N E W S I N D U S T RY
DON KADAIR
TALENT GAP: Scott Barringer, president and CEO at PALA Group, says the number of available construction workers in the region has been on a 15-year decline, impacting the number of jobs the company can bid to work on.
Construction tsunami
With several chemical and renewables projects on the horizon, Baton Rouge’s industrial labor bottleneck could soon reach a breaking point. BY SAM BARNES
THE LABOR FORCES of many industrial contractors in the Capital City are already maxed out and it could get a lot worse should an abundance of expected projects crank up later this year and into 2024. And of all of Louisiana’s metros, Greater Baton Rouge has the largest volume of work about to break ground. Loren Scott, economist at Loren C. Scott & Associates in Baton Rouge, expects a spike of about 8,000 industrial workers, largely due to several impending capital projects in the chemicals and renewables sector such as Grön Fuels in Port Allen and the retrofit of the Shell plant in Convent. “Baton Rouge has a host of capital projects with a 60 percent probability of breaking ground,” Scott says. “If you check with any
engineering firm, most of them are slammed with front-end engineering and design work. “There are all these signals out there that there will be a significant bump in the demand for workers. The question is, where are they going to get the folks? One electrical firm already has 100 positions to fill.” David Helveston, president and CEO of Associated Builders and Contractors’ Pelican Chapter, says many of his members are already at full employment, and a presumed influx of work will make it difficult for them to find the qualified workers they’ll need. Helveston meets with the Industrial Contractors Council once a month to gauge future needs. “They expect the labor market to tighten significantly over the next year as many of these projects get under way,” he says. However, he notes that they’re equally concerned about the impact of the work on the already-strapped supply chain and material costs. Scott Barringer, president and CEO at PALA Group, says he has been in close communication with the Greater Baton Rouge Industry
Alliance, as a member of the ICC, to discuss future workloads. He says that any expected bump in worker demand will only exacerbate a long-term problem. “For the past 15 years, we’ve experienced a chronic decline in available people to work,” he says. “That could definitely impact a contractor’s decision-making. We look at our backlog, our core workforce and determine if we can adequately man the job.” It will also jack up wages as contractors try to entice workers from other states. Barringer expects wage rates to increase as projects are released and contractors compete for the same small group of workers. “Ironically, we currently have more workers leaving the state for work than we have coming to Louisiana,” he says. “Construction workers go where the opportunities are and where they can make the most money.” Glen J. Gulino, executive vice president of ISC Constructors LLC, says his company’s executive team has been discussing the best ways to prepare for the influx. “We feel most of the heavy lifting will take place in 2024, 2025 and 2026,” Gulino says. “That will be sustained as these projects continue.” ISC currently maintains a workforce of some 1,200-1,600 craftspeople, and during cyclical maintenance cycles it will bring in another 50 to 300 employees to support maintenance turnarounds. Fortunately, ISC hasn’t had to turn down work due to a lack of manpower, although Gulino says that time could come. “We can’t take our eye off the ball,” he says. “When we start getting these wage and compensation pressures, our biggest priority is ensuring that our associates are properly compensated and have good benefits to keep them from going elsewhere.” They currently benefit from a steady supply of trainees being funneled through the ABC training program.
Daily-Report.com | BUSINESS REPORT, March 2023
54-63 News.indd 55
55
3/2/23 12:53 PM