crimson Partners Herndon, VA

Chairman of the Board Chaney Enterprises Waldorf, MD

Vice President Willow Construction, LLC Easton, MD

Vice President Gilbane Building Company Laurel, MD Chief Executive Officer Coakley Williams Construction Gaithersburg, MD Vice President Robert W. Sheckles, Inc. Frederick, MD Division President Clark Construction Group, LLC Bethesda, MD Associate Vice President for Administrative Services UMBC Baltimore, MD

William Cox

President Corman Construction Annapolis Junction, MD

Chuck Crowther

Vice President Estimating Dixie Construction Company, Inc. Churchville, MD

Exhibit 1

Interview Company Statistics : Geographic Breakdown by Business Location Baltimore Metro

DC Metro

36%

36%

Western Maryland

Eastern Shore

Outside Maryland

13%

9%

6%

Matthew J. Daw, P.E., LEED AP

Arthur N. Fuccillo

Max Hernandez

John Driggs

Michael Furbish

Nicholas V. Hill, Sr.

Michael F. Dugan

Thomas M. Gaines, LEED AP

Richard G. R. Hillman

Joseph A. Easley

Michael J. L. Greene, LEED AP, CCM

Brett R. Hitt

Douglas W. Eder

Sharon R. Grinnell

Edward M. Hord, FAIA

Jon Eisen

Robert Grottenthaler, P.E., LEED AP, DBIA

Jason Jacobson

Paul P. Elias

Dale Gruber

Stephen W. Jensen, P.G.

Pierce J. Flanigan, IV

John Brady Harmon, Jr.

Michael S. Johnston, P.E.

Kevin J. Foley

Gregory E. Harraka, LEED AP, DBIA

Sharon Justice

Robert Fraga, FCMAA, AIA

Ben Harries

Gregg S. Kaderabek

Steven J. Frederickson, LEED AP

Adrian Harrison, Jr.

Davor Kapelina

Principal Keast & Hood Co. Washington, DC

President John Driggs Company, Inc. Capitol Heights, MD President AES Electrical, Inc. Laurel, MD Vice President Archstone Alexandria, VA

President Oak Contracting, LLC Towson, MD Managing Principal The Eisen Group Washington, DC Senior Vice President, Construction The JBG Companies Chevy Chase, MD President P. Flanigan & Sons, Inc. Baltimore, MD Chief Financial Officer E. Allen Reeves, Inc. Abington, PA Director, Facility Portfolio Management Services McDonough Bolyard Peck Columbia, MD President The Christman Company Reston, VA

Executive Vice President Lerner Enterprises Rockville, MD

Corporate Secretary CAM Construction Timonium, MD

President Furbish Company Brooklyn, MD

Vice President Callas Contractors, Inc. Hagerstown, MD

President Hencken and Gaines, Inc. Cockeysville, MD

Vice President, Construction Hines Washington, DC

President and Managing Partner sGrinnell Enterprises, LLC Owings Mills, MD Vice President Barton Malow Baltimore, MD

President Dale Gruber Construction St. Cloud, MN

Director, Asset Management & Planning Southern Management Corporation Vienna, VA President HITT Contracting, Inc. Falls Church, VA Principal Hord Coplan Macht Baltimore, MD

Group Vice President, Mixed-Use Development Archstone Alexandria, VA Vice President & Principal ECS Mid-Atlantic, LLC Hanover, MD

President HDC, Inc. Cockeysville, MD

Vice President M. S. Johnston Company Hagerstown, MD

Executive Vice President Coakley Williams Construction Gaithersburg, MD

Owner BGC/Gardiner & Gardiner Contracting Crofton, MD Office Manager/Safety Coordinator John W. Tieder, Inc. Cambridge, MD

President Justice Construction Group, LLC Eldersburg, MD Vice President/General Manager Freestate Electrical Service Company Laurel, MD President/CEO AtSite Washington, DC

The Critical Path - Key Findings and Recommendations 5

Survey Participants Exhibit 2

Interview Company Statistics : Breakdown by Business Type General Contractor or Construction Manager

40%

David E. Katz

Senior Project Manager, IOC Projects Bechtel Canada Montreal, QE Canada

Stephen T. Kimball

Senior Vice President Kimball Construction Company, Inc. Baltimore, MD

Ronald E. Knowles, P.E. President J. Vinton Schafer & Sons, Inc. Abingdon, MD

Stephen W. LaRue, P.E. President C. William Hetzer, Inc. Hagerstown, MD

Jody L. Latimer

Director, Design and Construction Johns Hopkins University Baltimore, MD

Richard M. Lombardo President & CEO Harkins Builders Marriottsville, MD

Christopher J. Lukawski

Vice President of Development & Construction Crimson Partners Herndon, VA

Jim Lutz

Senior Vice President, Development Liberty Property Trust Malvern, PA

Eileen B. Macario

Controller Target Building Construction Crum Lynne, PA

George Maloney

President Helix Construction Services, Inc. Millersville, MD

6

Sub-Contractor

Developer or Owner

Architect Engineer

Heavy Civil

15%

13%

7%

19%

Institutional Facilities

6%

Amy Marks

Rusty Ober

Milton Matthews

Daniel F. Pallace, P.E.

David Mayhew, AIA, LEED AP

Frank R. Palmer, IV

Douglas McCoach, AIA, NCARB, LEED AP

Richard “Skip� Parks, P.E., LEED AP

Michael McGeady

Jeffrey A. Penza, AIA, LEED AP

Dwight Miller

Scott Peterson

Tim Miller

Steven M. Petri, Sr.

Mairav R. Mintz, P.E.

Dave Pollin

M. Marc Munafo

Andrei Ponomarev

Robert W. Nilsson

Tonja Potter, LEED AP

President XSite Modular Clinton, NJ Executive Vice President Commercial Interiors, Inc. Hanover, MD Director, Architecture and Engineering Towson University Towson, MD Vice President RTKL Associates, Inc. Washington, DC

Business Development Manager Cianbro Corporation Baltimore, MD President Gillis Gilkerson, Inc. Salisbury, MD Chief Financial Officer AES Electrical, Inc. Laurel, MD Vice President, Branch Manager McDonough Bolyard Peck Columbia, MD President CAM Construction Timonium, MD

Senior Advisor Turner International, LLC Stevensville, MD

Maryland Center for Construction Education and Innovation

Project Manager McDonough Bolyard Peck Columbia, MD Director of Construction Merritt Construction Services Baltimore, MD Senior Vice President The Whiting-Turner Contracting Company Towson, MD Executive Associate Heery International, Inc. Baltimore, MD

Principal Penza + Bailey Architects Baltimore, MD

Vice President of Operations Commercial Interiors, Inc. Hanover, MD Owner DECA, Inc. Baltimore, MD

President The Buccini/Pollin Group, Inc. Washington, DC Project Manager Akridge Washington, DC

Project Manager McDonough Bolyard Peck Columbia, MD

Exhibit 3

Interview Company Statistics : Size by Maryland Employment

18%

38%

14%

25%

3%

2%

< 10

10 - 49

50 - 99

100 - 499

500 - 999

> 1000

Michael Proffitt, AIA

H. Wesley Schwandt

Bruce Traggorth

Timothy J. Regan

Michael T. Shacklette

Michael E. Wagner, Sr.

W. Blair Rinnier, CCIM, CPM

Jay Silcox, P.E.

Dodd Walker

President Proffitt & Associates Frederick, MD

Executive Vice President The Whiting Turner Contracting Company Towson, MD President Rinnier Development Company Salisbury, MD

Vernon Roberts

Estimator/Project Manager John W. Tieder, Inc. Cambridge, MD

Anthony Rodgers

Executive Vice President A & R Development Corporation Baltimore, MD

Bruce C. Rogers

Business Development Kinsley Construction Timonium, MD

Michael W. Ruth, CCC, LEED AP Senior Consultant McDonough Bolyard Peck Columbia, MD

Enrique Salvador, P.E., LEED AP Associate Director - Capital Projects University of Maryland College Park, MD

Michael A. Schlegel

President Bozzuto Construction Company Greenbelt, MD

Douglas Schmidt

Principal Chesapeake Real Estate Group, LLC Baltimore, MD

President BPGS Construction, LLC Wilmington, DE

Director of Estimating & Pre-Construction Hencken and Gaines, Inc. Cockeysville, MD

President The Michael Group, Inc. Baltimore, MD

Vice President- Operations Freestate Electrical Construction Company, Inc. Laurel, MD

David A. Bramble, Inc. Chestertown, MD

Vice President â&#x20AC;&#x201C; Development Akridge Washington, DC

Jay Sinclair, Jr.

David W. Wallace, P.E.

Controller A&E Construction Company Upper Darby, PA

Partner RK&K Baltimore, MD

Donald B. Smith, Jr.

Craig Wess

President Conewago Enterprises, Inc. Hanover, PA

President Manekin Construction Columbia, MD

Francis X. Smyth

Sandra V. Whipp, PHR

CEO/President Century Engineering Hunt Valley, MD

Director of Human Resources RTKL Associates, Inc. Washington, DC

Adam E. Snavely

President and CEO The Poole & Kent Corporation Baltimore, MD

Bill Stewart, LEED AP

Principal Schnabel Engineering Baltimore, MD

Vice President and City Manger Liberty Property Trust Columbia, MD

Gerald N. Therrien President Therrien Waddell Gaithersburg, MD

John W. Tieder, III

Principal Specialized Engineering, Inc. Frederick, MD

George E. Wirth, P.E.

Project Manager Gables Residential McLean, VA

Lisa G. Sullivan

David I. Wiegand, P.G.

Tiffani Worthy

Director of Learning and Development M. C. Dean Dulles, VA

Dirk Yoder

President Daystar Builders, Inc. Grantsville, MD

Vice President John W. Tieder, Inc. Cambridge, MD

The Critical Path - Key Findings and Recommendations 7

“

Executive Summary This was an interesting process, it really made you think in different ways.

”

~ MCCEI Survey Participant

Amidst a sea of economic tumult, skills shortages in

construction have hardly been a significant source of preoccupation for social scientists and other stakeholders in recent years. Skills shortages are typically associated with rapidly expanding industries and since the onset of the recession, no major U.S. industry suffered as much proportionate job loss than construction.

Since December 2007, the U.S. construction industry has shed nearly 2 million jobs, 47 percent in nonresidential construction and the balance in residential construction. At its cyclical peak achieved in February 2012, construction unemployment reached 27.1 percent. By mid2012, that rate had fallen to 12.8 percent, still well above historic norms and U.S. economic averages, but sharply in decline. Much of this decline occurred as former construction workers secured employment in other economic segments, including manufacturing, distribution and retail. The implication is that the market has pushed many highly talented professionals into other industries, leaving voids in the construction labor force.

At the same time, pent-up demand for construction has been building, particularly in the category of infrastructure. The nation’s bridges, highways, water systems, sewer systems, storm water management systems, dams and levies continue to falter, negatively impacting productivity and generating enormous one-time expenditures for governments at all levels.

The impact of technology is contributing to pent-up demand for construction as well as office buildings, hotels, and other structures increasingly needing to be retro-fitted to improve performance along various dimensions, including in terms of energy efficiency. Presumably, capital markets will eventually heal, job creation will accelerate and the down cycle in construction will be reversed. Already, progress is observed in the housing market, with starts up substantially. As one respondent eloquently stated “I think we will be fighting for people before too long as the market improves.”

A First-of-its-Kind Survey The Maryland Center for Construction Education and Innovation (MCCEI), in conjunction with Sage Policy Group, Inc. and Regional Economic Studies Institute (RESI), of Towson University, developed this report to provide stakeholders with an understanding of how Maryland’s educational institutions can help bridge current and future gaps between construction skills demand and supply. Increasingly, construction services are being exported to other regions and other nations. If Maryland is able to provide a highly competitive workforce, its construction companies and industries will be positioned to provide services to other parts of the world, bringing income back home with them.

Moreover, given daily alerts regarding exploding pipes, buckling roads and crumbling schools, a ready construction workforce is necessary for the maintenance of the state’s historically high quality of life and broadly shared prosperity. The State of Maryland and many local governments have focused on a number of issues related to construction and real estate, including septic systems, storm water management, wastewater treatment, green construction, building safety, historic preservation and architectural design.

This report provides primary and secondary data indicating that the skill sets needed to address these issues are simply not in existence. The analysis is based on a first-of-a-kind, in-depth survey of U.S. construction leaders, many of whom are primarily based in Maryland. The survey asks many questions, including questions regarding what educators can and should do to support the industry, accelerate the diffusion of technology, reduce costs and enhance project safety.

8

Maryland Center for Construction Education and Innovation

Core Analytical Findings The survey, in conjunction with a review of relevant literature, indicates that Maryland has an important opportunity to provide a comparative advantage to the state’s workforce and construction firms by providing more and better programing in the areas of construction management, industry software and skilled craftsmanship (electricians, carpenters, masons, etc.).

Emphasis should be upon new 4-year programs in the area of construction management, specialized training in specific software including BIM, training in green construction and modularization, and combined academic/apprenticeship programs for skilled craftspeople.

Brain-Drain

Bozzuto Construction

Survey respondents also indicated that a shortage of skilled craftsmen and construction We need to do things to inspire kids to go into this field. The supervisors emerged during the past 5 years.

This is simply remarkable given that over best and brightest were in engineering, it then shifted to Wall this period, residential construction activity slipped by nearly two-thirds and nonresidenStreet, now the interest is in Information Technology. tial construction declined by roughly a quarter. In spite of the decline in activity, shortages can be attributable to inadequate educational Exhibit 4 programming opportunities, apathy among Anticipated Percentage of Total Workforce Retirements the young regarding industry prospects, and for Interviewed Companies Through 2020 significant labor force departures due to rapid retirement. With retirement expected to 40% or None 20% or Less 20 - 40% be even more elevated going forward, skills Greater shortages could become debilitating. One survey participant summed it best by stating “if senior owners are not petrified by continuity, they should be.” This is true not only for demographic reasons, but also for reasons of technology and process. Many survey respondents also emphasize the need for ongoing training of their existing workforces, particularly in the areas of management/leadership, communications, BIM, and LEED certification.

“

6%

”

48%

40%

6%

Exhibit 5

Anticipated Labor Shortages Through 2020

70%

13%

10%

7%

Skilled Trades and Crafts

Engineering and Technology

Project Management

Other

The Critical Path - Key Findings and Recommendations 9

Executive Summary Technology According to 55 percent of survey respondents, advancements in technology, BIM, and retrofitting collectively represent the most dramatic sources of change in the way construction will be delivered over the next ten years. Technologies expected to be the most broadly diffused over the next decade include BIM, mobile computing, GPS, and newly emerging construction-related software. Part of this shift toward greater capital intensity and technology is the ongoing shortage of construction talent, which has led construction firms to scramble to find alternative production methods.

“

It is going to be a computer driven industry in five years.

Exhibit 6

”

Survey Participant’s Views on Top Emerging Technologies 55% BIM/VDC/GPS/Other Software 12% Wireless Communications/Components 11% Prefab and Modular Components 10% Alternate Delivery Models 8%

Renewable Energy/Energy Efficient Components

5%

Better Equipment and Safety Measures

BIM and other technologies are expected to become everyday tools in the near future, but survey respondents reported a concern that very few workers are presently skilled in these programs. This represents an important source of opportunity for local high schools, colleges and universities and a potential source of competitive advantage for both individual workers and local companies in Maryland alike.

Education A number of construction industry leaders indicated that many of their recent recruits do not come from Maryland. Many come from universities in neighboring states such as the Pennsylvania State University and Virginia Tech. This represents another indication that Maryland’s educational infrastructure has not served the local construction industry well in recent times. Thanks to the MCCEI survey, there is now concrete information telling educators just how they can change with the industry going forward.

Gilbane Building Company

“

In 20 plus years in this business, I have never hired anyone out of a Maryland based program.

”

Maryland Construction Industry College Graduate Recruitment 30% - Maryland Based Schools ~ 70% - Out-Of-State Schools 10

Maryland Center for Construction Education and Innovation

The Critical Path The Revolution in Construction Delivery is Coming In many ways, the manner in which construction services are delivered has hardly changed since the advent of structural steel in the mid-1800s. Generally, the process involves a buyer of services, competitive bidding by general contractors, a mass of coordinated subcontractors, frequent change orders, delays, budget overruns and occasional construction defects.

But developments in construction software (e.g., BIM), green construction mandates, digitization, modularization/prefabrication, materials science and mechanical systems are transforming the way in which construction services are being delivered. They are also shifting the construction skill sets in demand in a way that is similar to the transformation of the U.S. manufacturing industry.

Given the older demographics of today’s U.S. construction workforce and the relative lack of interest in construction-related occupations among younger workers, the U.S. construction industry faces major worker shortages. The lack of interest among the young is not simply a function of construction’s recent downturn and associated job losses. The emphasis of the U.S. educational apparatus on standardized testing and college readiness has reduced exposure to construction-related activities like shop class. There has also been in many communities diminished access to vocational training or as it is typically referred to today, career and technical education. As a result, many young people lack opportunities to develop an interest in working in occupations that simultaneously require the use of hands and head.

The Whiting-Turner Contracting Company

That said, the approaching revolution in construction will create many high-wage opportunities for young Americans as technical content increases. The question is whether or not the workforce will be ready to take advantage of these opportunities or whether purchasers of services will increasingly turn to modular builders located in other parts of the world.

Major Driving Forces in Construction Demand Fundamentals Real estate market behavior dictates where the focus of employment will be concentrated across construction occupations and thus what skill sets the industry will draw on most heavily in coming years. Therefore, studying real estate trends can shed light on how to optimize occupational training delivered by Maryland’s educational system. The following section highlights key developments pertaining to the U.S. real estate sector.

Exhibit 7

To Rent or To Buy?

U.S. Homeownership Rate, Q1:1990 - Q1:2012 Source: Census Bureau

70 69 68 67 66 65 64 63 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

It’s been called “The Era of Less” for the real estate market- less financing, less profitability, less space per capita. At the same time, it is the era of greater perceived risk, of re-urbanization, of mounting calls for sustainability and social responsibility. Exhibit 7 depicts a nearly four percentage point decline in the rate of homeownership over the past eight years, from an all-time high of 69.4 percent in 2004 to 65.5 percent in the first quarter of 2012 — a downward trajectory which will ultimately bottom out between 62-64 percent according to the Urban Land Institute.1 Like-

The Critical Path - Key Findings and Recommendations 11

The Critical Path

The Great Recession has been instrumental in shaping these market conditions. With the ensuing deleveraging and eroded household wealth, Americans have neither the personal savings nor the ready access to capital to finance a home. Moreover, the residual sense of economic instability has cast disillusionment regarding homeownership. It is no longer perceived as a sure-fire means to augmenting personal wealth and many fear further devaluation of real estate assets from a double-dip recession. Under such circumstances, renting becomes more financially feasible and a less risky alternative.2 Whether pessimism will persist to prop up the rental market is anyone’s guess, but there are less tractable demographic factors that will drive rental demand over the longer run.

Exhibit 8

U.S. Rental Vacancy Rate, Q1:1990 - Q1:2012 Source: Census Bureau

12 11 10 9 8 7 6 5 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

wise, rental vacancy rates have fallen below pre-recession values, as evidenced in Exhibit 8, dropping to 8.8 percent in early 2012.

“

A significant threat to the industry as a whole are the special interests from the banking sector with selling the American dream of a big house with a big mortgage and all that jackass

”

The implication is that more Americans will squant. be living in multifamily settings. The skills needed to build an apartment building are somewhat different from those needed to construct a single-family home. Multifamily settings are also more likely to be associated with installation of new, often expensive technologies since the cost of these technologies can be spread across a larger number of households.

Goodbye, Suburbia!

Whereas Baby Boomers and Gen X appeared to be fixated on square footage, large backyards and room to graze, Millennials (also known as Gen Y) seem to value physical proximity to like-aged individuals and social venues despite the availability of connective social media.

These attributes will establish a preference for urban core living among Echo Boomers. According to a 2008 RCLCO survey, “77 percent of generation Y reports wanting to live in an urban core, not in the suburbs where they grew up. They want to be close to each other, to services, to places to meet, and to work, and they would rather walk than drive.” Between the desire of city living and their limited means to afford extravagant lifestyles, Millennials will likely be living amidst reduced square footage.3 The Baby Boomer generation is also migrating toward smaller, urban dwellings. Of the 78 million individuals between the ages of 48 and 66 years, approximately one third will reach retirement age by 2020. Average boomer life expectancy is greater than historical precedents and members of this generation will lead active lives well into their retirement years. Correspondingly, boomers will look to settle in more urbanized communities which better appeal to their increasingly active, post-retirement lifestyle.

Housing is not the only segment of the real estate market experiencing a reduction in space per capita. In the interest of maximizing corporate bottom lines, a growing number of office functions have or will become automated, thereby reducing firms’ staffing requirements.

12

Maryland Center for Construction Education and Innovation

Bozzuto Construction Company

Advances in logistics have also made it possible to consolidate larger inventory within smaller warehouse space while growth in e-commerce threatens the perpetuity of brick and mortar retail stores.4 Consequently, the need for large commercial spaces is dwindling.

The overarching theme is one of maximum utilization of available space—increasingly a fixation among leaders in household, agency and corporate settings alike. The desire to maximize spatial efficiency will place additional pressure on architects and others to understand the latest modeling software and to be constantly aware of developments in the furniture and fixtures segment.

Greening Real Estate Stock As defined by the U.S. Office of the Federal Environmental Executive (OFEE), green building is “the practice of (1) increasing the efficiency with which buildings and their sites use energy, water, and materials, and (2) reducing building impacts on human health and the environment, through better siting, design, construction, operation, maintenance, and removal—the complete building life cycle.”5 In 2000, the U.S. Green Building Council inaugurated a measuring system, LEED (Leadership in Energy and Efficiency Design), to evaluate building performance on these fronts.6 Since the program’s inception, the USGBC has awarded LEED certification to more than 33,000 construction projects totaling in excess of 1.9 billion square feet.7 While this represents less than 4 percent (up more than one percentage point since 2007) of the total U.S. real estate stock to date, green building practices are steadily climbing upward and remained remarkably resilient to the economic downturn.

Southern Management Company

In the past, government, non-profit and corporate owner/occupiers have been the Private owners much less enthusiastic. They are focused most proactive investors in green property collectively accounting for 97 percent of LEED primarily on energy saving ideas with pay-back of less than certified new construction between 2000 and three years.

2002. The share of newly constructed LEED certified space owned by private developers, only 3 percent in the several years following the program’s launch, expanded to 21 percent over the 2006-2007 period. Why are these key players placing more of their chips on green real estate? One answer is public opinion.

More than a few businesses have sought to answer consumer outcries for more environmentally conscious industry practices by investing in green commercial space. Some firms have turned to sustainable design as a marketing device in order to differentiate their products and capture market share. And for others, making the leap to green building reflects an altruistic effort to promote quality of life through the enhancement of building performance.

“

”

In addition, given the novelty of green real estate properties, there existed limited data prior to the early 2000s with which to evaluate the energy efficiency claims and investment returns attributed to sustainable design. It took time and a few risk-takers before green building could be justified as a solid business proposition. Research demonstrates that green properties are characterized by lower vacancy rates, higher rents, faster leasing and lower operating costs relative to traditional buildings. The emergence of this information has helped to dispel doubt regarding investing in green real estate, particularly among private developers, and has spurred further growth in green construction despite a still lackluster construction marketplace.

But perhaps the most powerful impetus for greening real estate portfolios is expectation.

Recent volatility in fossil fuel prices coupled with contentious U.S. relations with OPECmember nations have continued to raise concerns about imminent and debilitating energy

The Critical Path - Key Findings and Recommendations 13

The Critical Path price inflation. Furthermore, regulators are anticipated to step up energy efficiency minimums mandated by U.S. building codes. In order to mitigate the potential costs of higher energy prices and of bringing existing real estate up to code, real estate owners, tenants and developers are intensifying investment in green property.8 From the perspective of the construction workforce, this requires greater ability to work with new materials, innovative mechanical systems, federal, state and local regulatory frameworks and with new types of subcontractors. Many industry experts seem to agree that what is today termed “green construction” will simply be termed “construction” during the years ahead.

“ “

People don’t really care about energy, They care about the money.

”

Green building is the new normal.

”

Exhibit 9

Responses to the Question “How Important has Green Building Become in Recent Years?”

Not Important

Very Important/Important

96%

4%

In fact, 96 percent of MCCEI survey respondents indicated that green building has become “very important” or “important” to the construction industry in recent years. Only 4 percent believe it is not important at all. Many industry stakeholders reported that a growing share of customers are requesting green building and that LEED accreditation is now almost always required, especially for public projects.

Supply Fundamentals While just-in-time delivery, enhanced productivity and falling prices have become industry standards across various manufacturing segments from computers to flat-screen televisions, construction remains a comparatively backward business in which projects frequently fail to be completed on budget or on time. A 2011 McGraw-Hill Construction (MHC) survey of Architecture/Engineering/Construction (AEC) firms found that time overruns occurred in approximately one in every four projects executed by respondents. For 34 percent of the study sample, the frequency of time overruns was even higher, with 50 percent or more of projects exceeding the promised completion time. MHC data also reveal that on average, 19 percent of projects experienced budget overruns. The mean budget overrun amounted to 14 percent of total project budget.9 Remedying these project risks can improve firms’ profitability and establish more competitive pricing in the construction industry.

With the help of building information modeling (BIM), the architectural and engineering community is making substantial progress in its efforts to reign in inefficient practices and deliver higher-quality products. The construction, engineering and architectural segments, of course, require a workforce that can handle the technological requirements associated with rapid industry restructuring and improvement.

14

“

Architecture students over-romanticize the business. They come out of school thinking they are going to design the next Eiffel Tower when they really start designing handicap ramps at the Burger King. We need young people that can think, do the jobs that need to get done in a professional manner in what is becoming a highly technical environment.

Maryland Center for Construction Education and Innovation

”

Changing the Game: Building Information Modeling Not long ago, architectural ideas were fleshed out on paper and manually distributed to consultants, contractors and project stakeholders for review. Their markups and suggestions then circulated back to the architect to be reworked into the original design/drawings. This revision process continued until consensus was reached on design. But making changes to a building plan could be, and often was, a highly time-consuming, error prone business.

With each alteration, blueprints had to be manually redrawn, project variables recalculated and general and other contractors re-educated. Opportunities for misinterpretation abound under these circumstances.

While the form of the misunderstanding might differ — perhaps a contractor had orchestrated the construction of a parking garage with two access points while the plan stipulated three; or an investor found that a 15’x 15’ bedroom was entirely too small in actuality than on paper; or perhaps an engineering consultant failed to recognize a clash between a sprinkler system and an HVAC duct — the ramifications were essentially the same: rework and/ or change orders equaled time and budget overruns plus squandered resources and frayed tempers.10 In addition, the time and labor-intensive nature of the traditional design process made planning a construction project to any great level of detail, if not impossible, then prohibitively expensive, which substantially augmented project risk, such as time and budget overruns. It also limited the complexity of buildings and the elegance of design. Ironically, firms would attempt to offset such risk by commencing construction prior to the finalization of the design with the results not infrequently undermining the intent.11 These inefficiencies ate away at architectural and engineering firms’ profit margins and elevated the cost to investors for construction deliverables. The design process needed to change.

Evidence from the Survey

Skanska USA

As was stated previously, the construction industry appears to be at the front-end of a revolution. Much of the impetus for change is associated with the historic downturn in construction spending due to the 2007-2009 economic recession. More than 50 percent of construction industry respondents indicated that the greatest change in construction over the past five years was related to a decline in revenues. Survey participants predictably noted increased competition for available work and diminished profit margins. Decreased revenues represented the leading answer for businesses of all types, from every region, and for both merit and union shops.

Other major changes in the operating environment include more rapid diffusion of technology (15%), a decline in the availability There has been a breakdown in relationships. In 2006 and of skilled labor (9%), and changing delivery/ 2007 when times were good it was all about collaboration, contracting methods (9%). With respect to the issue of skilled labor, respondents noted today it is all about low price and lawyers. that unfavorable cultural changes were taking place in the industry; changes associated with less interest in each project and diminished commitment to the industry over the long-term.

Part of this unwanted cultural change was attributed to the high-pressure construction environment accompanying the downturn, though the traits of America’s youth were also often highlighted by survey respondents. Many respondents also drew distinctions between the attitudes of veteran workers vis-à-vis younger newcomers. Please see Exhibit 10 on page 16 for related statistical detail.

“

”

The Critical Path - Key Findings and Recommendations 15

The Critical Path It is not surprising that in the face of skills shortages and issues of worker attitude, a growing share of construction firms would turn to greater capital intensity. In fact, faster integration of technologies in construction, particularly with respect to BIM, ranked near the top of the list with respect to industry shifts. Respondents indicated that BIM and the continuing development of communication-enhancing hardware and software has dramatically improved efficiency.

Fifty-eight percent of respondents reported that the economic recession (December 2007 to June 2009) and the nation’s slow, uneven recovery contributed more to changes in operations than any other factor over the past five years. Another 21 percent believe public policy has been at the heart of industry transformation while 16 percent believe the changing nature of technology has led the sway.

With respect to the economy, the general consensus among survey respondents is that the recession and slow-growth period that followed has resulted in job losses, weaker consumer confidence, and increased competition – all factors that hinder construction activity at the level of the individual contractor. Also noted was the issue of reduced government spending, which continues to soften the pace of construction spending recovery. One respondent suggested that during the economic slowdown, governments began to fund only “essential” projects, meaning sectors such as safety and education, “robbing from infrastructure to fund other initiatives.” Focus on the economy was prevalent among both residential and non-residential contractors.

Residential construction’s downturn began before the recession while non-residential construction’s falloff began during the recession itself.

Exhibit 10

Responses to the Question “What are the Top Three Things that have Changed the Most About the U.S. Construction Industry Over the Past Five Years?”

52% Revenues/Business Decreased 15% Technology/BIM 9%

Lack of Available Skilled Labor/Labor Composition & Culture

9%

Changing Delivery Methods

7%

Other

5%

Sustainability

4%

More Regulations/PLAs/MBE Requirements

Exhibit 11

Responses to the Question “Has the Primary Driver of Construction Industry Changes in Recent Years Been the Economy, Public Policy or the Changing Nature of Technology?”

58%

21%

16%

6%

Economy

Public Policy

Technology

Other

“

Technology just happens – it is organic. The nature of the workforce is changing. For example, we are not interviewing people without college degrees right now which was not the case 5 years ago.

”

Lastly, the survey participants reflected on changes in the construction labor force over the last five years stating that numerous factors have impacted the professional trades.

Most notably, the top areas of labor impacts have been that a significant number of 16

Maryland Center for Construction Education and Innovation

skilled craft workers have left the business to pursue other opportunities (16%), an erosion is work ethic (12%), a repulsion of younger and tech savvy potential workers (12%), a dramatic rise in the Hispanic labor force (12%) and a significant aging of the remaining workforce (6%). Please see exhibit 12 for statistical details.

“

Professionalism has gone up. The screamers and yellers are on the way out. Leaders and motivators are on the way up and they understand diversity and generational differences.

“

”

We must make jobsite a collaborative partnership, not a dictatorship. Understand that everyone has contributions, not ‘my way, do as I tell you’.

Exhibit 12

”

What are the Top Three Things That Have Changed the Most About the US Construction Labor Force Over the Past 5 Years?

16%

12%

12%

12%

6%

5%

Skilled Labor Leaving

Work Ethic Has Eroded

Business Unattractive to Young People

Rise in Hispanic Workforce

Aging Workforce

Better Trained Educated

The Future of Construction Technologies Introducing BIM Simply defined, BIM or Building Information Modeling, is software used to generate virtual 3D simulations of building plans as well as You can draw anything in CAD various forms of reporting such as material when it is built. schedules. But unlike CAD-3D and other design software, BIM executes these functions using parametric modeling. This feature allows the application to automatically adjust all variables corresponding to a change in the design. For example, suppose that per client request an architect needed to resituate the kitchen in the plans for a new hotel. A change of this sort could have any number of implications on other systems housed within the main structure, such as plumbing, HVAC or data. BIM is capable of recognizing these dynamic interrelationships. So when the kitchen is relocated in the building plans, the application will reconfigure other elements of the building accordingly to accommodate the move as well as update any pertinent metrics like construction costs and timetables. This capacity yields an exponentially faster, more accurate system for drafting and modifying building plans compared to traditional methods. As a result, information can pass with greater ease between the parties invested in a project. BIM’s three-dimensional renderings also ensure that information is conveyed with more clarity to team members. The

“

”

but it doesn’t mean it’ll work

The Critical Path - Key Findings and Recommendations 17

The Critical Path improvements in team communication fostered by BIM help to align expectations and limit the costly errors attributed to communication breakdowns.12 The time savings and superior analytics delivered through BIM technology have produced the means by which to plan the design and construction phases of a project to unprecedented degrees. This downto-the-details modeling has also enabled more extensive utilization of prefabrication in construction projects. Because prefabricated parts are manufactured in a controlled environment, their production and installation costs tend to be lower than would be the case if the same components were assembled piece-by-piece at an actual construction site.13 Pre-fabrication and modularization represent other sources of labor demand. Use of prefabricated parts can substantially diminish project costs and accelerate completion time. In addition, the ability to virtually stage the construction process gives contractors better regulation over work releases, material coordination and individual workloads. Visualizing how construction ought to proceed helps contractors identify sources of inefficiency in actual execution and develop strategies that optimize the delivery and quality of end products. To date, BIM represents the vanguard of construction’s revolution.

“There are 5-6 levels of BIM. Industry wide we are on level 2” Building information modeling is rapidly evolving to encompass several elements of the built environment process. The standard parametric modeling practice is 3 dimensional modeling with clash detections. Other elements include: • 4D Modeling – Time: Integration of the project schedule with the design model.

• 5D Modeling – Money: Integration of the construction budget, cost estimating and procurement models.

• 6D Modeling – Management: Integration of the design and procurement models with the facilities management program.

This evolution is occurring at such a rapid pace that in early 2012, 6D modeling with facilities management programs was relatively unknown.

Exhibit 13 Not surprisingly, BIM adoption has been rapid. Market data collected in a 2009 Responses to the Question “What Will Be the Most Dramatic McGraw-Hill Construction study14 indicated Changes in the Way in which Construction Processes Will Be that at that time nearly half the architectural ered Over the Next Decade?” and engineering community had implemented BIM in their projects, reflecting a 75 percent 34% Increase in BIM/IPD/GPS/Communications increase in usage between 2007 and 2009.

18% Will Require a Different Business Approach Within this same study, 72 percent of respondents who formally calculated ROI from BIM 15% Increase in Prefab/Modular/Materials reported positive returns, with 20 percent of 10% New Contracting/Procurement Methods this segment realizing gains in excess of 50 percent. Additionally, 93 percent of the BIM 5% Constriction in Labor Supply users surveyed expected the value of BIM 4% Cutthroat Environment/Industry Consolidation to increase in the future.15 These findings suggest that BIM will quickly evolve into a 3% Green Building standard industry tool for the conception and 1% Renovations/Retrofits execution of construction deliverables. But realizing the full potential of BIM requires the 10% Other matching of skill sets with technology. Given the rapid diffusion of BIM, it seems unlikely that the construction industry can produce requisite skill sets on a timely basis. The U.S. auto industry offers some insight into how skill set formation and technology diffusion can be accelerated. Please reference case study on page 21.

The increased use of technologies such as BIM and GPS collectively represent the most dramatic sources of change in the way construction will be delivered over the next ten years. According to 55 percent of survey respondents, technologies expected to be the most broadly diffused over the next decade 18

“

Deliv-

The risk with technology is that it far outpaces the capacity of the people than have to use it. Younger people are used to using computers so there is great opportunity on the horizon.

Maryland Center for Construction Education and Innovation

”

include BIM, newly emerging constructionrelated software. Part of this shift toward greater capital intensity and technology is the ongoing shortage of construction talent, which has led construction firms to scramble to find alternative production methods.

Exhibit 14

Responses to the Question “What Are the Top Three Construction Technologies You Think Will Become Available or Broadly Diffused Over the Next Decade?”

55% BIM /VDC/GPS/Other Software

12% Importantly, while BIM and other technologies are expected to become everyday tools in 11% the near future, survey respondents reported 10% a concern that very few workers are presently skilled in these programs. This represents an 8% important area of opportunity for Maryland 5% education programs and a potential source of local competitive advantage for both individual workers and companies alike. Industry stakeholders should note the need to shift from the current equilibrium, one associated with relatively greater labor intensity, to one that is increasingly human capital intensive.

Educational leaders can accelerate this transformation in Maryland through more and better programming. Please see Exhibits 13 and 14.

Wireless Communications/Components Prefab/Modular Alternate Energy Models Renenwable Energy/Energy Efficient Components Better Equiptment and Safety Measures

“

BIM - this will be the standard in 10 years.

”

Modular, Pre-Fabrication and Design-Build Many respondents also emphasized the ongoing emergence of modularization/prefabrication and design-build. According to the survey, modularization will play a greater role in the construction of buildings such as hospitals, dorm rooms, and multi-story apartments in the future. However, many respondents also noted that while modularization and prefabrication offer a number of benefits, including increased efficiency, lower costs and improvements in productivity, there are countervailing costs. Respondents report that the pre-fab/ modular processes can result in lower quality products. These techniques also support less local employment since more of the work can be performed by unskilled labor located beyond regional boundaries. However, given the expanding gap in skilled labor, modularization is likely to gain market share going forward.

In fact, Exhibit 15 shows the majority of respondents (61%) expect construction to increasingly take on manufacturing business models in the not-too-distant future.

On the use of modular components:

“

In commercial building,

it is the wave of the future. For projects with Green/LEED requirements and for high density residential, this is perfect.

”

Exhibit 15

Responses to the Question: “Over the Next Decade, Will Construction Increasingly Take on a Manufacturing Business Model in which Production Occurs Offsite while Assembly Becomes Onsite?”

61%

18%

11%

10%

Yes

No

Depending on Key Facotrs

Increase Slightly

The Critical Path - Key Findings and Recommendations 19

Case Study: The Rising Influence of Building Information Modeling Building Information Modeling (BIM) is an advancing technology that first appeared in the construction business in the mid 2000’s. At current, BIM is neither perfect nor is it applicable for every construction project, but the advancement in the software and acceptance by the industry has been staggering since it came on the scene.

The use of BIM to date in the United States has the deepest roots in governmental, hospital, higher education and institutional type properties where the owner is developing a building that it intends to use for very long periods of time. Commercial real estate ownership and development has not yet widely accepted BIM models as there is an up-front cost to overcome, and it still viewed as a new technology. Since the Great Recession of 2007-2009, the capital markets would view anything “new” as an increase in the risk profile which did not help commercial projects secure necessary financing.

The University of Colorado Denver Anschutz Medical Campus Buildings

Mercy Medical Center The Mary Catharine Bunting Center

From 2001-2008, the University of Colorado Denver, developed and constructed two, very similar medical research buildings, aptly named Research Center 1 (RC1) and Research Center 2 (RC2). RC1 was built conventionally, RC2 was built using BIM Models. Both buildings had the same owner, similar use, same design architect, and the same architect of record but used different general contractors.

Mercy Medical Center is a regional healthcare facility located in Baltimore, Maryland. In 2010, Mercy opened the Mary Catharine Bunting Center, which was a new patient care, emergency room, and diagnosatic facility.

Project Statistic

RC1

RC2

Delivery Date

June 2004

December 2008

Design Architect

Kling Stubbins Architects

Kling Stubbins Architects

Architect of Record

Fentress Architects

Fentress Architects

Contractor

Hensel Phelps Construction Mortenson Construction

Gross Square Footage

600,000

506,000

Building Height

8 Stories

8 Stories

Cost

$216 Million (2008 dollars) $205 Million (2008 dollars)

Cost per square foot

$404 (2008 dollars)

Requests For Information 2,663

$407 1,629

Using the BIM Models reduced the number of RFI’s by over 1,000 which resulted in a 31 percent reduction in change orders from RC1 to RC2. There was no significant, direct cost savings as the additional up-front expenses to institute the BIM model for RC2 offset the back end cost savings. The true significance is that RC2 was delivered 6 months faster than RC1 resulting in faster placement into service and a reduction in construction interest carry. According to Michael J. Barden, Director, Facilities Projects at the University of Colorado Denver, RC2 “did have significantly fewer coordination type change orders” and “virtual construction has really improved the field side of construction and communication.”

Project Statistic

The Mary Catharine Bunting Center

Delivery Date

Early 2010

Architect

Ellerbe Beckett

Contractor

The Whiting-Turner Contracting Company

Gross Square Footage

680,000

Building Height

19 Stories

Cost

$304 Million (2010 dollars)

Cost per square foot

$447 (2010 dollars)

The Bunting Center was originally planned as a conventional design process. Whiting-Turner shifted to a BIM model which allowed for a significant use of pre-fabricated and modular components, which were not originally part of the concept. Normally on a project of this size in a conventional design and construction format, the number of change-orders would number in the hundreds. Through the use of the BIM model, the Bunting Center delivered with under 20 change orders, $5 million dollars under budget and 4 ½ months ahead of schedule. The faster delivery allowed the facility to start generating revenues sooner than anticipated and reduced the amount of interest carry cost, resulting in over $20 million in benefit to the hospital system.

As the use and benefits of using BIM models for design, scheduling, procurement and facilities management becomes more widely accepted along all asset classes, it is just a matter of time before this emerging technology becomes industry standard.

Sources: 1. The University of Colorado Denver, Facilities Management Department.

2. Hosfelt, Samuel M., The Efficacy of Building Information Models, The University of Colorado Boulder, 2007.

3. Reinhardt, Jan; and, Widney, Jonathan: Unit 1 – An Introduction to Building Information Modeling, The Associated General Contractors of America, 2012.

4. The Whiting-Turner Contracting Company.

20

Maryland Center for Construction Education and Innovation

Case Study: The U.S. Automotive Industry The U.S. auto industry, comprised of approximately 880,000 workers as of 2008, experienced a contraction of nearly 440,000 jobs over the last ten years. Those who remain employed, mostly auto assemblers, need training to become highly skilled workers needed to meet the demands of advanced manufacturing. Examples of such demands include “improving safety in vehicles, consumer demands for new model types with enhanced cosmetic and drive performance characteristics and regulations of emissions.” Given the new complexity of motor vehicles, the higher skilled occupations will “require more education and training to acquire the necessary skills to match those desired by niche manufacturers.” In addition, if auto workers want to move into industries outside manufacturing, they will need further training and educational advancements.

There are many skill set “upgrades” that have been deemed necessary for assembly line workers as part of implementation of new technologies in the automotive industry. For instance, the automotive industry has increased production of electric vehicles, along with alternative forms of energy storage. Unprecedented skill sets emerge as a result, including in areas such as chemicals, electronics, software, and coatings expertise, and knowledge for the integration of various vehicle systems. Workers who have skills in software, power electronics, and electromechanical engineering and are able to work on HEV (hybrid electric vehicles) and PEV (plug-in electric vehicles) are in elevated demand. Typically, the workers with these skills are engineers and technicians who have worked in research and development.

They also have skills in communications, computers, problem solving and teamwork, all of which can be used to adapt to new products, processes, and technology.

In addition to new and improved vehicle systems, companies need employees who are able to work with “green” technologies. The type of training for these skill sets is considered “new product training,” which includes manufacturing fuel injection parts for diesel engines, building hybrid transmissions, and recycling and proper use of products. Training for workers in the green automotive sector makes up between “10 to 30 percent of automakers’ annual training offerings to engineering and technical employees.” While employers can train workers in these skill sets, they have a difficult time hiring workers who already have these skills and knowledge. As shown in Exhibit 16,

Exhibit 16 HR Manager Perspective on Skill Shortage by Type of Auto Worker Skill Set

Operators

Skill Trades Engineers

Literacy/Numeracy

22.2%

2.5%

1.2%

Analytical Skill

29.6%

12.3%

7.4%

Manual Dexterity

2.5%

1.2%

1.2%

Knowledge of Specific Equipment

17.3%

16.0%

7.4%

Knowledge of Specific Software

23.5%

22.2%

11.1%

Ability to Work in Teams

14.8%

8.6%

4.9%

Communication Skills

24.7%

17.3%

11.1%

Problem-solving Skills

34.6%

16.0%

7.4%

Understanding of Company Goals

22.2%

12.3%

8.6%

there is a skill shortage by type of worker, based on the percentage of firms reporting a lack of skills.

How the U.S. Auto Industry is Dealing with Its Skills Shortfalls The tri-state region consisting of Indiana, Michigan and Ohio has already started the process of accelerating skill set “upgrades.” This region has a “strong automotive, educational infrastructure” with schools, colleges, and universities to ensure there are many programs relevant to this industry. First, there is significant outreach to high schools to produce course modules or workshops for teachers. In addition, schools are hosting recruiting events to provide opportunities to the general public. Currently, the region’s colleges and universities have created graduate-level programs to produce more workers with the necessary engineering skills. An example is the Energy System Engineering program from the University of Michigan. Moreover, the U.S. Department of Energy awarded grants for the creation of such engineering programs to Purdue University, Wayne State University, and Michigan Technological University.

In 2010, the Center for Automotive Research (CAR) created a database of programs for advanced manufacturing or automotive occupational training institutions of higher learning within the tri-state region. CAR examined offerings of “roughly 900 accredited postsecondary institutions and more than 1,900 programs offering degrees or certificates” that would be relevant to the auto industry. In addition, more than one third of these institutions have existing training in engineering, design, production, and maintenance of automobiles.

Construction Industry Parallels Like the auto industry, the construction industry has experienced employment declines in recent years. The residential construction subsector accounted for more than half of employment losses. These declines are partly due to the recession but also the growing complexity of product design and technology. The employment focus will shift in this industry as well as new technology requires that positions be filled by persons who are highly educated and/or trained. Opportunities for highly educated individuals exist in various subsectors in the construction industry, including in green construction. This of course represents significant opportunity to institutions of higher education as well.

A Great Start Similar to the database project produced by CAR for the automotive industry, MCCEI has created an on-line database of known construction education and training programs in the state of Maryland. The facilities are integrated with a mapping function and course description to allow users to search for programs that suit their interests. The map covers over 500 high school, community college, apprenticeship, trade school and university offerings. Visit mccei.org/map to learn more.

The Critical Path - Key Findings and Recommendations 21

The Critical Path Design-Build With respect to design-build, many respondents believe its presence will continue to expand, particularly in the highway construction segment. A majority of respondents (59%) believe that the use of design-build produces better outcomes with respect to timeliness and predictability. However, 41 percent are not convinced that design-build represents an effective method of construction delivery.

According to one respondent, design-build is “the best way to get something built from an owner’s standpoint. If the owner works with the team, the designer and contractor, it makes them part of the team. This eliminates the potential for lawsuits, changes, un-do’s, etc. Overall the cost will be less.” In similar fashion, another respondent suggests that “Customer satisfaction is much higher and disputes become non-existent.”

On the view of the positives of Design Build :

“

This is what

we do. Design-build gives us a lot more control and as long as were good with it, jobs turn in quicker, are more profitable and clients are happy.

”

Exhibit 17

Responses to the Question “Do You Believe that the Use of Design-Build Leads to Better Outcomes in Terms of Timeliness of Construction and Predictability?”

Yes - 59%

No - 41%

Still, another respondent indicates that design-build limits the creativity of architects and can be “disastrous if you don’t know how it works or what you’re doing.” Training in design-build and management therefore represents another key opportunity for Maryland’s education institutions. Exhibit 17 provides statistical detail relevant to this portion of the discussion.

Shifting Demand for Construction Future Likely to be Challenging According to Maryland construction leaders, increased regulation, inadequate financing, a continued stagnant economy, the state’s business climate, and the lack of skilled workers represent the most significant threats to the success of Maryland’s construction industry during the next ten years as indicated in Exhibit 18. Of these five primary issues, educational leaders can only truly deal with one, the lack of available skilled workers. The hope is that the construction economy will improve, the regulatory environment will be balanced and capital markets will begin to function more in accordance with historic norms. If those things occur, the returns of constructionrelated educational programming is likely to be very high, particularly when one considers the prospective impact of empowering Maryland’s workers and firms to better compete in regional, national and global markets.

22

Exhibit 18

Leading Responses to the Question “What Are the Top Three Largest Threats in General to the Maryland Construction Industry Over the Next Decade?”

21% Regulation/Over-regulation 17% Lack of Financing 17% Stagnant Economy 14% Business Climate/Economic Development Efforts 13% Other 11% Constricted Labor Force 5%

Competition From VA, PA and WV Firms

2%

Industry Over-capacity & Consolidation

Maryland Center for Construction Education and Innovation

Certain Segments Expected to be Particularly Strong Respondents believe that healthcare (including elderly care), infrastructure, and energy segments will produce the most significant increases in demand for construction services in the near future. It may be that respondents are merely extrapolating from what they presently observe. During a recent twelve-month period (April 2011-April 2012), public and private spending on healthcare-related construction expanded nearly 8 percent while spending on power-related infrastructure expanded nearly 19 percent. Other segments expected to produce increases in demand for services include multi-family housing, education, and commercial building. These and other findings are summarized in Exhibit 19. Note that many of the top segments indicated below represent ideal uses for modular building and prefabrication, including healthcare/elderly care, multi-family housing, and education.

Not Clear that Maryland is Prepared for its Future While many construction leaders believe that the industry is prepared to provide services to high-growth segments in the future, roughly one-fourth of Maryland’s construction leaders surveyed think the industry is not prepared.

Among this group, the most common concerns predictably revolve around a lack of skilled labor and a lack of experienced management. This analytical finding highlights how flawed the current system of developing human capital for the construction industry is and how much room for improvement exists.

Exhibit 20 provides relevant statistical detail.

Exhibit 20

Responses to the Question “Is the Construction Industry Ready to Deliver Services to These High-Growth Segments?”

Yes - 75%

Exhibit 19

Responses to the Question “What Are the Top Construction Segments that Are Most Likely to Produce Significant Increases in Demand for Construction Services Over the Next Decade?”

26% Healthcare/Elderly Care 19% Infrastructure 13% Energy 11% Multi-Family Housing 11% Resuse/Renovations 7%

Other

6%

Education

5%

Commercial (Office, Warehouse, Manufacturing, Retail)

Survey Respondents Views on What Types of Buildings Will be Most in Demand Over the Next 10 Years “Prisons - if economy doesn’t pick up.”

“Infrastructure - if we don’t fix it, we quickly descend as a world leader.”

“Less sprawl, more urbanization - Higher density residential, retail and office.”

“The last building boom was 35 years ago. There is a lot of need for renovation.”

“Amenities for ‘NORC’s’ - Naturally Occurring Retirement Communities, like Bethesda and Chevy Chase, where there are no kids left.”

“Renewable energy - with a drop off in cost of solar panels, this will be a big growth industry.”

“Water infrastructure - we operate on a fix it when it breaks model.”

“Housing - People are still making babies. When that stops, demand stops.”

“Resurgence of university and higher education. If there is one thing this country has to sell is education - Life Sciences, Nano Technology labs.”

“

The industry will be ready. Time-tables will have to adjust because the industry is not ready to get it done quickly. Modularization, GPS and other technologies will speed things up. It’s all about efficiency. Think harder, work less.

”

No - 25%

The Critical Path - Key Findings and Recommendations 23

The Critical Path Key Construction Skill Sets and Labor Supply According to the survey, a shortage of skilled craftsmen (including electricians, carpenters, masons, etc.) and project managers/supervisors emerged during the past 5 years. This is simply remarkable given that over this period, residential construction activity slipped by nearly two-thirds and nonresidential construction declined by roughly a quarter.

Exhibit 22

Responses to the Question “What, If Any, Labor and/or Skills Shortages Have You Observed in the Last Five Years?”

49%

21%

11%

10%

8%

Skilled Trades and Crafts

None

Other

Project Management

Engineering, Technology

Over the next decade, shortages in these two categories are expected to expand along with the need for engineers. Seventy percent of survey respondents expect the shortage of skilled workers to grow while 13 percent expect the shortage of engineers to worsen. Another 10 percent expect the shortage of supervisors and project managers to persist over the next ten years. Exhibit 22 above and Exhibit 5 on page 9 provide related statistical detail.

Industry Leaders Have Already Begun to Deal with Anticipated Retirement According to survey respondents, retirement will be an overwhelming issue over the next decade. Nearly half of interviewed companies expect 20 percent or more of their workforce to retire between now and the year 2020. Of this group, 40 percent anticipate between 20-40 percent of their workforce to retire, while 6 percent expect more than 40 percent of their employees to retire. Please reference Exhibit 4 on page 9.

The greatest challenge will be replacing these retirees with workers that have the same level of skill and institutional knowledge. Based The Millennial generation will play bigger roles. They are on survey data, many construction executives stronger in technology, lesser in builders’ skills. Succession are already preparing to replace their prospective retirees. A significant number of survey planning and employee development are critical. When you respondents report that retirements will have little to no impact on their company’s fortunes continually add people and mentor them and groom them, it because they have created succession plans mitigates the losses. and have already begun to train executive staff to fill the positions. One respondent noted that in some cases, the replacement workers will be more skilled than the workers they replace, particularly in the area of information technology. However, these same workers tend to lag far behind with respect to construction-specific technical and mechanical skills.

“

”

24

Maryland Center for Construction Education and Innovation

Maryland’s Aging Construction Workforce Table 1

A need for basic skills

Number of Active License Holders Master License Holders

In general, younger workers require math and language skills while incumbent workers need the ability to use new and complex technology and develop leadership and management skills.16 According to a Sacramento Employment and Training Agency report, the top workforce skill sets as rated by 15 top industries, three of which are in the construction sector, are as follows:

Journeyman License Holders

Apprentice License Holders

Average Age

# of Active Licenses

Average Age

# of Active Licenses

Electrician

50

1,367 (Note 1)

Note 2

N/A

Plumber

53

3,325

44

2,537

37

5,543

HVACR

52

2,285 (Note 1)

46

4,452

36

10,001

Natural Gas Fitter

54

468

48

732

33

220

Skilled Trade

Average # of Active Age Licenses Note 2

N/A

Inspector - Plumbing

56

60

57

2

N/A

N/A

Inspector – HVAC

54

102

Note 3

N/A

Note 3

N/A

Note 1 – Excludes restricted and inactive license holders.

Note 2 – The state of Maryland only licenses master electricians for state wide activities. Individual counties, cities and regional authorities issue electrician licenses at the journeyman and apprentice level. Data for county and local level journeyman and apprentice licenses for electricians was unavailable at the time of publication..

Note 3 – HVAC Inspectors must be master license holders.

1. Mathematics 2. Speaking 3. Problem Solving 4. Time Management 5. English Language 6. Reading Comprehension 7. Writing 8. Decision Making 9. Work Ethic 10 Active Listening 11. Critical Thinking 12. Attitude and 13. Interpersonal Skills17

Table 2

Number of Registered Apprentices in Maryland Earning Credits for a License

When asked about skills gaps for their own companies and employees, construction industry leaders interviewed had very similar responses to the results of the Sacramento study.

Brick Layer

51

Elevator Constructor

199

Plumber

Bridge/Industrial Painter

37

Firestop Containment

13

Reinforcing Ironworker 24

772

Cabinet Maker

4

Glazier

24

Roofer

91

Carpenter

223

HVACR Technician

321

Sheet Metal Worker

511

Caulker/Pointer/Cleaner

1

Insulation

102

Sprinkler Fitter

106

Craft Laborer

41

Millwright

25

Steamfitter

988

Drywall Applicator

23

Operating Engineer

78

Structural Steel

169

Drywall Finisher

3

Painter

19

Telecommunications

18

Electrician

2,118 Pile Driver

20

Source: Maryland Department of Labor Licensing and Regulation, Apprenticeship Training Program.

June 31, 2012

Interestingly, the construction industry in Maryland did not observe a majority of skills gaps along the technical aspects of the business, but more along the soft skills, leadership, general business knowledge and the basics. Please reference Exhibit 23 for details.

As noted in table 1, the weighted average ages for Maryland license holders for Master Journeyman and Apprentice are 53, 45 and 36 respectively. Clearly there is going to be a massive wave of retirements in the next 10 years at the master and journeyman level. Another factor is that license holders do go inactive for a number of reasons and some people leave the state for other opportunities. Table 2 shows the pipeline of registered apprentices, which is the entry level for technical careers potentially leading to business ownership. There is a significant gap in the technical career pipeline to fill voids left by pending departures, indicating a tremendous opportunity for new entrants.

Exhibit 23 What Are the Most Prevalent Skills Gaps You Observe from Your Employees?

Managerial

Response

Skilled Labor

Response

General Labor

Response

Communications

28%

Field Experience

19%

Attitude/Work Ethic

22%

Interpersonal Skills/Conflict Resolution

12%

Communications

18%

Basic Education

18%

Responsibility/Professionalism

11%

Attitude/Work Ethic

18%

Basic Work Etiquette

14%

Business Training

9%

Computer and Technology

13%

Safety/Craftsmanship

14%

Leadership

7%

Basic Work Etiquette

9%

Communications

12%

Computer and Technology

6%

Willingness/Ability to Learn

8%

Interpersonal Skills/Conflict Resolution

6%

The Critical Path - Key Findings and Recommendations 25

The Critical Path Skills associated with green construction Green industry occupations require certain skill sets in order to succeed in this type of Most clients are asking for green buildings. The level of workforce. As shown in Exhibit 24 an Ohio survey cited the specific skills that “green green began to fade a while ago but has skyrocketed in industry” employers look for in potential 18 and current employees. These skill sets are the last 5 years. relevant to occupations in building maintenance, retro-commissioning, energy auditing, engineering, building construction, and other professions.19

“

”

Exhibit 24 Skills that Employees Will Need to Perform Green Activities

66%

How to Use Green Materials

59%

Knowledge of Environmental Policies/Regulations

56%

Principles of Energy Conservation

56%

Energy Auditing

54%

Innovative Clean Technologies and Processes

53%

Entrepreneurial Skills

47%

Life Cycle Costing

47%

Waste Minimization

41%

Energy Efficiency Skills

35%

Pollution Reduction and Control

35%

Alternative Energy

34%

Green Information Technology

27%

System for Collecting, Analyzing & Interpreting Environmental Data

8%

Other

Source: Ohio Department of Job and Family Services

Cultivating Talent Training programs cultivate these skill sets through helping unskilled workers expand their knowledge and introduce them to new lines of work. Industry leaders recognize that there will need to be an improved career articulation between K-12 and community colleges along with better “outreach to parents, counselors and students to help them learn about the careers and career lattices . . . in the construction industry.”20 There is already a foundation of progress. Many programs have been initiated to increase training to address various opportunities in the industry. The Employment and Training Administration invested more than $260 million across the U.S. in support of the Workforce Innovation in Regional Economic Development (WIRED) initiative. The focus of WIRED is the creation of high-skill and high-wage jobs for American workers through economic de26

Maryland Center for Construction Education and Innovation

The Furbish Company

velopment and training opportunities.21 Moreover, the Department of Labor provided $500 million towards “green job” training grants. The AFL-CIO Center for Green Jobs is one of the programs that received grant funding to provide training for “green jobs” opportunities.

The grant will focus on the following subsectors: 1. Energy-efficient building, construction, and retrofitting industries; 2. Renewable electric power industries; 3. Energy-efficient and advanced drive-train-vehicle industries; 4. Bio-fuels industries; 5. Deconstruction and materials-use industries; 6. Energy efficiency assessment industries; and 7. Manufacturers that produce sustainable products using environmentally sustainable processes and materials.22 The State of Maryland has also increased its efforts to provide training for higher skilled occupations in the construction industry. PreK-12 school systems and apprenticeship programs sponsored by union and non-union organizations are available to prepare students for a career in construction and can be found throughout the state. Individuals in apprenticeship programs undergo training through classroom instruction and close supervision from an experienced worker in a specialized field. Currently, there are “230 registered apprenticeship occupations, and more than 28,500 individuals that have completed apprenticeship training.”23 Governor Martin O’Malley has set forth a new workforce development and skill initiative called Skills2Compete Maryland. The main focus of this initiative is that “every working Marylander should have access to the equivalent of at least two years of education or training past high school leading to a career or technical credential, industry certification, or a college degree.”24 In doing so, it will help expand employment opportunities through the expansion and enhancement of the new skills and knowledge needed by Maryland employers.

The Christman Company

But there have also been setbacks. In a fierce quest to assure that every American high school graduate has mastered a basic level of knowledge, standardized tests have emerged as a leading educational tool. Educators and schools are graded in terms of student progress on these tests, which are typically focused upon reading and math. While it is perfectly sensible to emphasize mastery of these basic forms of knowledge, one of the unintended consequences of such efforts is to deemphasize other forms of learning, including the experiential learning so critical to creating interest in construction and other goods-producing industries.

There has been an associated decline in vocational or career and technical education offerings in many communities as a result of intense focus on test preparation. According to the Department of Education’s Office of Vocational and Adult Education, nationwide enrollment in vocational/CTE courses at the secondary level (high school) has declined by 100,887 students or 1.3 percent since the 2007-2008 school year. In Maryland, enrollment declined by 11,243 students or 9 percent during the same period.

Growing emphasis on attending college may be another reason for declining participation in career and technical education. President Obama recently established a goal for the U.S. to “once again have the highest proportion of college graduates in the world” by 2020. While this is a reasonable goal considering that the average college graduate earns almost double the income of their non-graduate counterpart, it is important for policymakers and educators to remember that most jobs do not require a college degree. In fact, according to the Bureau of Labor Statistics’ Occupational Handbook Report, occupations requiring a high school diploma or less will account for 63 percent of new jobs between 2010 and 2020 (37% will require high school diploma or equivalent). Many of these jobs will, however, require certifications or additional education that is often provided through high school vocational/CTE programs.

Skanska USA

The Critical Path - Key Findings and Recommendations 27

The Critical Path There appears to be some expanded recognition of the importance of CTE more recently. In its FY2013 budget, the Obama Administration allocated $1 billion to expand funding toward the Carl D. Perkins Career and Technical Education Improvement Act of 2006. The initiative seeks to improve the performance of the Perkins Act by better aligning skills taught in CTE programs with actual needs of the labor market, incentivizing high schools, higher education institutions, employers, and industry partners to work together to ensure that CTE programs offer students high-quality learning opportunities.25 The FY2013 budget proposal also proposes an additional $1 billion to help high school students participate in Career Academies and another $8 billion for a “Community College to Career” fund to train 2 million workers for occupations in high-growth industries.

Assessment of Maryland’s Education System

Chaney Enterprises

Maryland’s Education System – Good, with Room for Improvement When asked how Maryland’s education system is doing with respect to creating a construction workforce to fill the voids that will be left by retirements and industry departures, 71 percent of respondents reported that neither Maryland industry nor its education system is presently not doing enough (Please see Exhibit 25). From a policy perspective, respondents suggested that Maryland’s policymakers and educational leaders can help accelerate and improve the quality of the workforce pipeline by encouraging educational institutions to provide more opportunities for education in the skilled trades.

“

Are we collectively doing enough? No, just look at other industries, there is no shortage of Harvard MBA’s.

”

Exhibit 25

Responses to the Question “Do You Think Either the Industry or the Maryland Education System Is Doing Enough to Create an Adequate Construction Workforce?

No - 71%

Nearly half of survey respondents reported that they have observed deterioration in the construction industry’s workforce over the past 5 years, while another 26 percent report that quality failed to improve. Only 25 percent have witnessed improvement in the quality of construction workers, which is remarkable given the fact that the economic downturn represented an opportunity for construction firms to weed out their least productive and committed workers. Please reference Exhibit 26.

Yes - 18%

Don’t Know

12%

Among the nearly 50 percent that observed deterioration, almost Exhibit 26 all (92%) expect the deterioration to continue over the next decade.

Responses to the Question “Have You Among those who reported no change in the quality of the construction Observed an Improvement or Deterioration in workforce (26%), 88 percent do not expect to see either improvement or the Quality of the Construction Workforce in deterioration during the next ten years. Of the 25 percent reporting an Recent Years?” improvement, 75 percent anticipate the workforce to continue to improve.

Among those who expect workforce quality to deteriorate, the most common concerns are that today’s workers are less motivated than older workers and are less skilled. These two concerns are of course related. Among those who anticipate improvement, the most frequently cited factor is that weaker workers continue to be removed from the industry in an environment characterized by ongoing spending sluggishness.

28

Maryland Center for Construction Education and Innovation

49%

26%

25%

Deterioration

No Change

Improvement

One of the major reasons that industry leaders anticipate construction skills shortages is that there is a perception problem facing the industry. After several years of decline, prospective workers may not be looking at construction for viable career paths. Moreover, because the industry remains cyclically weak, workflow remains inconsistent, inducing those who enter the industry to drop out. The lack of pricing power within many industry segments also results in reduced compensation, which further discourages workforce entry. Exhibit 27 provides relevant summary detail.

Exhibit 27

Certain Characteristics in High Demand

Responses to the Question “What Will Be the Top Three Largest Obstacles to Recruiting People to Consider Careers in the Maryland Construction Industry Over the Next Decade?”

Construction industry leaders are looking for a number of key workforce ingredients. At the forefront are professional references and experience, which highlight how important apprenticeship opportunities are for those seeking a construction industry career path.

It is important to note that in the category of management, degrees and certification are regarded as important (rating 3.5 on a scale of 5). Exhibit 28 provides relevant statistical detail.

“

There has been a deterioration, the skilled laborers not present. Even in this sucky economy, if you’re a skilled person, you’re working right now. Why? The experienced people are leaving through retirement. Newer generation behind them feels the world owes them something; they’re not willing to put in the time.

”

19%

Percieved Low Pay, Dangerous, Manual Labor

16%

Overall Negative Perception

14%

Industry Negatively Impacted by Recession

12%

Boom-Bust, Cyclical

11%

Not a College Track Career in High School

9%

Poor Industry Promotion and Understanding

7%

Competition from Other Careers

Exhibit 28

Responses to the Question “When You Consider New Hires, Please Rank the Following Attributes on a Scale of 1-5 (1 Being Irrelevant, 5 Being Absolutely Vital) to Your Hiring Decision.”

Management

3.7

4.0

Years of Experience

Skilled Craftsmen

3.3

3.3

Place of Past Employment

3.5

3

Degrees or Certificates

3.2

2.6

Years of Training

2.6

2.8

Place of Training

4.1

4.0

References

With respect to education and training for employees, a four-year degree is considered very important (3.8 out of 5) for managerial staff, but of relatively less importance for site supervisors and rather inconsequential for skilled and unskilled laborers. With respect to skilled laborers, employers apparently want to see both evidence of a certified apprenticeship (3.8) and a high school degree (3.6). It is also important that site supervisors have a high school degree (4.1). Exhibit 29 provides summary detail.

The Critical Path - Key Findings and Recommendations 29

The Critical Path

Exhibit 29

Responses to the Question “With Regard to Education and Training for Employees, Please Rank the Following in Order of Importance to the Job on a Scale of 1-5 (1 - Irrelevant, 5 - Absolutely Vital)?”

Managerial Staff

2.1

1.4

1.1

1.1

Master’s Degree +

Site Supervision

3.8

2.4

1.2

Skilled Labor

1.1

2.7

4-year Bachelors Degree

General Labor

2.7

1.6

1.2

Associate’s Degree

“

Post-Secondary Education

1.9

3.1

3.8

2.4

2.4

Certified Apprenticeship

3.2

2.2

1.6

Some College, No Degree

3.6

4.1

3.6

3.4

High School Diploma, GED

Maryland does not produce enough engineers to support the

A number of respondents indicated that industry. The industry hires more engineers than we produce. because Maryland’s workforce development There are not enough graduates for the industry. The big unistructure is not sufficiently well developed, many new hires are coming from outside of versities are too wrapped up in research.

Maryland. There is evidence that Maryland programs are not graduating enough students to support construction demand (See Exhibits Exhibit 30 30 and 33 on page 33 ). At Morgan State Responses to the Question “If You Hire Degreed Professionals University’s emerging construction manage(Bachelors or Higher) What Are the Top Three Institutions You Hire ment program, 2 students graduated last From?” year according to program administrators.

The University of Maryland Eastern Shore’s 42 Penn State 5 Purdue (UMES) construction management program 39 UMCP 5 Delaware at the Shady Grove Campus produced 17 graduates. Lastly, the National Labor College 31 Virginia Tech 4 Salisbury State has recently implemented a bachelor’s of art 9 Hopkins 4 Clemson degree program at its Silver Spring campus.

This represents further indication of the need 6 UMBC 4 Georgia Tech for better programming and improved con6 UVA 4 West Virginia nections between employers and educational institutions, including in the form of programs 5 UMES 3 Towson offering both academic credentials and ap5 Morgan 3 George Washington prenticeship opportunities.

”

5

Not every form of training revolves around 5 apprenticeships, however. As reflected in Exhibit 32 on page 31, 30 percent of survey respondents would like to see increased investment in college level construction management and engineering programs while 27 percent would like more investment in High School CTE programs. With respect to construc30

Catholic University Drexel

Maryland Center for Construction Education and Innovation

3

Harvard

tion management, 65 percent of surveyed construction leaders believe that Maryland needs another 4-year degree in construction management.

With respect to specific educational areas in which Maryland could improve, the leading category is BIM, design, and computer technology. Industry leaders are also focused upon improving communication and math programs, career readiness training, and other education. Please reference Exhibit 31.

Exhibit 31

Top Recommended Concentrations for Maryland’s Education System to Best Serve the Construction Industry 22%

BIM, Design, Computer Technology

19%

Field experience

17%

Communications, Interpersonal Skills

17%

Math/STEM

11%

Career Readiness

8%

Other Education

7%

Business management/accounting

Exhibit 32

Responses to the Question, “What Are the Top Three Areas of Maryland’s Education and Training Sector that Need the Most Improvement in Order to Best Serve the Construction Industry Over the Next Decade?”

30% College Level Construction Management/ Engineering

27% High School CTE

18% Better Marketing of Programs/Career Options

14% Trade Schools and Apprenticeships

5% More Industry Involvement

Interview Participant’s Views on Additional Education Focus “Our students have good technical skills, but soft skills in bad shape” “The ability to write and communicate.”

“Field applications, there is a huge lack of common sense out there. “ “English and Spanish.”

“Community colleges are an ideal place to teach construction technology, more classes for credit not certificates.”

“Community colleges with development in technology like modeling and modularization. Keep branding it as a professional career.”

“A good construction management program. The recent graduate in engineering does not know more about construction than the English literature major.

Construction Managers are needed.”

“High Schools need to make a concerted effort to re-brand construction Trades to make them much more understandable as a valuable career path.”

The Critical Path - Key Findings and Recommendations 31

Policy Recommendations The study team combined the primary information gathered from the survey with the findings from the literature review to produce a set of strategies for Maryland construction stakeholders, including industry business owners, state policymakers, the Maryland State Department of Education, and state colleges and universities. These strategies correspond with a list of action items that are outlined on the following pages. #1 Create or expand construction education programs at Maryland four-year institutions to meet the demands of Maryland construction companies; #2 Better align K-12, high school Career and Technical Education (CTE), community college, and apprenticeship programs with new construction skill requirements; #3 Create or strengthen articulations between high schools, CTE programs, apprenticeships, community colleges, and universities to define educational pathways for a career in construction; #4 Create a public image campaign to convey attractive constructionrelated career options; #5 Create a strategy to include demographic groups that have not historically participated in the industry’s workforce; and, #6 Recognize and adapt to the substantial technological changes in the construction environment necessary to keep the industry competitive.

32

Maryland Center for Construction Education and Innovation

“

In Maryland, if something can be done, it will get done. There is the will, size and forethought to make this happen.

”

Policy Recommendation #1 Create or expand construction education programs at Maryland four-year institutions to meet the demands of Maryland construction companies.

Maryland has two institutions that have bachelor’s degree programs in construction management: the University of Maryland Eastern Shore (UMES) and Morgan State University. In addition, the University of Maryland College Park has a bachelor’s degree program in civil engineering with construction management emphasis. However, the output of students with construction-related degrees from these institutions is insufficient to meet the demand of the state’s industry.

Moreover, there are no four-year construction education programs in Western Maryland.

A significant trend in survey participant responses is that ideal university programs should offer significant work-study components.

The ultimate objective is to provide practical, onsite field experience that emphasizes technical, communications, business, and leadership skills. Industry leaders indicate that there is a need to:

•

• •

•

•

Convene a special purpose task force comprising industry, postsecondary education, the Governor’s Workforce Investment Board, and Maryland Higher Education Commission representatives to formulate what an ideal university-level program should encompass; Quantify the annual demand for construction related degreed students from Maryland’s construction industry through further research and analysis; Work with UMES and Morgan State and select other appropriate institutions to expand or develop in-state programs to meet industry demand. Ideally, the chosen institution(s) should offer undergraduate degrees in engineering, design, business, computer sciences, environmental studies, and/or geoscience. It may be the case that only a much larger university is able to fully supply the technology and faculty necessary to produce the next generation of construction leaders; Benchmark other university programs for optimal program structure and consider adding other programs such as a bachelor’s degree in building technology or industry group accredited programs; and, Provide bachelor’s degree programs that fully accept relevant associate degree programs from community colleges.

“

We don’t compete with the Penn States of the world. Maryland does not have the programs.

Without more programs, the industry will fall behind.

“

”

I would like to see a 4 year degree with a work-study component. Grads from college with two years relevant experience are vastly important.

”

36%

of survey participants were unaware that Maryland has existing bachelor’s degree programs in construction management.

Exhibit 33

Does Maryland Need Another 4-Year Degree Program in Construction Management?

Yes - 65%

No - 34% 1%

The Critical Path - Key Findings and Recommendations 33

Policy Recommendation #2 Better align K-12, high school CTE, community college, and apprenticeship programs with new construction skill requirements.

High school remains the basic foundation for career readiness and critical thinking, but the career readiness currently provided by a high school diploma does not meet the needs of the construction industry.

Ongoing changes in the industry necessitate continued investment in training at all educational levels, with community colleges and apprenticeship programs serving as vital elements. This investment will mitigate the skills shortages that are already apparent and provide immediate employment and skills-generating opportunities to high school and college graduates. Industry leaders suggest the following:

“

means is that everyone on a roofing crew has a BA degree.

”

A Great Start: MSDE’s Construction Design and Management Program

• Increase engagement of construction professionals with school program advisory boards and the education community;

MCCEI and the Maryland State Department of Education (MSDE) have started addressing the alignment between industry demand and Career and Technical Education (CTE). Through partnership with MSDE and industry representatives, a new CTE program is being developed called the Construction Design and Management program. This is a 4 course program where high school students will learn about the design and construction process through project based learning. The courses are: 1. Introduction to Construction Design and Management 2. Principles of Construction Design 3. Advanced Design and 3-D Modeling 4. Advanced Construction Management

• High school Career and Technical Education (CTE) programs

and community college advisory boards are encouraged to use MCCEI and its industry partners as a resource for technology and workforce trends; • Identification of promising and engaged students for internships and mentorships; • Emphasis on CTE program elements including hands-on field and jobsite experience, mentorships and internships, articulations with apprenticeship programs, community colleges, and universities, Building Information Modeling (BIM), Integrated Project Delivery (IPD), and communication and interpersonal skills; • Enhance and expand Technology Education classes in Maryland’s middle schools. Include a focus on three-dimensional modeling, analytical thought, processes and scheduling, and hands-on experience with tools and software; • Enhance and expand community college level education and training opportunities through additional support and investment both directly and through organizations like the Construction and Energy Technologies Education Consortium (CETEC); • Develop a universally accepted apprenticeship format with standardized criteria that will be recognized by employers in both union and merit shops; and, • Establish the BIM Institute of Maryland to bridge the widening gap between advances in building technology and industry participants.

When everyone has to go to college, all that

Exhibit 31

Top Areas for Investment and Promotion to Best Serve the Construction Industry 30% College Level Construction Management/Engineering 27% High School CTE 18% Better Marketing of Programs/Career Options 14% Trade Schools and Apprenticeships 5%

More Industry Involvement

Exhibit 34

Top Recommended Concentrations for Maryland’s Education System to Best Serve the Construction Industry BIM, Design, Computer Technology

Field Experience

Math/STEM

Communications, Interpersonal Skills

22%

19%

17%

17%

34

Maryland Center for Construction Education and Innovation

11% Career Readiness; 8% Other Education; 7% Business Management

11%

8%

7%

Policy Recommendation #3 Create or strengthen articulations between high schools, CTE programs, apprenticeships, community colleges, and universities to define educational pathways for a career in construction.

Education pathways for careers in construction are needed to develop the necessary industry skills and attract talent. While articulation between CTE programs, community colleges, apprenticeships, and four-year institutions in Maryland exist, there is little apparent public knowledge beyond guidance counselors and program administrators.

Without that transparency and connectivity, students will continue to lack interest in construction career pathways. To create pathways, the following steps should be taken:

• Establish formal articulation agreements where and when

feasible; • Benchmark neighboring states and establish a best practices model for Maryland that allows for maximum flexibility and credit for high school and CTE achievement to count toward associate’s degrees and apprenticeships; • Create a statewide database and user tool for articulation like Artsys for all education sources; • Provide wage, income, and benefits information to potential workforce entrants; • Articulate high school CTE programs and apprenticeships with community colleges; • Offer “two plus two” programs with four-year universities.

• Reduce redundancy between classroom and apprenticeship training as appropriate—for example, more apprenticeship programs could accept CTE credits; and, • Align apprenticeship programs with community college or fouryear university programs.

“

Improve articulation agreements and reach the parents - show a clear pathway to college credits.

“

”

Technical vs. management vs. theoretical, create and define the pathways. Many people

”

have no clue about the career opportunities.

Exhibit 35

Industry Opinion on General Education Levels Necessary for Relevance Over the Next 5 Years

65%

28%

7%

Increase

Stay Same

Decrease

Exhibit 36

Education Levels and Trends for Construction Professionals Job Category

Preferred Education Attainment

10 Year Trend

Managerial

Bachelor’s Degree

Shifting slightly towards master’s degree

Site Superintendent

Apprenticeship

Shifting rapidly towards bachelor’s degree

Skilled Trades

Apprenticeship

Shifting rapidly towards apprenticeship plus associate’s degree

General Labor

High School Diploma

Shifting moderately towards apprenticeship

The Critical Path - Key Findings and Recommendations 35

Policy Recommendation #4 Create a public image campaign to convey attractive construction-related career options.

Construction’s traditional image limits the industry’s ability to recruit exceptional candidates. A public campaign that conveys the exciting, attractive opportunities and broad experiences of a career in construction would improve the image of the industry and encourage recruitment of highly skilled individuals. While construction executives are aware of some career pathways and opportunities that exist, parents, guidance counselors and potential career seekers may not.

The public image campaign should:

“ “

not a high tech instrument.

”

In construction, you have a huge sense of accomplishment at end of the day. You can see a positive impact on the community by

• Mimic other successful recruitment campaigns, such as those

developed by branches of the U.S. military; • Focus on the occupational categories that require a postsecondary degree, including engineering, architectural, and managerial categories; • Encourage construction stakeholders to reach out to parents, career counselors, and students, to help them learn about the potential salaries, careers, and career pathways; • Make a concentrated effort for promotion of continuing education opportunities for the existing construction workforce through Maryland’s community college network; • Emphasize that specialized training and education beyond high school is needed to be competitive; • Present construction as a high-tech industry, with emphasis on digitization, modularization/manufacturing, environmental science, and materials science; and, • Emphasize the merits of production, the technical character of the industry, opportunities for high wages, and the growing demand for construction skills;

Kids want to be in high tech. A hammer is

what you build.

”

• Utilize social media platforms for branding and promotion to

increase awareness of the campaign and the industry’s evolving image; • Promote technical construction careers as part of the pathway to business ownership; • Support CETEC’s efforts to build employer awareness of the existing and extensive inventory of construction and skilled trades programming in MD’s community colleges; • Emphasize sustainability to underscore the proper balance between economics and the environment; and • Consider possible partnerships between the industry and the community through charitable activities to attract new and diverse workforce entrants.

Exhibit 27

Top Responses on Obstacles to Recruiting People to the Construction Industry

19% Percieved Low Pay, Dangerous, Manual Labor

36

16% Negative Perception

14% Industry Negatively Impacted by Recession

12% Boom-Bust, Cyclical

Maryland Center for Construction Education and Innovation

11%

9%

Not a College Track Career in High School

Poor Industry Promotion and Understanding

7% Competition from Other Careers

Policy Recommendation #5 Create a strategy to include demographic groups that have not historically participated in the industry’s workforce.

Given the changing needs of construction, the industry will need access to the entire labor pool across all races, ethnicities, genders, and ages, to attract ideal candidates. Diverse labor is vitally important to the construction industry and should be encouraged, mentored, and nurtured for expanding roles in the industry. To attract a more diverse workforce, the industry should:

• Structure the public image campaign to be inclusive of nontraditional and diverse participants; • Create or expand mentorship opportunities between industry practitioners and students using the ACE Mentorship Program as a benchmark; • Assemble a special focus task force to target opportunities for diversity with an emphasis on: • High school/GED attainment, • “Career pathway” programs using contextual accelerated learning strategies to advance worker skills (Department of Labor, Licensing and Regulation; community colleges; workforce investment boards; and CBOs), • Three-dimensional modeling, • General business knowledge and training, • Related apprenticeship and community college offerings, and • English as Second Language (ESOL) programs in high schools; and, • Adopt social media platforms for job searches to reach a more diverse labor pool.

“ “

A diverse workforce has a massive impact to the good. Forces people to improve.

”

Construction will always need labor - someone HAS to do it. This is how companies start.

”

71%

of survey participants did not think either the Maryland education system or the industry itself is doing enough to create a future construction workforce pipeline.

Exhibit 37

Top Opinions from Interview Companies on Future Workforce Pipleline Development

31% Stronger Focus on CTE, Apprenticeships, and Career Pathways

23% Industry Needs to Better Partner with Education

19%

16%

Change Negative No Changes Industry Perception Needed

5%

5%

Less Emphasis on College, More Emphasis on Technical Careers

Immigration is the Future Workforce

The Critical Path - Key Findings and Recommendations 37

Policy Recommendation #6 Recognize and adapt to the substantial technological changes in the construction environment necessary to keep the industry competitive.

Technology is revolutionizing the construction industry in terms of process, materials, logistics, waste reduction, and increased efficiency. Opportunity exists for the Maryland construction industry to become an export leader by focusing on modular construction and related training as well as advanced engineering and design that improve safety and efficiency. These growth areas need to be recognized and related education and training need to be developed to keep companies competitive in world markets. To enhance competitiveness, the industry should:

On BIM, Modular and Prefab

“ “

• Adopt BIM and IPD to increase efficiency and reduce waste—institutional and governmental users have already shifted over to these technologies; • Adapt to modular and prefabricated construction to increase efficiency, improve quality, and reduce price; • Adopt new contracting and delivery models (such as designbuild, design-assist, Guaranteed Maximum Price [GMP], or hybrid contract models) to mitigate risks, accelerate schedules, and reduce budgets; • Embrace new deal structures including public-private partnerships (P3s), equity investments, and builder-developer teams; and, • Diligently pursue modular building and prefabrication component operations for expansion or relocation to Maryland through economic development activities and initiatives, leveraging the state’s transportation networks and export capacities.

It is game changing. We are on the precipice

”

on how buildings are built.

People don’t know what modular and prefab really is. Need to educate on 3D and up, it’s the way to go.

Exhibit 13

Interview Participant Opinions on Changes to Construction Processes through 2020 34% Increase in BIM/IPD/GPS/Communications 18% Will Require a Different Business Approach 15% Increase in Prefab/Modular/Materials 10% New Contracting/Procurement Methods 5%

Constriction in Labor Supply

4%

Cutthroat Environment/Industry Consolidation

3%

Green Building

1%

Renovations/Retrofits

10% Other

Skanska USA

38

”

Maryland Center for Construction Education and Innovation

Citations 1. McIlwain, John (2010). “Housing in America: The Next Decade”. Washington, D.C.: Urban Land Institute.

2. Ibid.

3. Ibid 4. PWC and Urban Land Institute (2011). “Emerging Trends in Real Estate 2012”. Washington, D.C. 5. Office of the Federal Environmental Executive (2003).

6. U.S. Green Building Council (2011). “What Is LEED”. Last Accessed Jun. 6 2012.

7. USGBC Homepage. Last Accessed Jun. 14 2012.

8. Nelson, Andrew J. (2007). “The Greening of U.S. Investment Real Estate: Market Fundamentals, Prospects and Opportunities”. RREEF Research.

9. McGraw-Hill Construction (2011). Mitigation of Risk in Construction: Strategies for Reducing Risk and Maximizing Profitability.

10. Krygiel, E. (2008). Chapter 2: Building Information Modeling. From Green BIM: Successful Sustainable Design with Building Information Technology. Wiley.

11. McGraw-Hill Construction (2011). Mitigation of Risk in Construction: Barton Malow Construction Services Strategies for Reducing Risk and Maximizing Profitability.

12. Krygiel, E. (2008). Chapter 2: Building Information Modeling. From Green BIM: Successful Sustainable Design with Building Information Technology. Wiley.

13. Kieran S. & Timberlake, J. (2004). Chapter 4. From Refabricating Architecture: How Manufacturing Methodologies Are Poised to Transform Building Construction. New York: McGraw-Hill.

14. *Between 05/28/2009 and 07/02/2009, McGraw-Hill administered an online survey to AEC firms, which accrued 2,228 complete responses. Architects, engineers and contractors accounted for 79 percent of the sample population.

15. McGraw-Hill Construction (2009). The Business Value of BIM: Getting Building Information to the Bottom Line.

16. “High Growth Industry Profile – Construction.” Accessed May 11, 2012. http://www. doleta.gov/brg/indprof/construction_profile.cfm.

17. “Image Makeover and Training Basics Expand the Pipeline to Dynamic Construction Careers.” Accessed May 7, 2012. http://www.coeccc.net/Environmental_Scans/Const_Scan_ NFN_05.pdf.

18. “The Workforce Skills and Training Ohio Green Industries Need.” Accessed May 14, 2012. http://ohiolmi.com/green/reports/Pt3SkillsTraining.pdf.

19. “Green Workforce Development.” Accessed May 7, 2012. http://www.imt.org/files/FileUpload/files/Commercial%20Energy%20Policy%20Fact%20Sheet%20-%20Green%20Workforce%20Development.pdf.

20. “Image Makeover and Training Basics Expand the Pipeline to Dynamic Construction Careers.”

21. “High Growth Industry Profile – Construction.”

22. “AFL-CIO Center for Green Jobs.” Accessed May 9, 2012. http://www.workingforamerica. org/documents/greenjobs.asp 23. “Maryland’s Construction Industry Workforce Report.” Assessed May 9, 2012. http:// www.gwib.maryland.gov/news/constenforum/constructionlayout.pdf The Commercial Group 24. “Increase the number of Marylanders who receive skills training by 20% by the end of 2012.” Accessed May 7, 2012. http://www.statestat.maryland.gov/GDU/3SkillsDeliveryPlan. pdf 25. U.S. Department of Education. (April 2012). U.S. Department of Education Releases Blueprint to Transform Career and Technical Education. Available at http://www.ed.gov/news/ press-releases/us-department-education-releases-blueprint-transform-career-and-technicaleducat.

The Critical Path - Key Findings and Recommendations 39

Parting Shots

“

With so many technical advancements in construction, people can’t perform at level needed and when they are not willing to do so, they get antiquated.

“

”

This industry needs better public relations and marketing. We have to sell the entire building process a as career. It is better to educate young people of the endlessness of the opportunities in the construction industry.

“

”

The best construction management program is at Virginia Tech. That’s where we hire from. So yes, Maryland should model the Virginia Tech program.

On Areas to Improve:

“

”

Leadership – we

are managers and our resource is people.

“

In construction, there is a lot of pride.

”

At the end of the day, you’ve made

”

something.

“

With a 4 year degree, 2+2, community college, people need understanding of business…business exists to make money, profit is not an ugly word.

“

”

Companies that survive will find a way to maximize productivity; must improve to survive.

”

On whether prefabrication and modular construction will advance:

“

Yes 100%! If

anyone is thinking and awake today, yes.

Keast and Hood Engineering. Thomas Point Shoal Lighthouse Structural Repairs.

40

Maryland Center for Construction Education and Innovation

”

Acknowledgements

Production

The Critical Path was produced by MCCEI and a consultant team of Sage Policy Group, Inc. and the Regional Economic Studies Institute (RESI) of Towson University. Charts and graphs are the product of MCCEI unless otherwise noted.

MCCEI Staff Contributors Robert M. Aydukovic, CRE Lauren C. Mari

This report would not have been possible without the support and cooperation of our partner organizations and dedicated Board of Trustees. We cannot thank you enough.

MCCEI Interns Charles P. Kerrigan Simeon T. E. Williams

Special thanks to: • All of the interviewees that took the time to meet with and talk to MCCEI staff and consultants to share their views on the future of the construction industry.

• The Governors Workforce Investment Board.

• The Department of Labor, Licensing and Regulation, state of Maryland.

• The Maryland Economic Development Corporation.

• Towson University, Division of Innovation and Applied Research.

About MCCEI

MCCEI is an independent 501-c-3 corporation that was formed through the Governor’s Workforce Investment Board. The primary missions of the MCCEI are to work in partnership with business and government to build a worldclass education system for Maryland’s construction industry, promote construction as a career of choice and to serve as an information marketplace for the industry and potential career seekers.

About Sage Policy Group

Sage Policy Group, Inc. is an economic and policy consulting firm specializing in economic, fiscal and legislative analysis, program evaluation, and organizational and strategic development. The firm’s clients include public agencies at every level of government, multinationals, law firms, developers, money managers and an array of nonprofit organizations operating in a variety of segments.

About The Regional Economic Studies Institute Towson University’s Regional Economic Studies Institute (RESI) is a leading expert on Maryland’s economy. RESI provides a vast array of services include economic forecasting, economic and fiscal impact analysis, market studies, workforce and commuter analysis, and human services analysis. RESI dedicates itself to providing the highest level of services to decision-makers in the private, public, and nonprofit sectors while emphasizing an interdisciplinary approach that combines knowledge with technology.

Contributing Consultants Anirban Basu Chairman and CEO Sage Policy Group, Inc. Carl DeLorenzo Chief Operating Officer Sage Policy Group, Inc. Rebecca Ebersole Research Associate, RESI Towson University Sharyn K. Grove Design Manager Towson University Milton Hunt President Hunt International Daraius Irani, Ph. D. Executive Director, RESI Towson University Bobbie K. Laur Director, External Affairs Towson University Lauren Moore Research Associate Sage Policy Group, Inc. Printing Schmitz Press Sparks, Maryland

The Critical Path - Key Findings and Recommendations 41

Conclusion Maryland has an opportunity to provide a comparative advantage to the state’s workforce and construction firms by providing more and better programming in the areas of construction management, industry software and skilled craftsmanship (electricians, carpenters, masons, etc.). Emphasis should be upon a new 4-year program in the area of construction management, specialized training in specific software including BIM, training in green construction and modularization, and combined academic/apprenticeship programs for skilled craftspeople.

According to survey respondents, a shortage of skilled craftsmen and construction supervisors emerged during the past 5 years. This is simply remarkable given that over this period, residential construction activity slipped by nearly two-thirds and nonresidential construction declined by roughly a quarter. This is a reflection of a lack of suitable educational programming, apathy among the young and a period of rapid retirement.

broadly diffused over the next decade include BIM, VDC, GPS, and newly emerging construction-related software. Part of this shift toward greater capital intensity and technology is the ongoing shortage of construction talent, which has led construction firms to scramble to find alternative production methods.

While BIM and other technologies are expected to become everyday tools in the near future, survey respondents reported a concern that very few workers are presently skilled in these programs. This represents an important source of opportunity for local high schools, colleges and universities and a potential source of competitive advantage for both individual workers and local companies in Maryland alike.

With retirement expected to be elevated and with ongoing apathy among younger workers, skills shortages going forward are likely to be far more significant. This is true not only for demographic reasons, but also for reasons of technology and process. Green building, design-build and other technological/process shifts are not only increasing the demand for certain types of workers, but creating demands for retraining. Many survey respondents have emphasized ongoing training of their existing workforce, particularly in the areas of management/leadership, communications, BIM, other computer software and LEED certification.

The increased use of technologies such as BIM and GPS collectively represent the most dramatic sources of change in the way construction will be delivered over the next ten years. According to 55 percent of survey respondents, technologies expected to be the most

Hord Coplan Macht

MCCEI Board of Trustees Officers

Members

Martin G. Knott, Jr.

Vance Ayres

Chairman, MCCEI President Knott Mechanical Hunt Valley, Maryland

Dyan Brasington

Secretary/Treasurer, MCCEI Vice President Towson University Towson, Maryland

Gino Gemignani

Vice Chair, MCCEI Senior Vice President The Whiting-Turner Contracting Company Baltimore, Maryland

Michael Henderson

Officer, MCCEI President ABC Baltimore Metro Chapter Towson, Maryland

President Maryland & DC Building Trades Council Executive Secretary-Treasurer Washington DC Building Trades Council Camp Springs, Maryland

President and Owner Corman Construction Annapolis Junction, Maryland

Ronald DeJuliis

Chairman Chaney Enterprises Waldorf, Maryland

Commissioner, Division of Labor and Industry Department of Labor, Licensing and Regulation (DLLR) Baltimore, Maryland

Bernard A. “Andy” Cheezum

Katharine Oliver

Francis “Frank” H. Chaney, II

Vice President and Principal Willow Construction Easton, Maryland

42

William Cox

Maryland Center for Construction Education and Innovation

Deputy Superintendent Maryland State Department of Education Baltimore, Maryland Washington, DC

A number of construction industry leaders indicated that many of their recent recruits do not come from Maryland. This represents another indication that Maryland’s educational infrastructure has not served the local construction industry well in recent times. Thanks to the MCCEI survey, there is now concrete information telling educators just how they can change with the industry going forward.

Penza + Baliey Architects

Designees Lynn Reed

Executive Director Governor’s Workforce Investment Board (GWIB) Baltimore, Maryland

Bernard J. Sadusky, Ed.D. Executive Director Maryland Association of Community Colleges Annapolis, Maryland

Eric Seleznow

State Policy Director National Skills Coalition Washington, DC

Adam E. Snavely President and CEO Poole & Kent Baltimore, Maryland

Jean Henry

Mary O’Connor

Pat Mikos

C. Edward Poarch, II

Director Construction and Energy Technologies Education Consortium (CETEC) Catonsville, Maryland Program Manager, Division of Career and College Readiness Maryland State Department of Education Baltimore, Maryland

Program Manager Governor’s Workforce Investment Board (GWIB) Baltimore, Maryland Director, Maryland Apprenticeship and Training Department of Labor, Licensing & Regulation Baltimore, Maryland

The Critical Path - Key Findings and Recommendations 43

7400 York Road, Suite 302 Towson, MD 21204 410-704-5981 office 410-704-3684 fax www.mccei.org

44

Maryland Center for Construction Education and Innovation