FONTANA, Calif. — At a steel factory dwarfed by the adjacent Auto Club Speedway, Fernando Esparza is working toward his next promotion.
Esparza is a 46-year-old mechanic for Evolution Fresh, a subsidiary of Starbucks that makes juices and smoothies. He’s taking a class in industrial computing taught by a community college at a local manufacturing plant in the hope it will bump up his wages.
It’s a pretty safe bet. The skills being taught here are in high demand. That’s in part because so much effort has been put into encouraging high school graduates to go to college for academic degrees rather than for training in industrial and other trades that many fields like his face worker shortages.
Now California is spending $6 million on a campaign to revive the reputation of vocational education, and $200 million to improve the delivery of it.
“It’s a cultural rebuild,” said Randy Emery, a welding instructor at the College of the Sequoias in California’s Central Valley.
Standing in a cavernous teaching lab full of industrial equipment on the college’s Tulare campus, Emery said the decades-long national push for high school graduates to get bachelor’s degrees left vocational programs with an image problem, and the nation’s factories with far fewer skilled workers than needed.
“I’m a survivor of that teardown mode of the ’70s and ’80s, that college-for-all thing,” he said.
This has had the unintended consequence of helping flatten out or steadily erode the share of students taking vocational courses. In California’s community colleges, for instance, it’s dropped to 28 percent from 31 percent since 2000, contributing to a shortage of trained workers with more than a high school diploma but less than a bachelor’s degree.
Research by the state’s 114-campus community college system showed that families and employers alike didn’t know of the existence or value of vocational programs and the certifications they confer, many of which can add tens of thousands of dollars per year to a graduate’s income.
“We needed to do a better job getting the word out,” said Van Ton-Quinlivan, the system’s vice chancellor for workforce and economic development.
High schools and colleges have struggled for decades to attract students to job-oriented classes ranging from welding to nursing. They’ve tried cosmetic changes, such as rebranding “vocational” courses as “career and technical education,” but students and their families have yet to buy in, said Andrew Hanson, a senior research analyst with Georgetown University’s Center on Education and the Workforce.
Federal figures show that only 8 percent of undergraduates are enrolled in certificate programs, which tend to be vocationally oriented.
The United States has 30 million jobs that pay an average of $55,000 per year and don’t require a bachelor’s degree, according to the Georgetown center. People with career and technical educations are actually slightly more likely to be employed than their counterparts with academic credentials, the U.S. Department of Education reports, and significantly more likely to be working in their fields of study.
At California Steel Industries, where Esparza was learning industrial computing, some supervisors without college degrees make as much as $120,000 per year and electricians also can make six figures, company officials said.
Skilled trades show among the highest potential among job categories, the economic-modeling company Emsi calculates. It says tradespeople also are older than workers in other fields — more than half were over 45 in 2012, the last period for which the subject was studied — meaning looming retirements could result in big shortages.
High schools and community colleges are the keys to filling industrial jobs, Hanson said, but something needs to change.
“You haven’t yet been able to attract students from middle-class and more affluent communities” to vocational programs, he said. “Efforts like California’s to broaden the appeal are exactly what we need.”
Aside from marketing the programs differently and making them simpler to find and apply for, California is trying to ease the process through which individual campuses can add new programs that could help local businesses. If a region needs respiratory therapists, for example, community colleges will be able to avoid some of the red tape that previously hampered their flexibility to train new therapists.
“We definitely wanted to get out of the colleges’ way,” Ton-Quinlivan said.
The industrial course in which Esparza is enrolled is run by nearby Chaffey College through the community college’s InTech Center, a partnership with California Steel and other local manufacturers. At its completion, Esparza will have new skills he hopes will translate into a promotion and a raise of $4 or $5 per hour.
Like his classmates, Esparza, who starts work at 6 a.m., is looking at the class as a moneymaker for him.
“It feels very comfortable for me,” he said. And then, like many Californians, he reflects on his commute. “I don’t even have to catch a freeway to get here. How can it get better?”
But it can get better in California, where 30 percent of all job openings by 2025 — more than a million jobs — will require some post-high school education, according to the state’s community college system. Some on the industry side of the equation say that while colleges should have spent the past few decades building tighter bonds with local companies, those companies share the blame for vocational education’s tattered reputation.
Residents who have watched manufacturing companies relocate overseas may have not wanted to encourage their children to learn manufacturing-related skills, said Sam Geil, a Fresno, California, business consultant and adviser to the San Joaquin Valley Manufacturing Alliance.
“It doesn’t help when industry is moving out and laying people off,” Geil said. “It’s the relationship that industry has with the community. Industry could do a better job communicating.”
As with a lot of education challenges, money is also a big problem.
While a humanities class such as English costs a college just $52 per student credit, a respiratory therapy class costs $265, according to a 2013 report by the Institute for Higher Education Leadership & Policy. Equipment and trained instructors in some specialty fields can be prohibitively expensive for a college.
With state budgets in constant flux, colleges and experts say it’s essential that companies help pay for educational programs that directly benefit them. While that kind of cooperation has been rare, Chaffey College’s InTech Center is an example of how it could work.
California Steel chipped in $2 million for the education center, which it leases to Chaffey for $5 per year, said Sandra Sisco, the school’s director of economic development. Other local companies and colleges have invested, too. The center served about 1,300 students in the past year and plans to grow, she said.
The steel company agreed to work with Chaffey mostly because it was having trouble finding enough trained workers, said Rod Hoover, its human resources manager. And if California Steel’s competitors benefit from the classes on the factory campus, many of which provide skills useful in steelmaking, so be it.
“It was the right thing to do for our community,” Hoover said. “The selfish reason was because we needed craft workers and it was inconvenient to send them elsewhere.”
The InTech Center specializes in quick courses that help students like Esparza get ahead in their jobs, Sisco said.
“The reputation of the colleges being archaic and slow is still out there,” she said. As with many perceptions of vocational education, Sisco said, “That’s not necessarily true.”
Although a large percentage of InTech students are older than traditional-aged college students, Chaffey is trying to encourage younger ones to focus early on their career training.
The strategy worked with 17-year-old Derrick Roberson, who graduated in the spring from Montclair High School and is taking an industrial maintenance electrical and instrumentation InTech course as he trains to be an electrician.
Vocational courses in high school were seen as second-class, Roberson said.
“All throughout high school, they made it sound like going to college was our only option,” he said. “After you go to college, where do you go? It can open doors for you, but not as much as they make it seem.”
Career education boosters also say job-focused courses — and accompanying apprenticeships — can provide students with essential “soft skills” such as communication and conflict resolution that foster teamwork and reduce stress. And schools should consider blending traditional college courses with vocational ones, said Sean Gallagher, who recently founded Northeastern University’s Center for the Future of Higher Education and Talent Strategy.
“It’s often either vocational training or liberal arts,” Gallagher said. “But if you look at what employers want, it’s both, and I think that’s often lost in the dialogue today.”
This story was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up here for our higher-education newsletter.
OKC-area home sales increase in 2018 By: Molly M. Fleming The Journal Record " March 4, 2019
OKLAHOMA CITY – Homes priced at less than $200,000 were in high demand in 2018, and that demand isn’t expected to slow this year.
Closed single-family home sales were up 4.1 percent compared to 2017, according to MLSOK’s year- end report, which was released Feb. 26. The median sales price increased almost 3 percent to $167,500.
MLSOK’s figures include statistics
from Edmond, Altus, El Reno, Midwest City, Moore, Yukon, Piedmont, Elk City, Oklahoma City, Weatherford, Norman, Del City, Shawnee, Mustang
and Nichols Hills.
Keller Williams Elite Broker Jennifer Arsenault said within a 40-mile radius, the metro has about two months of inventory, though there’s even more houses available in the higher price ranges.
“In the housing market, you want to see five to six months of inventory,” she said. “It’s a seller’s market when you have less than five months.”
The area that saw the biggest increase in new listings and pending sales was the 73064 ZIP code, which includes Mustang’s city limits and some of the school district. In that ZIP code, there was a 27.7 percent increase in pending home sales and a 20.6 percent increase in new listings.
Monty Strickland, managing broker of Realty Experts in Moore, said that while he works in the Moore area, he’s also seen a lot of deals in Newcastle and Blanchard.
He said he thinks there’s opportunity now for people in a lower-priced home to move into a higher-end home, which would free up the lower-priced home. Arsenault made a similar observation about the market.
“People that are holding onto their properties – now is a great time to move up,” he said. “They should definitely take advantage of that.”
The price range with the shortest market time was $150,000 and less, while the highest market time is for homes priced $450,001 and higher.
Arsenault said the higher-end price range isn’t stagnant, but moving slowly. Her firm has completed several deals in the luxury market, she said.
“We see a lot of cash deals with property going under contract,” she said. “It’s ones that are in great locations and look good. The money’s out there.”
Overall, she said 2018 stood out to her because typically in an election year, the sales slow down in September into the election, then pick back up in November and December.
That didn’t happen this year, she said. There’s a strong need for homes under $200,000, especially with such a competitive investor market.
Oklahoma State Home Builders Association Executive Vice President Mike Means said he thinks there will be about a 5 percent increase in newly built homes. Even as lumber prices have come down for the ninth month in a row, there’s a need for land.
“One of the biggest issues we have right now is there aren’t available lots,” Means said. “We have developers that are trying to get more land and get them ready to build.”
But it’s hard to find land in a good school district, Means said. There’s also a need for higher-paying jobs.
“Even the economists in Oklahoma will tell you that we’re creating a lot of jobs, but they’re not high-paying jobs,” Means said.
The OSHBA is doing what it can to reduce the costs of new homes. It has requested a bill to stop cities from regulating the aesthetical design standard. He said when a city requires brick when siding could suffice, that makes the home more expensive.
In Oklahoma, a $1,000 increase in a home’s price can keep 1,993 households from being able to afford it. In Oklahoma City, the $1,000 price uptick equates to 504 families getting priced out, according to study by the National Association of Home Builders.
Strickland said he’s optimistic about 2019. He said a lot of people were waiting out 2018 to see what would happen with interest rates, and he thinks they’ll finally make a literal move in 2019. He expects as the baby boomers continue to downsize, their homes will offer great opportunities for buyers.
February is Heart for the Hungry month at the Community Food Bank of Eastern Oklahoma and Dolese Bros. Co. announced the continuation of its partnership with the Food Bank. Dolese will match all donations made to the Food Bank through the nonprofit’s Volunteer Center up to $20,000. Once met, this match will provide the equivalent of 160,000 meals for chronically hungry children, hardworking families, veterans and seniors with inconsistent access to food.
“Dolese and its employees believe in the importance of playing an active role in the communities where we work, live and play,” Dolese Communications and Community Relations Director Kermit Frank said. “Last year, we were excited to support this landmark opportunity to help address Oklahoma’s fight against hunger in our communities. Dolese saw a natural fit with the mission of the Community Food Bank of Eastern Oklahoma and we look forward to continuing this opportunity to multiply our efforts. We challenge others to join us in the fight to end hunger in Oklahoma.”
Oklahoma is one of the hungriest states in the nation. In fact, one in six Oklahomans struggles with hunger. Thanks to volunteers and donors, the Food Bank furnishes enough food to provide the equivalent of 450,000 meals every week to Oklahomans who are hungry.
The Food Bank relies on the business community in order to achieve its goal of making sure food support is available 365 days a year for unforeseen situations, like the recent federal shutdown. In the last fiscal year businesses donated on average $79,000 a month, which can provide the equivalent of 316,000 meals.
“When unusual circumstances manifest for ordinary people, like the recent federal government shutdown, it truly emphasizes the importance of corporate partnerships,” Community Food Bank of Eastern Oklahoma Executive Director Eileen Bradshaw said. “Each and every dollar donated through the Dolese Delivers Match, enables the Food Bank to provide eight meals in creative and flexible ways for people who suddenly find themselves in need of food assistance. I want to thank Dolese and our generous volunteers for supplying a strong foundation in the fight against hunger.”
Volunteers at the Food Bank can make donations in the Volunteer Center with either credit cards or cash to the Dolese Delivers Match. The Food Bank is located at 1304 N. Kenosha Ave. just north of downtown Tulsa.
Last fiscal year, about 10,000 volunteers donated over 68,000 hours of their time at the Community Food Bank of Eastern Oklahoma. Volunteers are needed year-round to help fight hunger. Tasks include bagging and boxing food products, packing Food for Kids bags, working in the Culinary Center, and more. The Food Bank welcomes both individual and group volunteers. Shifts are available Monday through Saturday. To view available opportunities and register to volunteer, visit okfoodbank.org/volunteer.
For more information about the Dolese Delivers Match, contact Regan Leake at email@example.com or 918-936-4551.
Founded in 1902, Oklahoma-City based construction materials provider Dolese operates more than 60 facilities - including 6 ready-mix concrete plants in the Tulsa vicinity, with over 1,000 employees in two states. They take great pride in supporting and improving communities around them.
Established in 1981, the Community Food Bank of Eastern Oklahoma is a member of the Feeding America network and is the largest private hunger-relief organization in eastern Oklahoma. Last fiscal year, the nonprofit distributed 28.1 million pounds of food and products through a network of more than 720 programs and partner agencies in 24 eastern Oklahoma counties. For more information about the Food Bank visitokfoodbank.org or call 918-585-2800.
Trades training is an attractive alternative to student loans for frugal Gen Zers, who seek financial success and entrepreneurial opportunities at a young age.
On top of the technology disruption and skilled labor shortages already underway, the construction industry is entering a demographic reshuffle as baby boomers continue to retire and a new crowd of young people makes its way to the industry.
Millennials have been, and continue to be, the target of training and recruitment strategies for many construction firms. While the defined age ranges for this generation vary, Pew Research carves out the years 1981 to 1996, putting millennials at ages 23 to 38 this year — well into adulthood and already on a career track, for the most part.
To better attract the next up-and-comers, a number of organizations are turning their focus to a newly defined group of young people: Generation Z. They were born between about 1995 and 2010 (ages 9 to 24), and while the research is early-stage, it looks like the financially prudent, entrepreneurial and hands-on aspects of construction will appeal more to these individuals than their millennial predecessors.
The higher ed skeptics
Student loan debt is second only to mortgage debt in the U.S., with students of the Class of 2017 graduating with an average of $39,400 in loans, according to advisory firm Student Loan Hero. But studies suggest that Gen Zers — who may have watched an older sibling struggle to afford rent or a down payment, for example — will be more hesitant to take on this financial burden and aren’t sure if the value is worth the expense.
Growing up post-9/11 and the Great Recession, this generation is in “survival mode,” according to the book “Gen Z @ Work.”While watching their Gen X parents weather the economic downturn, they’ve learned that there are clear winners and losers, and are fighting to make good financial decisions early on. National studies of 4,000 teenagers conducted for the book found that drowning in college debt is the No. 1 concern for 66% of Gen Zers, Fast Company reported, and that 75% believe there are better ways than college to get a good education.
Enter trades programs and apprenticeships.
Build Your Future, an outreach program under the umbrella of the National Center for Construction Education and Research (NCCER), is appealing to Gen Z’s financial instinct by telling young people about earn-while-you-learn job training and paths to career success — even business ownership — that don’t require a four-year degree.
‘How can I do that myself?’
Rob Kirk, BYF program manager and a former educator, told Construction Dive that Gen Zers “know how to do their research.” He encourages them to look up the demand for career tracks that require four-year degrees compared with demand for skilled tradesmen in their areas, such as through BYF’s interactive map of craft labor demand by state and track. For pragmatic Gen Zers, construction begins to look like the common-sense option, Kirk said.
This is one reason why “the pendulum is swinging back” toward interest in career and tech education (CTE), according to BYF director Jennifer Wilkerson. The middle school and high school students she works with “want to know how it works, what makes it happen and how can I do that myself,” she told Construction Dive.
And school administrators — helped by President Donald Trump’s reauthorization of CTE funding in the Carl D. Perkins Career and Technical Education Act of 2006 — are increasingly able to create programs that will both allow these hands-on experiences and provide students exposure to careers in construction, Wilkerson said.
BYF steps in to support these educators while developing interactive materials that allow students to independently explore careers in construction. The organization’s most popular initiative is its construction craft “trading cards,” which aren’t too different from baseball or even Pokemon cards, in theory, Wilkerson said.
Each card profiles a craft profession with a worker’s photo on the front, and details like the job description, average salary and required training on the back. Young people can flip through the cards, which are available both online and as hand-outs at career fairs and other events, to identify the roles that their interests are best matched to. For example, the electrician card reads: “If you’re into sound systems, robotics or tinkering with wires, you should think about a career as an electrician.”
Why Gen Z looks to experienced mentors
According to a study from research firm Barna Group, 66% of Gen Zers said they want to start a career before age 30 compared with 51% of millennials. In addition, six of the 10 top reasons that Gen Zers said they admire their role model pertain to career or financial success, the study found.
Young people who are exploring construction careers like to hear about the perks of the job and the options in front of them from experienced professionals, said Stephanie Davis, vice president and chief learning officer at the Greater Michigan Construction Academy (GMCA). For this reason, the Associated Builders and Contractors-affiliated program connects students with local contractors and mentors early on so they can understand what companies look for in an employee, what wages they can expect to earn and how they can grow in their career.
“That’s what they need to hear and it’s something that has really worked for them,” she told Construction Dive. “If you don’t share with them all of those possibilities, they’re really going to lose focus and might find it elsewhere.”
GMCA’s youngest enrollees, fresh out of high school, receive coaching during their first semester to choose a career track, hone their resume and practice for interviews. By the second semester, in some cases, they can be working with an ABC-member contractor that will pay for the remaining tuition and ideally keep the student on as an employee when they’re out the door.
The academy aims to help all of its students graduate debt-free. “We’re working with them daily to help them be successful right from the start,” Davis said.
Another way to satisfy Gen Z’s appetite for career success is to demonstrate how they can start out with tools and one day become construction business owners. “We’re trying to teach them that they can sign the front of the checks” if they start out with the right education and hands-on skills, Davis said. The entrepreneurial interest is there, according to research firm Universum, which surveyed 50,000 Gen Zers across 46 countries, finding that 55% are interested in starting their own company.
“We’re trying to teach them that they can sign the front of the checks ... all they need is that education and that hands-on skill to be able to own their own company.”
Vice president and chief learning officer, GMCA
The industry is largely made up of small companies — more than 60% of construction workers in 2016 worked for companies with less than 50 employees, according to the Bureau of Labor Statistics. But students can ride this path to the top of larger companies, as well. For example, at Sundt Construction, which is among the top 100 contractors in the U.S., 40% of management started out with tools in hand, Wilkerson said.
Getting Gen Z in the door, ready to innovate
Members of Gen Z are the true "digital natives." As they’ve grown older, things like smartphones, tablets, social media and even virtual reality (for gaming and other uses) have been the norm. They’re thoroughly comfortable with technology, and if they’ve learned anything from their resourceful Gen X parents, could come up with new ways to use tech to solve common problems faced by the industry.
Some Gen Zers are taking time to teach themselves tools and systems specific to construction, and they’ll be seeking employers who are both using this tech and exploring further ways to innovate with it, said Stacy Scopano, vice president of innovation at Skanska USA, at a conference last fall.
A Gen Z high schooler “can just download a free [CAD] kit, 3D-print it and expect the world to operate differently,” he said. “And we’ve got to fund it.”
But even if the funding is there, companies may have to tweak their marketing to get Gen Z in the door. More than other generations, this group pays close attention to the ways businesses present themselves online and on social media.
“Generation Z seems to really care about engaging with brands that have values that align with their own,” Kyle Andrew, chief marketing brand of American Eagle Outfitters, a retailer that has seen profits rise with Gen Z interest, told Fast Company. “You can’t just make stuff: You have to stand for something.”
Companies that post on their websites and to social media about their philanthropic involvement and commitment to their employees, for example, could do well to draw young people’s attention, according to Brad Benhart, associate professor of practice at Purdue Polytechnic Institute.
“Young people are looking at that and they’re establishing an opinion of the culture of that company just from their social media presence, where older generations would establish their opinion of the culture of a construction company by going into the front door,” Benhart, who works closely with construction management students, told Construction Dive.
“I think that’s something that our industry is going to have to embrace … what kind of message are you sending out to young people?"
Historically, the construction industry has been one of the slowest to adopt new technology, lagging only behind agriculture in digitalization. But that’s changing as software entrepreneurs turn their attention to the needs of the deskless workforce.
The ubiquity of mobile devices, cheap and powerful cloud computing, 5G, and the Internet of Things (IoT) are all making it possible to put robust technology into the hands of deskless staff, including construction workers. The venture capital industry has taken notice—funding for construction technology has seen a steady uptick since 2013.
CFOs should partner with their IT teams to modernize their back-office systems, and prepare to handle a flood of data from the field as paper processes become digital. They should also figure out exactly what field data they want, what tools work best to get it, and how to integrate that data into their financial software. Deployed strategically, new tools can help construction finance teams resolve many challenges, including:
Business continuity planning
Family-owned businesses are common in the construction industry, and many thriving mid-market and even large companies are still majority-owned by founding families. Finance leaders need to create business continuity plans, whether that’s figuring out how to transfer company ownership to the next generation, establishing an ESOP (Employee Stock Option Plan), or selling or merging the company. There’s a lot of work involved in valuating the business, figuring out the best planning scenario, and helping negotiate relevant deals. Industry-specific ERPs (such as Viewpoint’s Vista) and cloud procurement platforms (such as Concur) can give finance professionals a better view into their numbers, help with planning scenarios, and standardize the purchasing process across acquired or merged companies. (Full disclosure: both companies are Nvoicepay partners).
Changing accounting standards
Revenue recognition is always top of mind in the industry. For the past several years, the Construction Financial Management Association (CFMA) has sought to ensure that the new Financial Accounting Standards Board (FASB) rules around revenue recognition are favorable—or at least not punitive—towards the construction industry. As these new rules are implemented, CFOs seek to refine their strategies for how to bill against contracts, and tie revenue to either a percentage of completion or work-in-progress schedules. Mobile technologies that expedite communication between the office and the field can also help speed the flow of information.
Construction carries more risk, especially out on the job site, than many other industries—and insurance costs are rising. Some companies are investigating captive insurance programs, in which multiple companies pool their assets and fund their own risk by placing money under management so they don’t have to pay such exorbitant premiums.
Insurance companies have responded with more flexible products to try to help companies control their costs. CFOs need to evaluate their options—and if they want to participate in a captive insurance program, every participant needs to undergo a thorough assessment of their financial stability.
While a modern ERP system can facilitate most of that process, the assessment would also look at safety and security practices. There’s a lot of technology that can help reduce jobsite risk. Drones can monitor job sites for safety and security. Sensor-equipped wearables can alert workers to smoke or toxic chemical exposure, and geo-fencing can provide alerts when they’re entering a hazard zone. Firms can also use autonomous equipment to do work in environments that are too hazardous for human workers.
In the office, payment automation software such as Nvoicepay can mitigate payment fraud as part of an overall risk-management program.
Attracting and retaining talent
Lots of companies face growth opportunities while lacking enough employees to do the work. With unemployment at new lows, it’s been difficult to hire and keep good employees.
CFOs are working with HR—and, occasionally, external strategists—to refine their hiring, retention, and benefit strategies. Mobile training technology can help onboard unskilled workers faster, allowing companies to draw from a larger talent pool. Virtual reality technologies also offer promise for quicker training.
Improving job-cost accounting
Tablets and handheld phones let field staff capture data and send it back to their offices electronically. GPS-enabled time cards can record employee work hours and location on a mobile phone. IoT devices can measure equipment run time.
Cash management strategies
Cash management is probably the biggest challenge at any construction company, and effective work-in-progress (WIP) schedule management is critical. Key to the challenge is coordinating between the subcontractor confirming that a job is complete, project managers verifying that completion, and the accounting department billing the owner and syncing everything with the WIP schedule. This is also an area where drones and mobile apps can increase the speed and accuracy of data delivery to finance.
Finance also needs visibility, flexibility, and precision control over making and timing payments. With cloud-based payment-automation software, a project manager sitting in a truck can review a payment file, prioritize subcontractor payment schedules, and approve payments immediately, without having to return to the office to sign a stack of checks and backup documentation. Subs get paid faster and the job keeps moving.
With all the new purpose-built technology coming down the pipe, we’ll finally start to see some real movement towards digitizing the construction industry. Finance teams should prepare by enabling themselves with modern cloud systems for accounting, spend management, and payments. They need to enable the field with tools that communicate data back to the office in near real-time. Most importantly, they need to work out how to coordinate it all towards productivity gains and growth, and join the ranks of data-driven CFOs who have done the same in other industries.
Jason Krankota is VP of Construction Sales, West Region at Nvoicepay. His expertise in construction business technology spans 20 years, with 10+ years focused on corporate payments, accounts payable, and expense management solutions.