Posted on Jan 30, 2008
John M Grau
Market share is eroding for union electrical contractors in one their main bastions—large cities. Contrary to common perception, one of the principle reasons for that erosion is not the cost of labor, but how the labor is managed.
That’s the conclusion found in a new ELECTRI International study titled “We Built This City.” Researcher Perry Daneshgari reported on his work at the Foundation task force meeting last week in Phoenix.
The Foundation’s annual January Task Force Meeting is one of my favorite meetings. I was there along with NECA members, chapter staff executives, and other Foundation supporters. Long ago, we realized that academics and electrical contractors communicate differently. So the purpose is to bring Foundation researchers together with industry participants for a reality check of sorts - - having electrical contractors guide the research projects and ensure that they are on-point and relevant.
If we don’t want good research to sit on a contractor’s shelf, we need to make certain that the academics focus on practical, applicable results, not on the spinning of theoretical concepts. Thus, task forces are created to bring the theoretical and the practical together in a useful format. At last week’s meeting, task forces were formed for projects, including “Local Apprenticeship Best Practices,” “Recruiting and Retaining the Supervisory Workforce,” “The Role of Electrical Contractors on LEED Projects,” and “Implementing Lessons Learned from the Florida Initiative.”
“We Built This City” is a completed project rather than one just starting, and it generated lots of in-the- halls and after hours discussions among attendees. In support of his main contention, Daneshgari reports that non-union contractors view themselves as a business, while a majority of union contractors view themselves as an extension of their field operations. Union contractors believe that it is the labor in the field that makes them money. Non-union contractors know that money is made by effectively managing labor. Union contractors believe that labor is the highest risk and uncertainty of the job. Non-union contractors consider management of labor to be the highest risk.
While operational differences between union and non-union shop contractors were the main highlight of his report, Daneshgari noted additional reasons for the erosion of market share in major urban areas.
The continuing shift from an industrial market to commercial and residential markets is one. Portability restrictions and limitations on crew ratios were another. He also noted that the local leadership of the NECA chapter manager and the IBEW Business Manager, and the relationship between the two, has a major impact on market share—something I pointed out in a previous post.
As you can see, there were lots of provocative thinking and discussions going on at the Foundation task force meeting. Understanding the problem is a critical first step in implementing solutions. The work of ELECTRI International continues to be a valuable resource in that regard.
I’d be interested to hear what you think of Dr. Daneshgari’s conclusions. Use the “Send Feedback” link below to send me your thoughts.