Institution: Santa Clara University

DATA-DRIVEN ANALYSIS OF THE FACTORS AFFECTING THE UNION INSIDE ELECTRICAL CONTRACTOR MARKET SHARE

The primary goal of this study was to develop a data-driven understanding of the market share dynamics of union electrical contractors. The National Electrical Contractors Association (NECA) inspired this study, based upon its “1025 Initiative” to increase the market share of NECA members 10 percentage points by 2025.

Based on NLMCC employment data, the average national market share of union locals increased slightly from 34% in 2004 to 37% in 2017. However, the locals experienced different market share trends of growth and shrinkage within the same period. Some grew by multiple-folds and others contracted by more than 50%. As such, market share growth strategies should be identified through a comprehensive investigation that identifies the effectiveness of these strategies for the varying market conditions found in the different union locals.

This study applied a hybrid data collection and analysis methodology that combined NECA Chapter town hall meetings, online surveys, and interviews.

The study revealed the limited availability of reliable and accurate market research data that is available to union electrical construction stakeholders, which should be accounted for when considering and interpreting the study findings. Union market share analysis should be based on insights from multiple metrics that provide complementing labor and economic aspects of the trade union organizations. An economic market share metric can complement the insights from the employment-based NLMCC metric to have a more comprehensive understanding of the union market performance. Some NECA chapters are already investing in creating their own parallel economic market share metric data, and this effort can be replicated in more NECA chapters and IBEW locals.

Identifying BIM Related Costs Due to Changes

Building information modeling (BIM) and prefabrication tools have greatly improved the efficiency of constructing structures but can only enhance construction if the design is reasonably set before their implementation. In fact, BIM and prefabrication become very expensive to use if owners are changing plans once BIM models are developed or prefab has commenced. The situation can be worse for specialty contractors.

BIM and pre-fab enable greater quality and enhance field installation coordination. Contractors, are adopting these tools rapidly and their use is becoming very commonplace on projects. Yet, owners are often reluctant to compensate contractors for the additional work associated with the increased work that follows ill-timed changes to the plans.

This report

  • investigates the costs associated with late changes and how they impact a contractor’s ability to execute the scope of work
  • provides effective suggestions and recommendations, developed from interviews with several successful specialty contractors
  • presents a process for tracking costs plus separate checklists for the electrical contractor, general contractor and owner
  • highlights the extra BIM and prefabrication costs borne by electrical contractors due to late changes and provides sensible tools for avoiding these costs
  • will help specialty contractors, general contractors and owners create an environment in which BIM and prefabrication will help deliver the projects that owners desire at the lowest possible cost and highest level of quality.

Industrialization of Electrical Contracting: Prefabrication and Supply Chain

This report presents the findings of a one-year study funded by ELECTRI International to investigate the determinants and best practices of electrical contracting industrialization. To support the study, a taskforce of electrical construction, supply, and manufacturing professionals was formed to provide the initial input, guidance and results validation. Prefabrication is utilized in this study as a measureable indicator of the industrialization level of electrical construction firms. Accordingly, the study involved three main objectives:

1) Identify and collect best practices of electrical contracting industrialization in terms of prefabrication and supply chain management.

2) Identify industry-related prefabrication feasibility determinants that are out of the electrical contractor’s control, including economic and market parameters.

3) Identify firm-related determinants of prefabrication feasibility that are within the electrical contractor’s control, including operations management and supply chain collaborations.

Logistic regression analysis models were developed to predict the prefabrication feasibility for an electrical contractor by statistically analyzing the data collected in the first phase of research. The appendix of this report presents in detail additional information about the statistical modeling performed.

Statistical Modeling

Two models were developed during this research:

The first model (Model A) suggests that prefabrication feasibility is dependent on the following three variables: union locals’ acceptance of prefabrication outsourcing (unionOutsouce), building information modeling capability (BIM), and strength of the vendor relation with the electrical contractor (vendorRel).

The second model (Model B) suggests that prefabrication feasibility is dependent on the following six variables: unemployment rate (unemploy), average number of employees in the local electrical construction firms (nEmploy), average local electricians’ hourly wage (electWage), union locals’ acceptance of prefabrication outsourcing (unionOutsouce), building information modeling capability (BIM), and the existence of vendor partnership (vendorPartner).

Model B was found to provide more fitting to the analysis data group. However, both models had the same prediction accuracy (75%) when they were applied to the testing data group.

Smart Buildings and Internet of Things (IOT) Impact on Electrical Contracting

Members of the electrical contracting industry recognize the exciting technological advancements of the internet of things (IoT) and their impact on making buildings smarter and more efficient.

ELECTRI International – The Foundation for Electrical Construction commissioned a study to develop short- and long-term strategies for the EC industry to prepare for the new era of smart facilities made possible by IoT technologies and systems. The researcher, Hisham Said, Associate Professor at Santa Clara University, used an extensive data collection process including interviews, an online questionnaire, case studies, and technology taxonomy modeling. This data and analysis served as the basis for developing a comprehensive IoT roadmap for electrical contractors.

The roadmap includes vision-driven strategies to help the EC industry transform into master system integrators (MSI) who can deliver increased value to clients, expand revenue streams, and improve the employment and development of their workforce. The roadmap strategies are explained thoroughly in the full report. The main highlights include:

  • Developing ways for ECs to become more responsible to protect their clients from cyber security threats.
  • Demonstrating how lighting will be the gateway to make buildings smarter and more connected.
  • Transforming contractors into master system integrators to expand their focus from electrical and power systems to holistic building system integration.
  • Creating greater smart building revenue stream potential from services such as building system integration and performance monitoring.
  • Partnering with manufacturers whose systems are compatible with seamless integration and communication to achieve IoT-interoperability between the different smart building systems.
  • Becoming specialists in installing and leasing private in-building and campus-wide wireless communication systems created by the greater need for IoT connectivity and 5G networks.
  • Offering incentives for local JATCs to increase their commitment to low-voltage and video, data, and voice (VDV) training until they can be sustained and justified by the local work volumes.
  • Engaging a new breed of engineering and design workforce who can be recruited and trained in MSI services at both two-year and four-year college institutions.
  • Building a new K-12 outreach effort by ECs to make new workforce generations aware of promising and diverse career opportunities within the smart building market.