Shipyard Staffing: Balancing Supply and Demand

The good news is yards are hiring again. The bad news is qualified workers are hard to find.

By Art Garcia

Hiring is up at shipyards across the U.S., but wages are not and neither is the availability of qualified craftworkers to fill the jobs as welders, pipe fitters, electricians and other skilled positions. “In our region down here on the Gulf Coast our problem is people are hiring but we’re having a tough time getting qualified candidates,” said Travis Short, President of Horizon Shipbuilding in Bayou La Batre, AL. The skills’ shortage, he said, is across the board: “Young people coming up in the business today, we’re literally having to train. We’re currently training 50 percent of our new hires.” Over the past several months Horizon has been hiring every day and now is up to about 300 workers, double the number of a year ago.

“For the kinds of vessels we’re building, whether it’s yachts, patrol vessels or the technically challenging LNG supply vessels, you still have to look closely before you can find workers you can keep, who will actually do the work,” noted William Smith III, Partner and Vice President of Sales & Marketing at TY Offshore, formerly Trinity Yachts. “Unfortunately, I think it’s symptomatic of the whole country. We’re not getting the quality of people we used to get 10 and 20 years ago. Work ethic, pride, I don’t know what it is. We just have to look a lot harder and be more selective than we used to be.”

“There’s sometimes enough people to hire, just never enough good people,” commented Richard Bludworth, President and owner of Bludworth Marine in Houston. Bludworth does vessel repair and construction in Houston, Galveston and the Golden Triangle of Orange, Port Arthur and Beaumont, Texas. Hiring, he said, varies in those markets and from time to time in any given year: “For the past 12 months, we’ve been pretty much able to hire as needed, when needed, more so in Orange than in Galveston, with Houston being slightly better than Galveston. Generally, we’ve been able to get the people we need, but for any particular project at any given time in the process we’ve seen shortages. For the most part, certified welders are the most difficult to find. Good electricians are difficult to find.” Craft employment at the company totals 180-185 workers, down slightly from a high of 200 over the past 12 months.

Ups & Downs
When shipyard business is good, finding first-class craftsmen is much more difficult. Shipyard trades have become an aging population with fewer workers entering the workforce. “It’s hard to attract people to the industry,” said Matt McClone, Division Manager at Tradesmen International in Macedonia, Ohio, a construction labor support company with 11 marine offices in the U.S. It says it provides access to one of America’s largest pools of tenured and highly skilled craftsmen, thousands of them, each fully certified.

The economic recession had what McClone terms a “huge” impact on people entering the industry, with more people choosing to go to college than enter the trades. The slowdown made the shipyards less attractive, just as it did other industries, among them building and construction. He said that while there may be ship welders and pipe fitters available to fill job openings, it’s not easy to find high-caliber craftsmen who are safety-minded and willing to travel: “The willingness to travel cross country to maintain employment isn’t as strong as it used to be.” When Tradesmen employees complete a project, they must be ready and willing to move to the next job assignment.

The BP spill definitely impacted the shipyard job market, affecting repair work and activity in the yards and on the water. “The quality people started getting out,” McClone noted. “There are still a lot of workers, but it’s harder and harder to find and retain the top-notch quality craftsman.” That’s prompted Tradesmen to turn to entry-level vocational schools in hopes of finding interested students.

“It’s very important that they see the shipyard trades as a positive and profitable career, something they can make a good living doing,” McClone explained. “Catching these people early and treating them right, showing them that shipyards can be a safe livelihood and a place where there can be upward mobility, as well as a lot of opportunities for growth – that’s the key.” Tradesmen doesn’t reveal the total number of employees it has placed in shipyard jobs, but McClone says it’s substantial. The focus is not only on attracting quality individuals but, more importantly, keeping them.

Tradesmen’s placements have been  on the upswing since 2011 when they were about 30 percent higher than 2010, which was the worst year for hiring in the six years Todd Martin, National Marine Sales Manager, has been with the company. “We really had high numbers of people working in 2007, 2008 and 2009,” he said. “The recession didn’t really hit us immediately, not until 2010, but we’ve had a very steep recovery from then.” This year has been very good so far with new hires ahead by 40 to 50 percent from last year.

The Staffing Challenge
Pipe fitters and marine welders are the skills most in demand. “Marine welding is very different. You can’t just take a guy from the industrial welding side and bring him into a shipyard to work on ship repair or shipbuilding,” noted Martin. “Right now, the refit and repair side is quite busy, but newbuild yards are starting to come on line.” He said there’s been a lot of pent-up demand compared with several years ago and plenty of new orders every day for newbuilds: “This year looks good but we believe next year is going to be a very good year for newbuilds and repair work.”

Tradesmen International doesn’t train or retrain workers. In the staffing industry, the expectation is that top-rated journeymen-level workers will be provided to supplement the existing workforce. The company is developing the ability to train by partnering with its clients to develop apprentice programs and opportunities to bring in workers without a marine background and give them the experience needed to enter the industry. Martin said that in the 1980s and early 1990s there weren’t many workers entering the trades, creating a huge vacuum of upper-level experienced craftsmen in their late fifties or early sixties. “Part of our future business plan is to train and get new people experienced, but it has to be a very close relationship with the yard,” he stated.

His company hopes to partner with trade and specialty schools, such as yacht-building schools. “We’ve had discussions with them about how we can help them get students and getting jobs for the students after they’ve had training. It’s definitely a need,” Martin said. He cited the deep-seated tradition of going to college and then getting a job: “Those opportunities aren’t there anymore, and I believe the new generation is getting interested in the trades. Parents are starting to direct their kids that way too.”

The Problem With Wages
While the demand for workers is rising, shipyard wages are not, having held steady for seven or eight years. “Wages are not going up at all, but there is demand,” Martin explained. “The pressure isn’t on us to fill job orders but to operate with the lower pay rates. That’s the problem. Rates are decent but, of course, guys who’ve been working 10 to 15 years in the industry want to make the most money they can.” Hires through Tradesmen are Tradesmen employees who receive health insurance and 401(k) plan benefits.

“We don’t price the job and we don’t bid the job. We just bid the labor,” Martin stated. Companies like Tradesmen, he contended, “are the wave of the future. They’re our employees and we keep them working. We’re an ally with the industry. We’re sending our employees to work on their projects and supplement their workforce. When the project comes to an end they will let our guys go and we’ll have another spot for them, hopefully. Very seldom do we have to lay people off.” Tradesmen does no hiring from overseas other than some foreign workers holding U.S. green cards.

Another view on wages comes from Richard Bludworth, who said shipyard and repair wages have crept up over the past 12 months. At Horizon Shipbuilding, Travis Short expects to post about a 10 percent increase in hiring, approximately 30 workers, before summer. He hasn’t seen the competition for workers push up yard wages much, if at all, because most yards are willing to offer good pay. “As an employer,” he said, “we try to pay well from the onset and continue that so we’re not in a battle for good people all the time.”

Location, Location, Location
Martin at Tradesmen said a large percentage of its skilled craftsmen are willing to travel for higher wages, such as to the Pacific Northwest and California, where the pay is higher but so is the cost of living. Shipyards in the Gulf are “staying busy and getting busier. Since December we’ve seen a big uptick in all activities all over, in the Gulf, the West Coast, the Pacific Northwest, southeast Florida, the Atlantic states. There’s not one region lagging behind the others by much.”

Eugene Caldwell, Vice President and General Manager at Bay Shipbuilding in Sturgeon Bay, WI, said it’s doubly difficult to find engineers and designers “because we’re not on the prime Gulf Coast. There are workers available, but finding them is difficult and then finding the small percentage who want to come here is even more difficult. It’s always a challenge for the small yards here. When I call and say I have a job for you in Wisconsin and they’re down in Florida, they really don’t want to come up here.” – MarEx