One common refrain from today’s construction companies is that there is a serious lack of skilled talent. As the economy emerges from the recession, business is coming in, but it is growing increasingly difficult to find a labor force to fill the need…
Jorgenson Construction is not exempt from this issue, but strong values and ties with organizations such as the Associated General Contractors of America (AGC) are easing the burden. Competition is fierce in Minnesota, but Jorgenson Construction has a comfortable reserve of eight month’s work that helps to plan for a bright future.
In 1983, Jorgenson Construction President Stan Jorgenson was working as a project manager and superintendent for a large Minneapolis construction firm when he started his own company. By 1988, the company, Jorgenson Construction, was strongly involved in all aspects of commercial building. “Our main objective has always been to provide our client with the best outcome for the use of their facility while maintaining budget controls.” Areas in which the company excels include tenant improvements, churches, schools, restaurants, sporting facilities, pharmacies, banks and city halls as well as LEED accredited buildings with strong green credentials.
The company has expanded into other areas quite naturally, Project Manager, Matt Jorgenson explained. “You meet new people along the way as you are performing work and they call on you to do work for them. A lot of long-term professional relationships are formed based on your experiences and how you perform in different areas for your clients.”
Jorgenson Construction seeks out challenging and complicated projects that require the use of its unique problem-solving skills, whether it is unusual structural engineering, sound control issues for radio stations or special requirements for medical facilities. The company completes these projects on budget, within schedule and to a high standard of quality.
The economic downturn was, “a cliff that everyone fell off at pretty much the same time,” says Jorgenson. “It affected our industry for seven to eight years, but we were able to maintain the same level of work during that period. Most companies were lucky to survive. We didn’t have any losing years.” Many subcontractors were barely eking out a living from whatever source they could find. “Most of the subcontractors are back to a healthy level, which is good for everybody.” Jorgenson was able to maintain good solid relationships throughout the slowdown which helped when things picked up again.
Part of Jorgenson’s survival during this period was due to the company’s diversity and its reputation for quality. This contractor does not only build from the ground up, but includes tenant improvements in its repertoire of services. There are always companies that have lease renewals and need a fresh new look for the premises.
The last couple of years have seen Jorgenson Construction growing. It is planning to add office space and new staff: project managers, office support personnel and more construction superintendents. There are also plans to update the phone systems and accounting software. Integration of new technology is taking place for all field personnel. “They are set up with iPads and PlanGrid software to allow our superintendents to make real-time changes to the drawings to track their as-built records.” At the end of the project, a copy of the red-line documents is submitted to the owner along with changes that were made on the project.
In this industry, it is tough to create a solid pipeline of upcoming work. Typically Jorgenson Construction looks to have about six to ten months of work ahead – which it has right now. “That is about as far out as you can go. The longest duration projects we have are two-year projects. If that is going to help in some of the downturn areas, you can look at that.”
Jorgenson emphasizes that, “I can’t advocate the AGC strong enough.” The Associated General Contractors of America (AGC) promotes the interests of the commercial construction industry, through lobbyists and unions, and it has an enormous impact. The AGC also has excellent resources for up-to-date training, whether for supervisory, project management or office staff training, and it possesses incredible resources for any legal questions, union issues or subcontractor forms.
“Whenever you ask them a question or send them an e-mail, they get all over it with good solid answers. They have been a lifeline for us on many occasions with difficult legal questions on what our rights are. There is not one area where the AGC is not able to step in and advocate help.”
An example of the projects Jorgenson Construction engages in is the Brooklyn Park police station. This two-year project was an addition to the station’s existing facility and involved soil reclamation as well as a rebuilding from start to finish. As this remained an occupied building during the construction period, challenges included structuring work schedules around the regular operations of the police department.
“The police chief was great to work with! It was essential that our superintendent facilitated schedules and timing for the sequence of that project to make it all work: whether it was site work, the demolition of an existing building, the addition to the existing structure and the interior modeling of the building that was there.” The cost of the build was $8.3 million.
Jorgenson Construction is involved in projects that range anywhere from $400,000 to $20 million. Other recent projects include the Lino Lakes Fire Station along with multiple full-floor refreshes and tenant improvements of several buildings in downtown Minneapolis.
As far as safety initiatives go, on-site safety inspections are performed on a weekly and bi-weekly basis for all the job sites in the field. Other initiatives have also been started in cooperation with the labor union such as the Minnesota Laborers Employers Cooperation & Education Trust (LECET) safety/driven program. It recognizes laborers for their outstanding performance in maintaining safety standards.
“Each quarter, we nominate two of our employees to be part of that program. They receive recognition and also get their names entered into an annual drawing. We have weekly safety meetings and send out AGC guidelines for toolbox talks. With that program, we are launching a safety awareness initiative program.” Everybody on the payroll from superintendents and foremen to carpenters and laborers must undertake weekly quizzes based on a chosen topic. As an incentive, once a month, names are pulled to receive gift cards.
The minority requirement is a much talked about subject within the industry and Jorgenson is in agreement with other companies.”I would never say anything negative about the minorities segment. Negativity is created when you have people that expect jobs who are not trained and do not have a work ethic, but expect to be paid a high rate. I believe in equal pay for equal work. In the construction industry, as competitive as it is, everybody needs to be a producer and supply labor that will be a plus to the company. Without that, why should they be given a priority?”
Stan believes this is an area that hurt the industry during the downturn when many skilled forces left the construction sector. Now, as a result, there is a shortage. Luckily for Jorgenson, the company has a healthy relationship with labor unions and resources available through the AGC, so it is in a better position than most. However, the lack of training and the ongoing hunt for skilled labor remain ongoing challenges, and addressing them requires a new approach.
“Everybody has been raised with the idea that college is the only answer and college education in the trades have been left out. We need to see that area transition back to where people realize the benefits of the trades and that it is a good living. The training process will take time in order to get the message back out there.” The AGC and carpenters’ union in Minneapolis are advocating for education in the trades and hope to get young people interested in the trades again.
Jorgenson Construction has had several conversations with the carpenters’ union and the laborers’ union about making changes. With many schools dropping trade classes such as automotive, metalworking and woodworking classes, the opportunities for students to enter these areas is greatly reduced. Interested parties have been going to schools to try to bring back some of those programs and to encourage students to see the trades as a viable future career path.
Jorgenson Construction works with several Fortune 500 companies. “I think that being able to get in there, perform and meet the standards that these corporations have in place says a lot about the quality of work we do and the integrity that we have.” In the last year, they have performed approximately 250,000 square feet of tenant improvements with the majority of those having been full-floor renewals for their clients.
Although the company is presently healthy, there are many outside circumstances that could affect future construction. Stan says that the key is to ignore some of the outside influences and take full advantage of what the present has to offer. The last three years have seen a flurry of activity in the industry resulting from accumulated projects finally getting the financing to proceed. He sees a positive increase for commercial business projects over the next three to four years.