Tim Linville:
Our systems that we've developed over the last hundred and so some odd years are portable benefits whether it's healthcare, retirement, and portable training, which allows you to have a real career and not just a job.
Doug Houser:
Not from Rea & Associates studio, this is unsuitable on tour in Cleveland, a management and financial services podcast for entrepreneurs, tenured business leaders, and others are ready to look beyond the suit and tie culture for meaningful, measurable results. I'm Doug Houser.
Doug:
On this weekly podcast, thought leaders and business professionals break down complicated and mundane topics and give you the tips and insight you actually need to grow as a leader and help your organization thrive. If you haven't already, hit the subscribe button so you don't miss future episodes, and if you want access to even more information, show notes and exclusive content, please visit our website at www.raecpa.com/podcast and sign up for our weekly podcast newsletter.
Doug:
For those of you that don't know, we usually record this podcast in art Rea & Associates studio in Dublin, Ohio, but not today. We've taken the show on the road to beautiful Cleveland where we are here with Tim Linville, Chief Executive Officer of the Construction Employers Association.
Doug:
Not only has Tim let us set up shop in their facility, which is a real treat, he is also going to share some insight into what's happening from a construction and economic standpoint here in Northeast Ohio.
Doug:
Welcome to the podcast, Tim.
Tim:
Welcome to the great state of Cleveland, Doug.
Doug:
Yes, thank you. I thank you. I grew up in this area, but don't get back as often as I should unfortunately, but so much going on here in Cleveland, so talk to us a little bit about the construction market and real estate development market. What you're seeing here?
Tim:
Well, it's very active right now. If you're not busy, you should be examining yourself as a company for why you're not busy as a contracting company. A lot of healthcare work still going on, loads of residential high rise developments and redevelopments going on. We have an exciting project coming up with the headquarters for Sherwin-Williams being redone in central downtown Cleveland and another of their R&D facility out in Brecksville.
Tim:
We have an exciting first in... The tallest wood-frame structure in the world, I think I've heard, going to be built on West 25th Street by the West Side market and that's I think 11 stories is the plan and that will be the tallest in the world for a time until I think there's one in the planning stages that might be a little bit taller somewhere else, but that'll be completed after ours, but that's going to be a very interesting project as well. There's just a lot going on.
Doug:
So I know in Columbus we see a lot of redevelopment downtown and I sense that, just having been through downtown here, there's a lot of that going on here as well. Is that the case?
Tim:
Yes, it is and we're excited that Sherwin-Williams has decided to keep its headquarters here because that's going to keep a lot of employees working downtown and keep downtown vibrant. It's becoming more of an attraction for people to live down there and we'd love to see that continue.
Doug:
Yeah, so older buildings are being kind of rehabbed and redeployed in terms of their use and that type of thing.
Tim:
Right, and it's great to see because Cleveland and the... When these older buildings was built, was one of the top cities in the country, one of the top five cities in the country and these are some nice buildings from back when Rockefeller was around and guys like that. And those are being turned from offices into residences now and what a place to call home.
Doug:
Yeah, that's fantastic. Some great architecture and great history there so that's phenomenal. So talk to us a little bit about the Construction Employers Association and your role within the construction community in Northeast Ohio and what purpose you try to serve as an advocate.
Tim:
Sure. Well, you said it well as an advocate for the construction industry, we've been in Cleveland since 1916 when we were started by a group of contractors who felt the need to join forces when it came time to bargain with unions.
Tim:
1916 was sort of at the tail end of the beginning of the organized labor movement in America and so that movement involved employees banding together to improve their lot in life in their work lives. It's at CEA, which was then called the Building Trades Employers Association when it was founded, was employers realizing that by ourselves we're not in a very good bargaining position, but when we join together we can do a lot better for ourselves, and that's how it got it start, and over the years we've, together with our union partners, we've developed basically the way you got to be doing construction, which is allowing yourself as a company to maximize your ability to get the best skilled workers you can and productive workers you can.
Tim:
And the way you do that is you make those things that are essential for an employee to develop a career, you make it portable because construction is from job to job, from project to project, from contractor, sometimes to different contractors. As a trades person, you're going to be moving around. They're called journey people. And so our systems that we've developed over the last hundred and so some odd years are portable benefits whether it's healthcare, retirement, and portable training, which allows you to have a real career and not just a job because it's construction jobs end. That's the whole point is to get the job done.
Doug:
Yeah, so as an advocate then for the industry, talked about some of those great benefits, what do you do for your members specifically in terms of additional added benefits?
Tim:
Sure, so we not only manage the apprenticeship programs, the health plans, the retirement plans together with the trade unions, but we also collectively bargain on behalf of the contractors. We have an advocacy function with legislative advocacy, lobbying, public officials and elected officials for policies that will benefit our members, and that's everything from workers' compensation laws. Most recently in the Ohio State House, we're behind a synthetic urine ban.
Tim:
People use synthetic urine they get at the gas station or at the smoke shop for $20 to beat their drug tests, and it's easy as could be and it's not safe for those who were working around them. Everything from workers' com to this synthetic urine issues, which has kind of a random one to come up, but it makes sense. Tax laws, municipalities, the way they do their taxes very much impacts the way our contractors work because we're all over the place working, to prevailing wage laws which supports public investment into the infrastructure that we've developed in our workforce allows people to have construction as a career, and all kinds of different things on a local level.
Tim:
A lot of what we do, because we're not a statewide organization, is centered on the larger public entities that we do touch, the counties and the cities that we do work with.
Doug:
Absolutely, but I got to imagine they appreciate that consistent approach obviously, and that they can then embrace that and know that it will be consistent and quality too.
Tim:
Right, so not only advocacy, a large part of what we offer our members is safety consulting and training. As a benefit to members, the safety is not only critical, but it's critical to everybody and so everybody as a contractor needs it and needs it very badly and we have certified safety professionals, CSP trainer on staff who is not only a trainer for the OSHA 30 hour classes, the OSHA 10 hour classes, the train the trainer classes, which is an OSHA 50510 class, but he also is able to consult with our members, go to their job sites and basically conduct a mock OSHA inspection for them and then if they so desire, give them a writeup as if they were getting cited for whatever he finds and then they can use that as corrective to take corrective action.
Doug:
Allows them to learn and see were the risks are. I think that's great.
Tim:
Right, another thing that... The gentleman's name is Ken [Krieger 00:09:08] who was our safety professional. He helped develop a program to comply with OSHA's new silica standard. And if you're not familiar, which I don't expect you to be, silica is basically the most prevalent element in the world. It's all the sand, all the concrete, all the... Most substances have silica in it. And when you produce silica on a job site by grinding mortar joints or by cutting concrete on the road or wherever you're working, you have to protect your employees from that dust exposure from inhaling it and clogging up their lungs, getting conditions of the lungs from that exposure.
Tim:
So OSHA recently came out with a standard... I think it was in 2017, and we had built a database because in the standard you either have to test your job operation, how much dust is this job function producing and how much is my employee exposed to?
Tim:
You'd have to do that testing yourself on each job or you have to rely on objective data. Well, there is no objective data, so we built a database back when it came out and partnered with an international laboratory to send out testing kits to our members. They send back the results and from those results we get a database, and now we have the... I think the only one that I'm aware of, database in the country and we've covered I think 25 different states with samples. Sampling coming in from 25 different states in the country and have a lot of buy in to that program. So it's just an example of some of the value we try to add.
Doug:
That's fantastic. I think... and that's one of the things I've always loved about the construction industry is that the companies within the industry, yes, while they're competitors certainly to some degree, they look out for each other and really try to boost up the industry, and organizations like the CEA really bring that to bear I think.
Tim:
Right, and it's through partnering with other organizations like ours, like the AGC of Ohio, the AGC of America, both of those are our partnering entities in our silica program and when we develop something we share it, so that's a nice thing.
Doug:
That's fantastic. Now we were talking a little bit at lunch, I know you have a legal background as well, so maybe talk a little bit about what you see in terms of that, how you bring that background to the organization and try to help the members by having that different perspective.
Tim:
Sure, well I spent eight years at Thompson Hine, which is a law firm in Ohio and I worked in their Cleveland office, came to Thompson Hine directly from law school and specialized in labor and employment law there. And I did good deal of traditional labor law, which is dealing with labor relations and union representatives and when my predecessor, John Frieda, retired in 2010 I didn't have a prior relationship with CEA. They hired a head hunter and found and found me, so it just kind of worked out well for us and hopefully for CEA that way, but I don't really do much legal work in this role.
Tim:
Most of what I do is getting people, whether it's our member contractors to work together for common good, even though they're competitors, or to get our contractors to work well with the organized labor component of the trade unions that they have to work with to get jobs done. Getting people to work together as the naming game of my job.
Doug:
Yeah, but I think having that perspective, that legal background where you understand risk and try to bring parties together, that's invaluable.
Tim:
It is important from an issue spotting standpoint. Half of the battle and in my experience as an attorney, half of the task was knowing where to look. If you see an issue, first of all you have to know it's an issue and that's important in my role here.
Doug:
Yeah, now we've seen... I know in central Ohio this tends to be a big issue and in fact I know there's a political candidate running on this as a single issue candidate and that is the prevailing wage issue. There's battles that some folks fight and try to do away with that and I think it... talk from your perspective about what that means to have that in place and the benefits of having that.
Tim:
Sure, prevailing wage basically ensures that when a public invests in project, a public entity invest in a project, that it gets the best product it can get by having the best skilled people on that job it can have, and you can only have that if you pay the prevailing wage because if you don't, it's a race to the bottom in terms of labor cost for contractors who bid on that public work and they're not going to put in their bid the dollars it takes to hire a career workforce.
Doug:
Quality people who know what they're doing.
Tim:
A workforce who has invested in their training and who value their own jobs enough or their own professionalism enough to think that they deserve a retirement, to think that they deserve healthcare for their families.
Tim:
If you don't have prevailing wage, you don't get that workforce, so that's why prevailing wage is important. And then you get a product as a public entity that then is built by people that don't have that view of their careers and so-
Doug:
As you said, it's a race to the bottom and I'm not sure I want to be in a building or on a road where the labor force doesn't have that that same quality outlook.
Tim:
Right, exactly.
Doug:
That's scary.
Tim:
And I've heard someone that was probably misinformed suggest that you can regulate everything as an employer to the extent where craftsmanship becomes irrelevant and I doubt he's ever set foot on a job site to see how things get done because you just can't dictate every single thing. People are not robots. Even if they were, you couldn't code, you couldn't put enough code in them to rule out all mistakes and achieve craftsmanship.
Doug:
There's no way, yeah. Now it makes me think though of we see so much advance in technology across all industries and certainly even in construction as well. Is that a topic that you see among your members? Is that something that's discussed widely?
Tim:
Absolutely. Technology's changing the way things are delivered significantly from modularisation where much of the job site gets manufactured instead of constructed. It gets manufactured in a factory and then delivered to the job and installed as a large piece, whereas normally in the old days you would have craftsmen on the job, trades people on the job doing every single piece of that. So that then becomes manufacturing and not construction so it's manufactured and delivered. So that's one major thing.
Tim:
Technology in terms of building information modeling, which is basically taking a blueprint that's 2D and making it 3D and sometimes 4D by adding not only what the space looks like from a 3D visual standpoint, but also what the information is about each element, what kind of light bulbs are those so that when I get this building turned over to me as an owner, hospital or office building, what kind of inventory do I need? Where do I go when I need to replace that thing, the fixture or the light bulb or whatever it is you need to potentially maintain in the future as an owner.
Tim:
So building information modeling is very prevalent now. They're using drones to survey job sites and survey not only the topography of a piece of land, but flying through a job site and mapping it out and feeding that information into their models. It's pretty cool.
Doug:
Yeah, and you can be that much more efficient that way. It's not that the technology replaces an employee, it just changes how they work so to speak.
Tim:
It does. It allows more things to get built.
Doug:
Yeah, which is great. So what other trends do you see in 2020 and going forward not only maybe in the industry, but in the region here overall? Anything that perhaps sticks out as something we should keep our eye on?
Tim:
That's a good question. I think apart from this hopefully temporary blip in the economy with the Coronavirus right now, I think the economy is fairly strong still. I think it'll be as strong this year as it was last year and probably for a year or maybe even two years it'll be strong. Beyond that it's hard to see, but I expect things to keep building and investors to keep investing in Cleveland.
Doug:
And that's the key. I think there's a lot of appetite, there's still a lot of capital that is ready to be deployed, so real estate investors know that and that helps then the construction companies. I mean most of them we talked to feel pretty good about where their backlogs look-
Tim:
Yeah, and Cleveland's not an inexpensive place to build. It's actually the... RSMeans publishes a statistic where 100 is like the middle ground, the mean, and then if you're above a hundred you're more expensive than average, if you're below a hundred you're less expensive than average and Cleveland is 97, so we're a good place to build.
Doug:
Well, I think that's important too for employers and we've seen this. I'm a big believer in demographics and employers now want to move where they can have costs that are more identifiable, stable. They want a good employee base, which you can get here. Obviously with strong universities in the region and things like that you can get young folks and all of that and a vibrant downtown certainly helps too.
Tim:
Yeah, we're just like Columbus, Cleveland's a great place to raise a family and develop a career. We have great companies here that people can work at and it's very in a very affordable.
Doug:
Yeah, now if we can just get the Browns turned around a little bit, that would just be that much better, right?
Tim:
I know, I'm not taking credit for that.
Doug:
We can't do everything, but there's hope now at least. It hasn't been that way for a long time so that's good, but I think it's incumbent upon us to try to say look, the region as a whole has so much going on, so much going for it that we want to try to promote that as much as possible. Our firm certainly has an investment in the region and as certainly CEA and its members do, and we're all trying to row the same boat so to speak-
Tim:
Yeah, absolutely.
Doug:
So let's get on the same side, right?
Tim:
Absolutely.
Doug:
Yeah, what are, maybe if you have one or two things that are the biggest risks you see that you try to help your members identify that are out there. Anything specifically within their operations or as an industry?
Tim:
I think one of the biggest challenges that our members face this year, but more importantly in the near future, next 5, 10 years is workforce supply, and our population in the country, our working population is trending towards getting older. And I think... I don't know what the stats are, but I think by in 10 years, roughly 50% of the workforce is going to be above 45 years old in the country, and so finding a good source of motivated and... Motivated people who are going to work hard and care about their skills and their careers, that's the probably most critical issue that our contractors face.
Tim:
I think that issue is faced by not only contractors, whether or not you're in Cleveland, Ohio or Columbus or in Kentucky or Alabama, no matter who you are, you have that challenge. Manufacturers have the same thing and we're kind of competing for the same pool of people in a lot of ways. So finding out how to solve that puzzle is our biggest challenge.
Doug:
And along those lines, I know you guys do a lot of workforce development and you support programs, you get in schools at an early age and try to talk about quality of life, quality of career, correct?
Tim:
Absolutely, we're in 13 different schools, I think it is with the ACE Mentor program and that involves over a hundred industry professionals from architecture, construction and engineering fields that go twice a month and volunteer after school in those programs in those schools with afterschool clubs, with the juniors and seniors in high school, reach out to middle-schoolers.
Tim:
We're just starting a new initiative called Cleveland Builds with CEA, the other associations in town and the Cleveland building trades to do a better job of owning, as an industry, the process and results of our workforce development efforts. Each trade has its own workforce recruiting efforts into their trade with the carpenters, electricians, bricklayers, they each have their own, and not that we're going to replace that, but as an industry, we need to assist them and then track results and track what works and what doesn't and coordinate between them to do a better job and get more people into the trades.
Doug:
Yeah, I think it's a matter of education and just informing the potential workforce out there, the opportunities that are there, you know?
Tim:
Right, I mean as an attorney whose parents were not involved in the trades, I had no idea what the trades were before I came to work at CEA. I didn't know what it would be like. I pictured a guy on the street corner of New York in a movie I saw it with a jack hammer and wife beater on. That's the image, but that's not what it's like.
Doug:
Right, yeah. That's awesome. And I think particularly for the young generation... We had a podcast now two weeks ago, we talked about millennials and the things that they want. They want different things. They want that work life balance. They want to feel like they're adding some value and what they're doing with regard to their career, and I think that the trades are just a perfect fit for those things, but oftentimes they're just not informed just the opportunity so-
Tim:
School has been focused on admittance for way too long and I think people are waking up in the education circles. I've heard a lot about the trades in the last year and a half, two years from the State House, from the governor's office, from even higher department of education so... And nationally even, but it's taken way too long and we've missed a generation or two with that college only message.
Doug:
Yeah, well I applaud you for your efforts and Tim, you're a great leader for the industry and for the organization and-
Tim:
Thank you, glad to have you guys involved too.
Doug:
Yeah, absolutely. Thank you for your insight and also the use of your studio today, so very much appreciate that. Great stuff.
Tim:
Well, I'm learning from you guys. You have a lot more episodes than I do, so this will be my first episode of season two because I haven't had one since December so-
Doug:
Awesome, well it'll be a joint effort here in terms of getting the word out, so appreciate that. And if you want more business tips and insight or to hear previous episodes of unsuitable, visit our podcast page at www.reacpa.com/podcast and while you're there, sign up for our weekly podcast newsletter for exclusive content and show notes.
Doug:
Thanks for listening to this week show. Be sure to subscribe to unsuitable on Apple podcasts or wherever you're listening to us right now, including YouTube. I'm Doug Houser. Join us next week for another unsuitable interview from an industry professional.
Disclaimer:
The views expressed on unsuitable on Rea Radio are our own and do not necessarily reflect the views of Rea & Associates. The podcast is for informational and educational purposes only, and is not intended to replace the professional advice you would receive elsewhere. Consult with a trusted advisor about your unique situation so they can expertly guide you to the best solution for your specific circumstance.