Stochastic Manpower Requirements Model:

Research Needed to Address Craft Labor Issues

Charles O. Skipper1, Stefanie Brandenburg2, and Lansford C. Bell3

1. Vice Chairman, Finance and Administration, Storm Eye Institute, Medical University
of South Carolina, Charleston, SC 29425 skippec@musc.edu

2. Visiting Professor, Department of Civil Engineering, Clemson University, Clemson,

SC 29634 sbrande@clemson.edu

3. Professor, Department of Civil Engineering, Clemson University, Clemson, SC 29634

lance.bell@ces.clemson.edu

Abstract
The supply of adequately trained and led craft workers poses a serious challenge for the
expected growth of infrastructure projects and energy plant construction in the immediate
and more distant future. Research studies and publications over the past 25 years
consistently indicate that craft labor is the biggest expense on industrial construction
projects, including infrastructure and energy related construction projects. These same
studies have concluded that construction cost effectiveness depends on the proper supply
of well trained, motivated, and experienced people. Despite this fact, the construction
industry has focused scant attention to the issues involved in creating a high quality craft
labor force. With the expected funds coming from United States Government stimulus
packages to catch up on long neglected infrastructure projects, as well as the public-
private venture opportunities under way to build infrastructure and/or energy plants and
other sources for the nation’s continued growth and development, it is time to address the
craft labor challenge.

Research is needed that will offer a methodology or model for the identification of inputs
to the complex issue of craft labor needs, to create schedules to address these needs
through tools and techniques, and to produce the desired craft labor outputs. Inputs
would include areas such as manpower sources, training needs, recruitment strategies,
supply chain management, identification of technical skill requirements, leadership

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programs, and similar items. This data could be modeled into a stochastic craft labor
scheduling process that would utilize specific tools and techniques. The outputs from the
process would result in identification of the most cost effective manpower staffing plans,
the most cost effective combination of on-site or off-site fabrication programs, use of
recommended best practices, identification of the most effective technical training
programs, and proposals to produce training and development programs that generate
competent craft leadership personnel.

In order for the US Construction Industry to be up to the challenge of the coming wave of
infrastructure and energy plant construction projects, emphasis needs to be placed now on
the stochastic modeling of manpower requirements.

Keywords: Leadership, Construction, Crafts, Modeling

Overview
The period of 2008 to present has demonstrated how quickly long held convictions about
the construction industry and craft labor can change. In a very short time span, the
continuous talk of a shortage of craft labor has given way to widespread unemployment
in that sector. The election of President Obama and congressional passing of a stimulus
Bill that included $40 Billion for transportation infrastructure appears to have changed
the discussion, for now (Parsons 2009). The “shovel ready” projects are not moving as
quickly as promised, but clearly this spending will ultimately generate some jobs for
those involved in the construction industry. Although there is no clear consensus at this
time, there is also much talk about significant national investment in costly high speed
rail projects. President Obama has pledged $8 Billion in immediate spending, and an
additional $5 Billion spread over 5 years, starting in 2010 (Parsons 2009). The
expansions of postponed and overdue airport runway projects are also in the news.
Finally, on the energy front there is discussion about significant investment in green
energy, to include wind, solar, and hydroelectric. Many consider Nuclear power to be
green, since it emits no carbon dioxide and the volume of greenhouse gas emissions
prevented by current nuclear plants, as compared with that same amount of electricity

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being produced by fossil fueled plants, is equivalent to removing 96% of the passenger
cars from America’s highways (Flint 2008). Currently there are 32 nuclear plants that
have submitted applications for, or are pending submission of, construction and operating
licenses (COLs) in the United States (Jacoby 2009). Several US Senators have called for
the construction of 100 new nuclear plants by 2030 to significantly reduce carbon
emissions while producing enough electricity to keep up with America’s growing needs
(Burr 2009). One of the common requirements that these initiatives share is a need for
adequate numbers of trained, competent, and well led craft labor.

The construction industry’s skilled labor shortage has been well documented in the
literature and many attempts have been made to address the supply side of the problem
(Brandenburg 2004). In the 1980’s, the Construction Industry Cost Effectiveness Project
researched many of the issues facing the industry and identified under trained supervisors
and de-motivated workers as two of the major problems causing reduced productivity and
monetary losses (CICE 1983). Other studies to determine the root cause of the craft labor
shortage have found that changes in vocational education, technology, and a shift to open
shop contracting are just a few of the causes (Chini 1999, Maloney 1995).

Haphazard or independent attempts at addressing the shortage have included training

programs, incentives for workers, and the use of foreign or non-traditional workers. The
National Center for Construction Education and Research (NCCER) is one of the most
widely recognized providers of standardized construction training materials and resources
(Bennett 2003.) A two-tiered approach developed at the University of Texas at Austin is
a more comprehensive approach that focuses resources on the development of highly
skilled craft workers (Castañeda-Maza 2002) and highly trained front-line supervisors
(Brandenburg 2006).

A few short years ago there were numerous studies that explained the approaching
shortage of trained craft labor (CII 2003, Chini 1999, Coia 1997, Grogan 2000, Maloney
1995, Federle 1993). However, the short term outlook for craft labor availability has
become more positive for several reasons. First, many retirement eligible craft workers

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are delaying retirement due to the significant loss of value in their retirement savings as a
result of the drop in the stock market. Second, the severe drop in total construction
spending (May, 2009 was down 11.7 % from May, 2008) has resulted in a lesser need for
craft labor (Davis 2009). Despite these transient conditions, the long term trends for craft
labor are still negative (Fiori 2003, Brandenburg 2004). With the reduced need for craft
labor during the economic downturn, many workers will leave construction for other
industries - often permanently. Also, during slow times, fewer younger workers will
begin apprenticeship or community college programs that would train them to be skilled
craft workers. When the economy rebounds and the demand for construction craft labor
increases again, the craft labor pool will have contracted even more and the shortage of
skilled laborers will be even greater. Most Americans are confident that the economy
will rebound; if not immediately, in a few years (Karabell, 2009). When that happens we
will be faced with the same craft labor situation, or worse, that we had in 2008 – a
shortage of well trained, well led, and experienced craft labor.

The History of Craft Requirements Development

Traditionally craft labor issues have been approached from a local perspective. If there is
a need for skilled craft labor in a specific field - nuclear, automotive, aviation, etc. - then
local companies or communities band together to provide training programs. Training
programs may be offered at the employing organization while others may be offered at
local community colleges. Some craft labor is also able to transition from Military
service where they receive valuable training and experience. In those areas where union
labor is available, the unions provide their own programs. Overall the approach to
training has been somewhat minimalist, and certainly haphazard. Identification of craft
manpower numbers, skills, training needs, etc. (i.e. requirements development) has also
been approached as a local issue since for the most part craft labor does not easily
migrate. This has contributed to a less than comprehensive approach to creating a more
sophisticated approach to craft requirements development. This minimalist approach is
interesting in view of the fact that it is widely accepted that the two largest expenses on
infrastructure projects are materials and craft labor. These two expenses are inevitably

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linked, since poorly trained and poor performing crafts have a negative impact on the
efficiency with which materials are utilized.

A key issue is the actual effectiveness of craft labor on the job site, as determined by craft
leadership. Many studies over the past 25 years have repeatedly indicated that
construction cost effectiveness depends on the training, supervision, motivation,
commitment, and leadership of people on the job (Skipper 2008). Likewise it has been
reported that the best construction project managers are the best leaders and there are
specific causal influences that produce those leaders (Skipper 20061,2).

Regardless of the above points, these past efforts to call attention to or put research
emphasis toward craft labor issues have not resulted in widely accepted or well
established tools that can be used throughout the construction industry. The Construction
Industry Institute (CII) is one organization that has attempted to develop “best practices”
with regards to workforce management, but the information is proprietary and limited to
member companies. There is little information in the literature to suggest that there are
generally accepted practices in the construction industry with regards to workforce
development or management (Brandenburg 2004, Pappas 2003).

Current and Future Requirements

As briefly mentioned in the overview, it appears there will be a surge of significant
spending on infrastructure projects for at least the next several years. This spending will
generate employment of significant numbers of craft labor. In the nuclear industry there
are 32 nuclear plants pending construction and operating licenses (COLs). The nine year
construction and start up process will create an average of 1400 to 1800 construction
jobs, with permanent requirements of 400 to 700 people to keep the plant in operation
(NEI 2009). These workers cannot be hired “off-the-street”, as they require substantial
training/skills and must meet strict background requirements. In the green energy area,
$86 Billion of Federal funding is targeted for initiatives in solar and wind power (ENS
2009). It is estimated that this investment will generate between 500,000 to 1.7 million
“green energy” jobs with a large percentage of those as craft labor jobs (Buckwater-Poza

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2009). In the infrastructure area, President Obama has proposed in his latest budget the
creation of an infrastructure bank. That bank would start with $5 Billion in 2010, and
receive a total of $25.2 Billion by 2019 (Lambert 2009).

All of these initiatives may not come to fruition, at least not in the near term. The ability
of Congress to continue high levels of deficit spending may be curtailed. There may not
be adequate local and regional funding available to support many of the power or
transportation initiatives. Environmental issues and access rights may also limit the
ability to build high speed rail, or energy plants, or power transmission lines, at least in
the time frames being proposed. For example, fourteen conservation groups and a
Colorado county have sued the federal government over 6000 proposed miles of energy
transmission corridors that would develop electricity transmission and distribution
facilities on Federal public land in 11 western states (Straub 2009). These types of
conflicts between those concerned about the environment and those attempting to
upgrade power and infrastructure facilities are predictable and will result in litigation that
delay or even block intended construction projects. Nevertheless, the need for new
construction is genuine and the requirement for well-trained and well-led craft labor
appears to be on the increase.

The question at this point is how the increased demand for skilled craft labor will be met.
Will the focus continue to be short term and local only, or will a more substantial
approach be developed that incorporates all of the complex issues and challenges
associated with the construction industry in the US? This paper argues that the time is
now to conduct University level research and move craft labor planning and management
forward.

A Stochastic Modeling Path Forward

This paper proposes that research is needed that will offer a methodology or model that
can be used to assist with the many complex issues related to craft labor. This model is
in the preliminary stages of development and it is acknowledged that the model may not
be comprehensive. The objective of this paper to identify the need for University

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research into the topics related to construction craft labor and to offer a methodology to
address those issues. We propose that the craft labor research can be broken down into a
2-phased approach; Development of the Workforce Readiness Index (WRI) and the
Stochastic Labor Requirements Model.

The Workforce Readiness Index (WRI) is intended to represent the workforce

development strategies that have been considered and developed for a project, industry,
community, or region (Figure 1). It would be developed using a process similar to that of
the CII Project Definition Rating Index (PDRI) (CII 1999). The major components of the
WRI would be evaluated using a rating system to determine if all of the inputs for a well
trained, led and managed workforce have been identified. Each input would be given a
formal definition with subcategories as needed and users would “rate” the degree to
which the input had been formally identified, with a “1” representing complete
identification and documentation and “5” representing little or no identification. A series
of weights would be applied to each of the inputs or input categories and a score could be
generated suggesting the “readiness” of the project or region with regards to craft labor
issues. This index would then provide information for use in the development of the
Stochastic Labor Requirements Model for a project, region, or industry.

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 Skills of
Management Supervisor
Leadership Training
Training
Craft Labor
Leadership &
Labor
Projections
Skill Management
Level
Leadership
Technical Skills
Current Skills
Sources Training
Needs Training
Craft Labor
Availability
Craft
Training
Workforce
Incentives Readiness Index

Attraction Off-site
and Retention Prefab.
Reward Craft Labor
System Productivity
Image
Advertising
Wages Regulatory Equip./ Tool
Issues Requirements
Enterprise Supply
Amenities Environmental Chain
Factors Union/ Integration
non-union

Current
Local
Labor Pool
Unemployment

Figure 1: The Workforce Readiness Index

Some of the questions that must be identified and quantified for each of the components
include:
• Craft Labor Availability. What are the sources of skilled craft labor? Are the
available craft labor assets trained or untrained? What are the different skilled
crafts needed; by technical skill (welder, electrician, equipment operator) and by
numbers (craft hours per month of project)?

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• Craft Labor Leadership and Management. Are project managers and
superintendents trained in craft labor issues? Are craft team leaders trained to
lead and manage their personnel? Are programs in place to provide recurring
training in the use of automated planning tools, dispute resolution, and other
needed leadership skills? Are programs available to provide supervisor training
in quality control, quality assurance, supply chain management, and safety?
• Craft Labor Productivity. Are there strategies in place to determine the optimum
use of on-site or off-site construction and prefabrication? Is there an identified
approach to handle environmental and regulatory issues so they do not impede the
effectiveness of craft labor output? Have manpower levels been integrated with
supply chain management? Have equipment and tool requirements been
submitted to stochastic modeling to preclude labor ineffectiveness due to
shortages or breakdowns?
• Craft Training. Are training programs available in the local areas that meet the
requirements? Can new training programs be initiated or existing training
programs be revised? Is the training universal, or does it provide a certification
program? Is leadership or management skills training available?
• Enterprise Environmental Factors. What is the labor market in the local area;
skilled or unskilled, unionized or nonunionized, plentiful or limited? What
institutions exist in the area to provide needed training programs? What are the
prevailing standards for wages and benefits in the region?
• Craft Attraction and Retention. Are plans developed to recruit craft labor from
local high schools, community colleges, and related industries? Are programs in
place to advertise jobs to skilled workers in other geographic areas than are
employed in industries that are being downsized (textiles, automotive)? Are there
initiatives to reach out to military veterans who may have exact or related
technical skills and who are open to relocation? Are studies available that will
generate solid retention strategies for the best craft performers (pay, benefits,
child care, college loan forgiveness, retirement planning)? Is there a reward
system that encourages high levels of team performance?

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The Stochastic Labor Requirements model would involve a series of inputs such as those
in Figure 2 as well as others, including the WRI to generate a number of outputs creating
a comprehensive plan for the development of a well-trained, skilled, and well-led
construction workforce.

Life Cycle Labor

Workforce Requirements
Readiness Index

Labor Attraction and

REQUIREMENTS MODEL
Craft Leveling Retention Plan

STOCHASTIC LABOR
Strategies

Labor and Schedule

Organizational Integration Plan
Process Assets
INPUT OUTPUT
Labor Training and
Project Mgmt Productivity Plan
Methodology

CII Best Practices

Implementation Plan
Expert Judgment

Environmental,
Regulatory, and
Project Management Political Impact Plan
Information Systems

Figure 2: Stochastic Labor Requirements Model

The inputs of the model would include the WRI as well as the following:
• Craft Leveling Strategies. Systems should be developed to level craft manpower
requirements over the life of the project with the critical path of the construction
schedule to minimize inefficiencies Craft manpower requirements are leveled
with craft equipment and support requirements.
• Organizational Process Assets. Organizations/industries/regions have a well-
established and successful human resources plan for craft labor. Collective
bargaining agreements are in force. Lessons Learned reports from previous

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 related construction projects are utilized and distributed. Templates and
checklists are available that indicate craft productivity results and expectations.
• Project Management Methodology. A well developed company (or industry or
regional) plan provides guidelines as to how projects are managed and craft labor
is supervised. The plan also includes provisions for continuous improvement of
craft labor effectiveness.
• Expert Judgment. There are identified and experienced personnel who can
participate in craft labor planning issues. These experts should represent all levels
of the organization as well as all the specialties of craft labor that will be
employed on the project.
• Project Management Information Systems. The software programs available for
the analysis of data should be up to date and should include training for all users
of the software. Craft labor and supervisors should have some use of portable
information systems as well as automated inventory reporting systems.

The Model itself could be developed as a unique new product. It could also be adapted
from another application. For example, the Center for Naval Analysis (CNA) has
examined a complexity based model known as Agent Based Models (ABMs). The
strength of ABMs is in its ability to simulate real interactions between individuals and
groups, while allowing for a wide variety of feedback (Burke, 2003). If ABMs offer a
solid approach for the complexities of modeling manpower requirements for the US
Navy, then it can be envisioned that a model can be found that will provide some rigor to
the challenge of modeling construction craft manpower requirements.

The Stochastic Labor Requirements Model would then generate the following outputs:
• Life Cycle Labor Requirements Analysis.
• Labor Recruiting and Retention Plan.
• Labor and Schedule Integration Plan.
• Labor Training and Productivity Plan.
• CII Best Practices Implementation Plan.
• Environmental, Regulatory, and Political Impact Plan.

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These outputs would provide the framework for the comprehensive development of a
skilled, well-trained, well-led construction workforce. It is anticipated that this model
can be applied at the local project level, organizational level, community or regional
level, and the industry level.

Conclusion
This paper states that there is a long overdue need to address construction industry craft
issues in a deliberate, well researched, and engineering study manner. The issues related
to employment of adequate numbers of trained and motivated craft labor can be best
resolved through a detailed modeling approach. This approach would consist of
identification of inputs to the research, use of identified modeling tools and techniques
for analysis, and result in the outputs of specific plans. These plans would generate a
much more detailed approach than has been used in the past to address sourcing,
employing, and effectively utilizing craft labor on large construction projects. The need
for adequate numbers of well led and competent craft personnel is well recognized by the
leadership of the construction industry. The question remains as to whether those leaders
also recognize the need to apply resources to study the problem and find modern
solutions.

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