CW/CE’s: Leveraging a competitive advantage with greater labor opportunities

Any industry needs a robust workforce to function –technology, manufacturing, agriculture, energy and power, health care and countless others- labor makes everything tick. This goes without saying in the construction market, one of the most labor-intensive of all industries and particularly in the electrical contracting sector, requiring highly-skilled professionals.

Since 1901, the National Electrical Contractors Association (NECA) has been the unified voice of electrical trades across the country, developing standards for a class of skilled Journeymen electricians and working closely with the International Brotherhood of Electrical Workers (IBEW) union to promote industry-leading training, ensure fair wages and establish safety policies. Customers know when they call on a NECA-stamped member contractor, they will receive the industry’s best and brightest professionals backed by a high quality, “on-time, on budget, right-the-first time,” guarantee.

NECA helps certified union contractors stand out because the road to becoming a Journeyman is neither an easy one nor one attainable by all. First, there is an intensive application process to become an apprentice, followed by several years of field experience and additional training. An apprentice eventually becomes an Inside Electrician (IE), better known as a Journeyman electrician.

New worker classification

The Journeyman has been the bedrock of the electrical trade for decades. Journeymen are highly-skilled, highly-paid electricians, whose skill and experience in the craft make them important resources for NECA contractors. In the past, NECA contractors have only had access to apprentices and Journeymen. But therein lies the problem: how are NECA members, hiring the most expensive Journeymen labor, supposed to compete with less expensive non-union electrical contractors on projects that do not require the same level of skill?

For example, an LED lighting retrofit in a warehouse requiring basic lighting change outs –a non-union contractor can bid much lower on the project, not having to cover the costs of Journeymen. Such situations have caused NECA contractors to lose market share in sectors such as the commercial and retail markets.

In response, NECA has adopted a new worker classification in the past several years; the non-union Construction Wireman/Construction Electrician (CW/CE) as a means to gain market share and offer member contractors opportunities to make their businesses more competitive. “The CW/CE idea came about so that we could bring people into the industry at a pay level that more appropriately matches their skill level,” says Geary Higgins, NECA vice president of labor relations. “They will have an option to move up to Journeyman, but if they want to stay at that level for the rest of their career, they can.”

Managing and matching the skill to the job

For the most part, CW/CEs are a hugely variable workforce –some were project manager or estimators at previous non-union companies and others were manual laborers; the skill set is broad. To match this gamut, NECA has developed classifications of CW/CEs –CW/CE-1 through CW/CE-5.

Overall, any class of CW/CE requires more supervision than a Journeyman or upper-level Apprentice. “Contractors need to develop the right ratio of lower cost CW/CEs with fully-trained Journeymen who can supervise depending on the type of work and the job at hand,” measures Higgins.

Upon first impression, it seems as though CW/CE workers are replacing or taking work from skilled Journeymen, but Higgins says that’s simply not the case. Instead, CW/CEs are helping union contractors win jobs that would’ve fallen to non-union competitors by way of a lower bid. “CW/CE is a tool for contractors and the union to find additional workers and bring them into the organized industry, paying them at a rate that matches their skill level,” measures Higgins.

In the past, NECA contractors had no way of utilizing this type of worker and by default, the labor transferred to non-union competition. Since 2005, when the CW/CE classifications were formally accepted with the launch of the Florida Initiative, the program has been adopted in a number of areas across the country, except on prevailing-wage projects.

It is up to each NECA Chapter to negotiate CW/CE agreements into their collective bargaining agreement with their respective IBEW Local. Thus, there is a great discrepancy across the country and between regional chapters.

CW/CEs at work

The CW/CE model is alive and hard at work for NECA member contractors and in other instances; it’s something companies have yet to implement. In the case of Texas-based Total Facility Solutions (TFS), a niche player focused on delivering turnkey contracting solutions within the full scope of mechanical, electrical and process (MEP) delivery, CW/CEs have allowed the company to leverage a competitive advantage.

“We have utilized CW/CEs on select projects, but the IBEW has strict parameters based on location and where and when they can be used,” tells Joe Miner, manager of the electrical divisions at TFS. “A group outside of our highly technical division does commercial and smaller projects; for those we do use CW/CEs and it’s helped us become more competitive in nonunion landscape.”

In Louisville, Kentucky, Advanced Electrical Systems Inc. (AES), a leading electrical contracting and engineering firm, has utilized CW/CEs in the health care sector. “In the school and university sector, prevailing wage doesn’t allow room for CW/CEs, but AES has utilized some of these workers in the hospital and private market,” tells James Strange, vice president of AES. “But just like any project, when working with CW/CEs, it’s a matter of knowing the individual’s strength and capabilities, how to manage them and put them on the right path.”

In Cleveland, 70-year-old Herbst Electric Company (Herbst), a multigenerational company tackling complex electrical turnarounds from substations to wastewater plants and much more, hasn’t seen the success of the CW/CE model yet. “NECA has introduced the CW/CE classification to help combat union employers loosing bids to nonunion contractors, particularly in light commercial and retail projects,” says John Benevento, president of Herbst. “Unfortunately, CW/CEs don’t fit our business model yet. I’ve made the point to the union that they could also be useful in the heavy industrial market.”

CW/CEs or not, NECA contractors can agree that they are up against one of the most competitive, global economies. The CW/CE is a way for union contractors to gain back market share, keep business and maintain a foothold in otherwise non-union dominated landscapes.