The house, the cabin, the cars and the company. Dean Lundstrom lost it all when he declared bankruptcy in 2010. Twenty-six employees were out of work. His company had been awarded American Recovery and Reinvestment Act projects. At a point, though, Lundstrom says he knew it was too late to save his business. However, knowing what was on the horizon, he sold his only remaining contract — one with the City of Phoenix — to his last-standing employee, Henry Burruel.
In the meantime, Lundstrom focused on returning to the industry. With his newly restarted company, Commercial Comm & Electric, he was determined to make some changes. Then, he discovered the Arizona Builders Alliance.
In 2013, he became an ABA member. Two technicians who were joining his company, though, said they wouldn’t work for him unless they could be involved in ABA’s apprenticeship program. The apprenticeship program offers craft training in specialities, like electrical engineering and heavy machinery operation. The electrical and heavy machinery operation teaching facilities are located, respectively, at Gateway Community College and Central Arizona College. Enrollment in the four-year programs lead to the equivalent of journeymen certification, which can lead to an annual starting salary of $43,500, according to the ABA.
“It was eye-opening,” says Lundstrom, who had previously hired electricians regardless of certifications. The next year, he had two more technicians join the program and has another one starting in fall.
“I’ve seen a change,” he says. “My older guys who went through the class, they will challenge inspectors on codes because all during the class, they’re brought up on codes…(The program brings) a confidence in their ability.”
Lundstrom says he has personally enrolled in ABA’s leadership programs and is happy to report his company now has six employees.
“The construction industry, in terms of job numbers, is in a recession,” says Mark Minter, executive director of ABA. “We’re about half the number of jobs we had at the peak. They go up a few thousand one month and down another.”
This is the typical call to action by construction companies in Arizona that are looking for craftsmen.
Arizona was one of the worst states for construction growth last year, according to a report by The Associated General Contractors of America. ASU professor and economist Lee McPheters has reported that construction jobs are one of three major factors holding back the Arizona economy. The industry is down by about 100,000 jobs, he reported last December.
“More people are leaving the industry than coming into it,” says Sundt’s Director of Craft Development, Ken McKenzie. “The next three to five years, we could be 100,000 to 200,000 people short in this part of the country. You can’t do that without craft people.”
That’s why Sundt Construction invests about $10,000 a year to train employees who have worked for more than six months and pays for their wages, transportation and housing for four years.
In June, Sundt will open its first monthly classes at a warehouse the company bought to host pipe-fitting, welding and structural steel courses.
The workforce is at a further disadvantage, says Wilson Electric President Wes McClure, when the Baby Boomers retire, leaving a talent shortage in the wake. That’s why his company attempts to enter about 50 employees in the ABA-AGC Education Fund Apprenticeship Program every year, even if only 15 to 20 of them make it through all four years of the program.
By the time a student graduates from an apprenticeship program, they are qualified to work at a journeyman-level. McKenzie estimated that close to 70 percent of ABA apprentices at Sundt have become supervisors, noting a carpenter who is now a senior vice president.
“It’s important to have trained individuals and new blood coming to our company,” says McClure, who started his own career as a laborer and worked his way to president. “It’s been increasingly harder with the lack of construction over the last five or six years and the wages and things that are a barrier to construction. You’re working in heat, but it’s a good trade to go into with a lot of upside if you’re ambitious.”
Like many companies that participate in ABA’s apprenticeship program, Wilson Electric pays for its employees’ education regardless of where the student chooses to work afterwards. The company, McClure says, has an annual training budget of $1M.
“People in construction are gamblers,” he says, adding, “when it comes to the available work and being able to perform it.”
One other company that has been on board with ABA’s apprenticeship program is D.P. Electric.
“The apprenticeship program has impacted the quality of our workforce for the better,” says D.P. Electric President Dan Puente, whose company can have between five and 35 people in the program at a given time. “Trained electricians bring quality and confidence to the job site – they aren’t hesitant during the installation process and there is no re-work as the quality meets D.P. Electric’s standard. It is very noticeable who has been through the program and has not. We encourage all our employees to go through the program.”
Brett Bieberdorf, co-owner of Rural Electric, says that before he and his sister bought the company from their parents in 2007, the company hired “off the street.” Since Arizona is a state that doesn’t certify electricians, Bieberdorf says it’s difficult to ensure quality. However, the apprenticeship program has helped him bring quality in-house. In 2006, Rural Electric had just over 90 employees, three of whom held a Journeyman certification. Nearly a decade later, the company dropped to 80 employees — with 20 Journeymen.
The composition of the workforce is changing from more laborers to electrical tradespeople, says Bieberdorf.
“I don’t think kids realize being an electrician is just the beginning,” says Bieberdorf. “You want there to be incentive. Entry level shouldn’t be a living wage.”
Journeymen can make between $20 and $25 an hour, says Mark Minter. Every six months and 1,000 hours of work can lead to a raise, he says.
“Over the years and going forward, employees are going to be choosy,” says Bieberdorf. “If employees feel they can get a better package, they will. Our pushing the apprenticeship program has helped us retain employees. If they see you’re willing to commit for four years, that creates loyalty.”
Lundstrom sees that, too, adding that his single former employee, Burruel, who has since built his own small company of workers, will soon combine their two six-person companies into one. Despite the positive changes Lundstrom has seen in his workplace due to education, he won’t make it mandatory for employees.
“I don’t have a lot of benefits, but paying for my employees’ apprenticeship education fees is one I can offer at this point,” he says.