The technician shortage: Will a tax credit help?

WASHINGTON, DC — Hvacr contractors could be eligible for a $15,000 tax credit for the number-one issue facing this industry — hiring and training apprentices — under a proposal made by manufacturers to Congress last week.

Thomas E. Bettcher, president of Copeland Corp., spoke about the Skilled Workforce Enhancement Act (H.R. 1824) to the House Committee on Small Business on behalf of the Air-Conditioning and Refrigeration Institute (ARI).

“It is extremely expensive to train workers,” he said, pointing to a study conducted by the Air Conditioning Contractors of America (ACCA), showing that the average annual training cost of an apprentice is almost $18,000.

The tax credit would help alleviate some of the financial burden on small employers, as well as the shortfall of skilled labor in the United States. However, contractors and others in the industry may need to look beyond government for a fix.

Why the shortage

Several factors contribute to this shortage, including low unemployment, declining enrollment in occupational courses, and the lack of training received by skilled laborers once they’re in the work environment.

One also needs to examine how current technicians entered the field as the industry looks for ways to attract more workers.

According to the ACCA survey, “Most of the technicians became employed in hvacr through family, relatives, and friends,” said Dick Shaw, the association’s technical education consultant. Not surprisingly, “School counselors, instructors, want ads, Internet searches, etc., had little impact on recruiting young people to our industry.”

According to the survey, job flexibility, diversity, and growth opportunities were cited as reasons why the respondents became hvacr technicians.

Future technicians also seem to fit a particular personality profile. “Technicians ranked problem-solving systems as their most rewarding daily function,” said Shaw, “and troubleshooting and repair [were ranked] as what they most enjoy about their work.”

What will help recruit technicians to the trade? Job security and the variety of skills required in the workplace were named most important. Then came competitive wages.

If you take this information and flip it to show why the industry is lacking techs, it becomes clearer that:

• The industry has not done enough to promote a technician’s job flexibility and diversity to junior high and high school students, either directly or through guidance counselors.
• The career has not been promoted as a career, with a viable growth path.
• Too many contractors still have not ironed out their seasonal difficulties.
• And the technician’s role is widely perceived as being repetitive “monkey work,” not requiring analytical thought.

These image problems, real and perceived, have dogged the industry for years. They have now reached critical mass.

Talented techs drawn elsewhere

“As a manufacturer, I have concern for my company and our future in this environment of decline among new technicians,” Bettcher said.

“While sales are exceeding expectations as the economy continues to grow, we lack the supply of workers that are capable of installing and servicing this equipment. If this decline continues, there will not be enough workers left to install and maintain our products, which in turn will have a negative effect on sales.”

Rick Jazwin, director of education services, Universal Technical Institute (UTI), Phoenix, AZ, commented that many potential hvacr techs are being drawn off to do automotive work, because “There is no [hvac] industry mindset to train or recruit at the intensity of the automotive industry.

“Basically, the automotive manufacturer is creating a highly trained population of technicians available to their dealer networks across the country. The manufacturers realize that without trained technicians, their vehicles will not be repaired right the first time.

“In the hvac industry, we are still arguing as to whether or not it is beneficial to send a technician to a one-day seminar.”

He concluded that “The hvac industry must start a major training initiative” — differentiated from a certification initiative — “supported by everyone. The industry must also recognize that wages and benefits must be fair to maintain retention. Otherwise that tech will go elsewhere.”

Sidebar: How bad is the tech shortage?

Thomas Bettcher cited several statistics to the House Committee on Small Business:

• The Labor Dept. projects a 17% increase in the need for hvacr mechanics and installers by the end of the decade. This translates into more than 100,000 hvacr technicians needed by 2006.
• The labor force between the ages of 45 and 64 will grow faster than any other age group in the next decade. As these aging workers and Baby Boomers (born between 1946 and 1964) retire, they will take their expertise, skill, and experience with them, leaving new workers without the guidance of senior technicians.
• The pool of trained and available applicants entering the hvacr industry is dwindling. The Education Dept. study says enrollment in hvacr programs declined by 71% from 1982 to 1996.

Apparently, many other industries are also hungry for fresh technician talent.

According to Rick Jazwin, “The automotive industry has a defined shortage of at least 50,000 technicians. To meet the demand created by the shortage, companies such as BMW, Porsche, Volvo, Ford, Mercedes Benz, Jaguar, and VW have contracted with UTI to operate factory-sponsored training centers to train technicians for their dealers.”