For Generation Z, the value of a construction career is a no-brainer

Posted on January 29, 2019 by Jorie Helms

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.”

Stephanie Davis

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?"

Author 

-Kathleen Brown

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How new technology can help construction finance professionals

Posted on January 14, 2019 by Jorie Helms

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.  

Risk management

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.

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Millennial women outpacing their male counterparts in home sales

Posted on January 11, 2019 by Jorie Helms

The housing market is projected to heat up in 2019, and new data from Realtor.com indicates this push will predominantly be driven by Millennial women.

According to the company’s latest study, 50% of the top 20, and seven of the top 10, fastest growing buyer first names belong to Millennial women.

“Although older Baby Boomer and Silent Generation women are leading the charge, the increase in deeds with female names is particularly visible when comparing genders within the Millennial generation,” Realtor.com writes.

The report states that when looking solely at names with a peak birth year between 1981 and 1997, Millennial female names outpace their male counterparts in home sales by 1.5%.

"First names associated with women -- especially Millennial women -- saw a significantly faster level of home sales growth in 2018, giving us a sneak peek of homeownership trends in 2019," Realtor.com Director of Economics Research Javier Vivas said.

Interestingly, Realtor.com’s data also points to another trend – a rise in Hispanic homeownership.

According to the company’s data, home sales associated with traditionally Hispanic names and partially Hispanic names increased by 4.1% and 3.7%, respectively, year-over-year.

That’s a significant increase, considering non-Hispanic names remained virtually stagnant at a rate of 0.1% from the previous year.

"Hispanics and Millennials names overall also saw a surge in home purchases last year,” Vivas said. “If these buyers can continue to break through the affordability barrier, they are likely to make up a larger share of owners than ever before and dominate the market for years to come."

NOTE: Realtor.com’s report analyzed residential non-corporate transactions, ranging from January through September 2018. Notably, the company compared name demographic data from the Social Security Administration and deed record buyer information to gauge young buyer influence in the housing market.

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Message from Randy Noel

Posted on January 4, 2019 by Jorie Helms

NAHB Chairman Randy Noel recently shared the following message with members:

As we say goodbye to 2018, let's celebrate NAHB's many achievements in the past year. We can't list them all, but these are some of the most important.
ChartHBA and member efforts to grow NAHB paid off with the addition of 2,000 new members nationwide, the best net improvement in more than a decade. What a great achievement! Thanks to all for the hard work and good will.
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Home Builders Recognized for Lobbying Clout

Posted on December 14, 2018 by Jorie Helms

“The select few on the list have demonstrated their ability to wield influence and deliver results on Capitol Hill and in the administration on behalf of clients and groups seeking a voice in Washington,” The Hill said in a Dec. 13 story citing the top lobbyists of 2018.

The prominent Capitol Hill publication listed NAHB CEO Jerry Howard among this elite group of Washington power players.

Although The Hill highlighted one person from each organization it listed, Howard was quick to point out that his inclusion represents the good work of all involved in the federation.

“While I am flattered to receive this recognition, the fact that NAHB is recognized as one of the most powerful trade groups is a testament to the shared efforts of our members; the NAHB staff, most notably Chief Lobbyist Jim Tobin and his government affairs team; EOs; councils and all those who work on behalf of the association to keep housing at the forefront of the national agenda,” Howard said.

NAHB’s government affairs staff works closely with Capitol Hill staffers to set up meetings between NAHB member volunteers, including the Senior Officers, and their elected representatives in Congress. They also help facilitate thousands of visits to congressional offices to advance NAHB’s position on key legislation.

NAHB leverages the association’s power to shine a light on key issues, get pro-housing bills introduced and passed, challenge regulations that do more harm than good, and level the playing field against powerful interests that could put struggling builders, remodelers and their suppliers out of business.

The most recent example of NAHB’s clout occurred earlier this week when Howard, along with a select few members of Congress, was invited to give remarks at EPA headquarters regarding the new waters of the U.S. proposal announced by Acting EPA Administrator Andrew Wheeler.

“By fighting every day for the housing industry on major issues that affect our members’ bottom line, NAHB is working tirelessly to create a better business environment for all those involved in the residential construction industry,” Howard said.

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Cracking the Medicare Code

Posted on December 12, 2018 by Jorie Helms

What You Need to Know Before Signing Up for Medical Coverage

A Publication of Trust Company of Oklahoma

Buckle up! Turning 65 means signing up for Medicare. You are not alone: over 10 thousand Baby Boomers turn 65 each day for the next 20 years, with almost 50 million Americans currently covered by Medicare, according to the Social Security Administration. Even though Medicare touches so many citizens, most are confused about the enrollment process due to a shortage of clear information about this program. As a result, many don’t have the knowledge they need to enroll without incurring penalties or to prepare for the costs Medicare does not cover. To learn more about the ins and outs of Medicare, begin with the road map below.

Read more here! Cracking the Medicare Code

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