Apprenticeships expand, struggle to make up years of dried-up pipeline

SAN JOSE — As training centers respond to a growing demand for skilled workers with more and larger classes, enrollment has not been able to make up for the talent gap created by the 2008 economic recession. At the Loyd E. Williams Pipe Trades Training Center, more than 500 apprentices train every week to become plumbers, steamfitters and refrigeration technicians — the most in 15 years.

On a recent Thursday afternoon, about a dozen students at the Loyd E. Williams Pipe Trades Training Center gathered around their instructor as he lit a torch against two scraps of metal. They watched as the metal softened beneath the heat, turning two pipes into one. Minutes later, the students, most of them in their late twenties and thirties, returned to their stations to master this alchemy that they would perform many times over as professional steamfitters.

More than 500 apprentices training to become plumbers, steamfitters and refrigeration technicians come through the center every week, the most in 15 years. And the center hired about a dozen new instructors this year to keep pace.

“We are definitely in a boom,” said Brian Murphy, the training coordinator at the center.

As training centers respond to a growing demand for skilled workers with more and larger classes, enrollment has not been able to make up for the talent gap created by the 2008 economic recession.

At the peak of the recession, training centers across Santa Clara County reduced apprenticeship enrollment if they did not stop accepting new students entirely. Contractors didn’t feel the impacts of devastated enrollment at training centers until the economy started to return to normal. At that point, the most sought-after workers — apprenticeship graduates, also called journeymen — were hard to find.

Unable to find work during the recession, many apprenticeship graduates left the industry and never returned. At the same time, veteran workers continued to retire, shrinking an already-strapped workforce.

Contractors will hire apprentices to assist more veteran tradespeople. Apprentices, who are still developing their skills, are more like investments who will yield returns when they complete their apprenticeship in two to five years, depending on the specialty.

“[Contractors] might get bodies, but to get the skills they need is increasingly difficult,” said Peter Philips, a labor economist at the University of Utah who studies the construction industry, about the current boom.

According to Philips’ research, it wasn’t until 2014 that employment started to return to pre-recession levels. But diminished enrollment in training centers from 2008 to 2014 meant that the industry lost out on thousands of skilled workers.

When the recession hit, the Loyd E. Williams Pipe Trades Training Center saw demand for its graduates plummet nearly overnight. As a result, the center went from accepting an average of 100 new apprentices per year to accepting 18. The next year, they took no one.

Similarly, the Northern California Laborers’ Training Center for cement masonry, small machine operations and other assistive work on a construction site, went from accepting 100 apprentices before the crash to accepting 15 in 2008.

Both training centers have since recovered. This year, the Loyd E. Williams Pipe Trades Training Center touts 500 apprentices. The Northern California Laborers’ Training Center hit record-high enrollment this year with 2,000 new apprentices.

Contractors now report months-long delays on projects and having to turn down more projects than they would like. As a result, they are raising prices for their services.

Richard Haro, who runs a family business building duplexes, observed that among residential contractors a lot of projects are shifting from construction of new homes to remodels, which require less time and resources.

“It’s as busy as ever. We are looking at a new job everyday. I don’t sign… them all,” said Haro.

There’s only so much training centers can do to make up for the loss. Training centers are careful not to admit too many apprentices, always bracing themselves for another economic downturn.

Jared Gamble, committee secretary of the Santa Clara County Electrical Joint Apprenticeship and Training Committee, which trains electricians, is part of a group that closely monitors fluctuations in demand. The group meets every month to adjust their projections for employment as far as two years into the future.

“It comes down to need and whether we can sustain work,” said Gamble.

To decide how many apprentices to train, Philips said that training centers neither use the demand during a boom nor the demand during a bust as the basis for their projections. Instead, they rely on an estimate that falls somewhere in the middle.

“What happens if you train people to the demand for skilled workers at the peak? If you did that, 90 percent of the time, the people you train will be unemployed [in the next bust] and they’ll leave the industry,” said Philips.

The shortage has left contractors of all sizes scrambling.

Haro tries hard to keep the fourteen people working for him — especially now. Already other companies have tried poaching his workers.

“I have to put up a sign that says, ‘No visitors.’ It’s pretty cutthroat out there,” he said.

The large commercial general contractor, Vance Brown Inc., whose portfolio includes tech offices, parking garages and Stanford Stadium, has its own year-round staff of carpenters, foremen and laborers. During boom times, however, the company turns to other hiring sources.

At any one of the Vance Brown’s project sites, some of the workers are apprentices, but not many. Loren Brown, vice president of Vance Brown Inc., said that the company tries to strike an “appropriate ratio of journeymen and apprentices.”

Subcontractors supply the bulk of the company’s project workforce. If that isn’t enough, it will hire from outside the Bay Area or outside the state.

Both come with risks.

“We have to be careful not to select subcontractors that cannot staff our projects… for if they fail on a project, we fail also,” said Brown.

The last resort, hiring from outside the area, can never be a long-term solution. It is not only more expensive — companies have to pay head-hunter fees and travel expenses — but also does not add to a dependable local workforce.

“People who are hired from out of the area are not accustomed to the high cost of Bay Area housing or… may not have any social connections or family here so they are more apt to become dissatisfied and leave at some point,” said Brown.

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