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NRCA Director John Gooding's testimony to the House Small Business Committee, February 2000

On Feb. 9, John S. Gooding, chairman and chief executive officer of Gooding, Simpson and Mackes Inc., Ephrata, Pa., testified before the U.S. House of Representatives' Small Business Committee about the Skilled Workforce Enhancement Act (HR 1824). Following are his comments:

Introduction

Chairman Talent and members of the Committee, my name is John Gooding and I am chairman and chief executive officer of Gooding, Simpson and Mackes, Inc. I have two commercial/industrial roofing companies, one in Ephrata, Pa., with 90 employees and one in Newark, Del., with 35. I also am a board member of the National Roofing Contractors Association (NRCA) and this year's chairman of the National Roofing Foundation's (NRF) Roofing Industry Alliance for Progress (the Alliance), an industry-wide partnership established to analyze, select, recommend and provide insight for projects addressing critical industry issues, including the shortage of skilled workers in the roofing industry.

NRCA is an association of roofing, roof deck and waterproofing contractors. One of the oldest construction trade associations, we are celebrating our 114th year, having been founded in 1886. NRCA has more than 4,600 members representing all 50 states and 51 countries. Our U.S. contractor members represent approximately 65 percent of all roofing installers in the United States. More than 90 percent of roofing contracting firms are considered small businesses; many are family-run operations where family members work side-by-side to make their companies successful. NRCA contractors are privately held companies and the average member employs 35 people during peak season with sales of just more than $3 million per year.

We thank the Committee for holding this hearing to open a dialogue on the shortage of skilled workers in our industry and the many other skilled service trades. The Director of the Department of Labor's Bureau of Apprenticeship Training, Anthony Swoope, recently said that more than 240,000 skilled workers are needed in the building and allied trades. For the roofing industry alone, the Bureau of Labor Statistics (BLS) projects 29,000 average annual job openings that could result in a 50,000-worker shortfall over the next 10 years.

Skilled Workforce Enhancement Act

I commend you in particular, Mr. Chairman, for introducing the Skilled Workforce Enhancement Act (SWEA). SWEA recognizes and addresses a growing crisis in the roofing industry. Specifically, small businesses—like roofing contractors—must spend larger amounts of money to find pools of workers and recruit them and then pay additional costs associated with entry-level worker training. This has become so difficult that contractors at times must turn down work for lack of trained employees.

SWEA will help small employers take on the daunting challenge of training and retaining skilled workers by defraying the high costs involved through a tax credit. NRCA supports SWEA with one small adjustment; the bill says an employer must implement classroom and on-the-job (OTJ) training for a total of 2,000 hours a year (for a 2- to 4-year period). In the roofing industry, due to weather conditions, a full-time employee probably would not make it to the 2,000-hour mark. NRCA would like to see the bill changed to "a minimum of 1,500 hours" which would be more reasonable for our industry.

NRCA represents about 20 percent union shops and 80 percent open shops. Although the unions have strong training programs in some markets, 80 percent of our members do not have access to these programs. As such, the training is left to the individual roofing contractor—a small business that SWEA would cover. We are aware that some associations representing strictly union employers are concerned that multiemployer training facilities would be excluded from using the credit under SWEA. Our understanding is that SWEA would extend coverage to any employer paying for training, including those who choose to train through multiemployer facilities.

Some union employer groups also have recommended that SWEA specify that only the Bureau of Apprenticeship Training (BAT) be capable of certifying training programs. NRCA has no problem if an employer wants to have its program BAT certified, but we do not think it is wise to have only one "gatekeeper" for recognizing legitimate training programs that would qualify for SWEA's tax credit. National industry associations, such as NRCA, are perfectly capable of establishing curricula that would more than satisfy their members training needs without a mandate for BAT certification.

NRCA and NRF Alliance for Progress Initiatives

NRCA's primary mission is to represent and serve the interests of professional roofing contractors, as well as promote professionalism in the roofing industry. Professional roofing contractors strive to meet the highest standards—both professional standards and government regulations—for installing high-quality roof systems and using equipment and practices that protect workers, building occupants and the public from significant hazards.

NRCA's members have been enjoying the country's strong economy with two record-setting years in a row in the residential market and the third strongest in NRCA's history projected for 2000. In addition, the commercial roofing market has been growing at a record pace for the past three years. This has exacerbated the severe shortage of skilled workers and our members cannot find the qualified help they need to fill the positions they have. In a recent survey of NRCA members conducted by the association's Washington, D.C., office, 31 percent said they could use between one to five new employees, 34 percent need six to 10 employees, 10 percent could hire between 11 to 20 employees, and 7 percent could use more than 20 new employees. Eighteen percent gave no answer or do not need new employees currently.

In response to the shortage of labor, NRCA and the Alliance have been pursuing numerous initiatives to help our members find, recruit, and train skilled roofing workers. We are developing a 31-module training program that addresses low- and steep-slope roof systems, specialized applications, safety and equipment. These portable modules are available for $150 each, and $5 per workbook. Ten of the modules currently are available, or will be very shortly. They are: Overview of Low-Slope Roofing; Introduction to Safety; Administrator and Trainer's Program; Roof Calculations and Measurements; Job Set Up and Tear Off; Overview of Steep-Slope Roofing; Introduction to Built-up Roof Systems; Application of the Hot Built-up Roof System—Felts and Surfacings; Application of the Hot Built-up Roof System—Flashings; and Roof Insulations—Flat, Tapered and Crickets. NRCA and the Alliance have each funded the development of these modules to the tune of $750,000!

NRF, other contractor associations and the academic world have formed the Specialty Construction Institute. This consortium is developing a specialty construction curriculum to be offered by various leading academic institutions. These include: Georgia Tech, Penn State, the University of California at Berkeley, University of Kansas, University of Washington and Virginia Tech. The academic partners, with strong industry participation, will develop the curriculum. Each partner institution will develop one new course in a distance-deliverable format as part of an integrated curriculum to be shared among all partners. The result will be a six-course concentration in specialty construction delivered at all six institutions.

NRCA also offers its members the service of listing job openings on its 1-888-ROOF-321 hot line. A caller will be sent an information package about the roofing industry and a state-specific list of job openings. Radio spots entitled "Career Opportunities in the Roofing Industry" are also airing in 46 states with an audience of more than 7 million listeners.

This past fall, through the Alliance for Progress, NRCA began a pre-apprenticeship program aimed to help first-generation Hispanics in McAllen, Texas. We had 13 individuals complete the training in September 1999. However, attempts to enroll a second class failed because of red tape with the participating schools and local governments and a lack of willingness on the part of workers to relocate to a part of the country that needed them. Nonetheless, this program did yield a positive result—the development of a preliminary, portable training curriculum for entry-level workers. With a little more refinement, the curriculum ultimately will be made available to NRCA members desiring to offer worker-training programs.

NRCA also is in the preliminary stages of negotiating a partnership with Goodwill Industries and working with the juvenile justice system in Broward County, Fla., to find and train workers. Also, NRCA is starting a pilot program with Job Corps in Glenmont, N.Y., that if successful—and we expect it to be—may lead to a roofing partnership program with Job Corps nationally.

NRCA currently is moving forward with plans for a new headquarters building in the Chicago area. We intend to build a permanent training facility that can be used by the entire industry to meet our educational needs and help mitigate costs. Recent surveys by NRCA, BLS and Engineering News Record indicate that it costs between $25,000 and $50,000 to train one employee per year, including salary.

Gooding, Simpson and Mackes' Experience and Initiatives

For more than 50 years, Gooding, Simpson and Mackes Inc. has struggled with trying to recruit, train and retain good employees. In our Pennsylvania location, we have been involved with the ABC (Associated Builders & Contractors) Apprenticeship Program for sheet-metal workers off-and-on for the past 30 years. This program involves four years of OTJ training and in-house training six hours per week throughout the normal school year (September through May). After a four-year program, these individuals will receive journeyman wages and the opportunity of advancement to job foreman. This program is dependent on other contractors recruiting students interested in learning to become sheet-metal journeymen and willing to give up two evenings a week (without pay) through the school year. In the past we have been unable to depend on interested employees, availability of qualified instructors, classrooms and enough students from other companies to justify the costs for instructors and classrooms. SWEA might give us the financial freedom to pay students a small stipend for taking night school classes thus recruiting more workers.

Two years ago, our company started a two-year roofing apprenticeship program supplying both our facility and an instructor for our local ABC chapter. Our instructor used both the ABC Apprenticeship Training Program and NRCA's training modules to provide a good classroom experience. Besides the actual classroom training, our employees are working approximately 2,000 hours on job sites, as well as attending monthly safety training and a special program put on by our insurance carrier (PMA) and our trainers during inclement weather.

Our Pennsylvania company has spent over $100,000 on a large training room that can hold 100 employees. We now are looking into building another facility that would allow us to work with hot asphalt and other roofing products in a well-ventilated facility for hands-on training in a classroom environment.

Two years ago, I approached the New Castle County Delaware Vocational Technical Schools and asked if they would consider establishing a training program for roof mechanics if I could provide employment opportunities through the state with our company in Delaware and other commercial and residential roofing contractors. They agreed to this proposition and sent their instructor to an NRCA training program. I then employed him during the summer to give him a better understanding of what to expect of his students and a better understanding of tools, equipment and products. Our Delaware company purchased and will continue to buy all the training modules produced by NRCA, and I personally plan to monitor the program as it unfolds.

The Delaware Vocational Technical School system is better adapted for OTJ training during the school year because their students work in sequences of two weeks in the classroom and two weeks on the job. This allows the employer to fill a job opening by rotating two students every two weeks. This also gives the students the opportunity to maintain a good part-time job and hopefully start to learn a trade prior to graduation from high school.

My long-term goal would be to hire students from the vo-tech schools and also continue their training, as well as educating unskilled employees by using the vo-tech night classes and/or in-house training.

The tax credit for training costs under SWEA would allow me to buy a van and go into the cities and hire people who don't have other transportation to get out of the city to our job sites and business locations. We would be able to go into the cities of Wilmington, Del., and Lancaster, Pa., to recruit employees, providing good jobs with excellent wages and benefits. Although our companies are in the service industry, we provide our employees with life insurance, paid vacations, a pension plan, 401(k), and health, dental and vision care. Our employees typically work 45 hours a week throughout the year except on days with high wind, rain or snow. Our average employee works 2,000 hours a year, but other companies in our industry may work 1,200 to 1,500 hours per year depending on their geographic location.

We purchased land and built our facility in Newark, Del., in 1989. We anticipated having 100 employees on the payroll within 10 years and today, 11 years later, our workforce is only at 35. Something has to be done to encourage people to come into our trade. I feel that the SWEA would encourage more employers to hire and train their own employees instead of continuing to complain and not achieve the results they want.

Conclusion

All these initiatives by NRCA, the Alliance and my companies are aimed at recruiting, training and retaining qualified workers for the roofing industry. Mr. Chairman, your bill, SWEA, is one more step in helping small roofing contractors attract the labor they need by giving them an incentive to train their employees in a formal program. NRCA urges every member of the Small Business Committee who is not already on SWEA to cosponsor the legislation.


Pursuant to the terms of rule XI, clause 2(g)(4), of the Rules of the U.S. House of Representatives, NRCA has received the following federal grant, contract, or subcontract in the current and preceding two fiscal years: International Trade Administration (U.S. Department of Commerce) Award Number 4036-97-8A95, Special American Business Internship Training Program, Amount—$29,500.





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