A Compelling Case for Construction Craft Training: The Return on Investment Is Real
As a workforce development manager at the National Center for Construction Education and Research (NCCER), I am dedicated to advancing the construction industry through effective education and training programs. With nearly 50 years in the construction industry as a craft professional and workforce development professional, I am convinced that investment in formal construction training for our construction workforce will result in a significant return on that investment (ROI).
Understanding the size and scope of the ROI requires measurement, and while contractors typically keep records of the cost associated with training, most organizations don’t systematically measure the effectiveness of it. However, contractors do collect data indicators that have a direct correlation to the effectiveness and benefit of training. When these data indicators are tracked and compared, contractors can make determinations regarding the effectiveness and benefit of their training investments.
It’s important to note that construction craft training models and delivery methods occur in many variations, both formal and informal. As an example, much of the training occurring in the construction industry takes an informal, on-the-job (OJT) approach. A semi-skilled worker is paired with a skilled worker, and with informal guidance and experience, it is hoped that technical knowledge and skills are transferred over time. This is how I learned my trade many years ago, and while effective, it is not the most efficient in terms of time spent acquiring technical knowledge and skills, or assuring the right things are learned.
A more effective model utilizes a standardized curriculum developed with input from industry practitioners, incorporates instructional tools that meet the needs of various learning styles, utilizes written and hands-on assessments to verify learning occurred, and culminates in industry-recognized credentials that indicate mastery of craft. For the sake of this article, we are discussing the return on investment (ROI) when implementing a formal training methodology as described above that includes classroom training, either in-person or virtual, and structured OJT that is directly related to classroom training and includes mentoring and consistent performance feedback.
Key performance indicators (KPIs) considered include increased productivity, reduction of rework, employee retention, and improved safety performance. These KPIs are typically measured by contractors, the data is readily observable and easy to analyze. The ability of a contractor to improve these KPIs has a direct correlation to improved profitability and customer satisfaction.
Labor productivity rates are a measure of the number of craft hours used to complete a given quantity of work. Labor productivity rates are determined in advance to develop a project schedule which in turn drives the estimated labor cost. When labor productivity rates don’t meet the schedule demands, increased project costs occur. In some cases, contractual schedule completion dates are not met, and damages can be accrued that must be paid to the owner by the contractor.
Construction education and training programs are designed to equip individuals with the skills needed to excel in the field. Well-trained workers are more efficient and proficient in their tasks, leading to a notable increase in overall productivity. The investment in education pays off as workers contribute more effectively to project timelines, thereby meeting or exceeding project schedules.
Improved Quality and Reduction of Rework
One of the costliest negative aspects of construction projects is rework due to poor quality. Mistakes and errors can result in significant financial and schedule setbacks. Through comprehensive training programs, workers gain a deep understanding of construction principles, methodologies, and best practices, reducing the likelihood of errors. This reduction in rework not only saves money but also enhances project timelines and client satisfaction.
Increased Employee Retention
Recruiting and onboarding new employees is a necessary but costly exercise. Reducing the need to onboard new employees due to high employee turnover rates has a direct impact on project profitability. Investing in the education and skill development of construction professionals increases job satisfaction and fosters a sense of loyalty and commitment. Workers who see their employer’s dedication to their growth and development are more likely to stay with the company. Also, this increased retention is invaluable in an industry where experienced and skilled workers are in high demand. A stable, knowledgeable workforce contributes to the long-term success of construction companies.
Improved Safety Performance
Safety is paramount in the construction industry. Education and training programs prioritize safety practices, ensuring that workers are well-versed in industry regulations and the best safety protocols. The result is a safer work environment with fewer accidents and incidents. The ROI on improved safety performance extends beyond financial considerations, encompassing the well-being of workers and a positive reputation for the company.
The Construction Industry Institute (CII) in conjunction with the National Center for Construction Education and Research, and the Construction Users Roundtable conducted a research project to determine if robust construction training would indeed produce a return on the investment, and if so, to quantify that return. In 2007 CII published their findings in Research Report 231-11. What their research indicated was that the ROI was substantial and compelling; productivity increased by 11%, retention increased by 14%, recordable injuries decreased by 26%, and rework decreased by 23%. Based on this data it was estimated that every dollar invested in craft training produces up to a three-dollar return.
In essence, the return on investment in construction education and training is multifaceted. Beyond the initial cost, the benefits include increased productivity, improved quality resulting in a reduction in rework expenses, increased employee retention, and improved safety performance. NCCER’s commitment to providing industry-relevant, high-quality training contributes directly to these outcomes, positioning construction professionals for success in an ever-evolving industry.
As a workforce development professional, I constantly witness the transformative impact of education and training on individuals, contractors, and the construction industry. The dividends paid through increased productivity, reduced rework, employee loyalty, and enhanced safety underscore the critical role that robust construction craft training plays in shaping a skilled and sustainable construction workforce.
Learn more by downloading our white paper, “Future-Proofing the Construction Workforce: The Value of Training and Credentials.”