This document summarizes presentations from Harry Harrison of Wood Group Mustang and Brian Stamper of CURT/CLMA on labor shortage risks and mitigation strategies in the energy construction industry. It outlines the current skilled labor shortage problem, noting demand exceeds supply. It then provides details on current and projected skilled labor demand and shortages across different industrial sectors and crafts. Finally, it describes tools from CURT/CLMA that help analyze project-specific labor needs, risks, and availability to help mitigate risks from labor shortages.

1. Labor Shortage Risk
Mitigation
Energy Construction Forum
Galveston
March 3-4
Harry Harrison, Wood Group Mustang
Brian Stamper, CURT/CLMA

2. Leading Global EPCM Provider
• Founded 1987 in Houston, Texas
• Joined Wood Group in 2000
• Rebranded to Wood Group Mustang in 2012
• More than 11,000 projects for 350 clients
• Consistently ranked as a Top Workplace
• Approximately 8,500 employees worldwide
• Core services:
– Project management
– Engineering
– Procurement
– Construction management

3. Our Core Values

4. Industry’s Challenge
www.myCLMA.com
The Problem
Ø Skilled labor demand far
exceeds skilled labor supply
Ø Labor shortages equals high
risk, painful cost escalation
Ø Industry has lacked an
effective, dynamic way to
understand labor risk & plan
The Challenge
Ø What and where are the
challenges
Ø Which industry sectors?
Ø Which crafts
Ø Short-term or long-term?

5. Supply/Demand Gap
www.myCLMA.com
The
past
year
saw
an
increase
of…
≈
200k
in
skilled
labor
demand
≈
150k
entered/re-­‐entered
labor
force

6. Supply/Demand Gap
www.myCLMA.com
The
Industrial
Market
• Peak
Demand
of
over
1.2m
CraC
Demand
by
industrial
markets
• 30%
Power
GeneraGon
≈
360k
in
skilled
labor
demand
• Peaks
–
Q1
2018
• 25%
Manufacturing
≈
300k
in
skilled
labor
demand
• Peaks
-­‐
Q2
2016
• 23%
Process
≈
275k
in
skilled
labor
demand
• Peaks
-­‐
Q1
2017
• 15%
Chemical
≈
180K
in
skilled
labor
demand
• Peaks
-­‐
Q1
2017
• 5%
Refinery
≈
61k
in
skilled
labor
demand
• Peaks
-­‐
Q2
2017
• 2%
Other
≈
24k
in
skilled
labor
demand
• Peaks
–
Q2
2015

7. www.myCLMA.com
Market Pressures (Age Demographics)
An
es6mated
17%
of
the
construc6on
workforce
will
re6re
in
the
next
decade
or
so,
represen6ng
aBri6on
of
about
800,000
skilled
workers.
The
percentage
for
supervision
is
much
higher.
24.9%
15.5%
3.9%

8. www.myCLMA.com
Market Pressures (Gas Plays)
• Energy
• Natural gas prices
• Made in America resurgence
• Labor cost increases overseas
• NG construction past 5 years ≈ 46% ▲
Source:
Associated
General
Contractors
of
America

9. www.myCLMA.com
Gulf Coast Base-to-Peak

10. www.myCLMA.com
Sophisticated. Not Complicated.
Owners
Contractors
Unions
Governments
Underwriters
Suppliers
Brokers
Consultants
A/E Firms
Industrial & Non-
Industrial Projects
(Demand)
Worker data input
by contractors &
unions (Supply)
ü
Secure
ü
ConfidenGal
ü
AnG-­‐Trust
Protected
ü
90-­‐Day
Updates

11. www.myCLMA.com
• More
than
4M
projects
• Value
of
projects
≈
$4.25T
• Over
70%
of
U.S.
non-­‐residenGal
construcGon
• Over
76%
Industrial
construcGon
• About
68%
Non-­‐Industrial
construcGon
• Tracks
49
craC
disciplines
• Now
tracking
14
management
/
supervisor
posiGons
The CLMA® Database

12. www.myCLMA.com
Easy Project Input
Project Name:
Enter a unique project name/
code
Project Class:
• New Construction
• Maintenance/ Shutdown
Project Type:
• Capital
• Annual Capital Program
• Maintenance
• Ongoing Maintenance
Industry Type:
Choose from 99 industrial and
non-industrial industry types.
If the industry type you need
isn’t there, we’ll customize
one for you.

13. www.myCLMA.com
Easy Project Input
Project Status:
Select your project status
from 11 options ranging from
Conceptual Planning (pre-FEL)
to Construction Completed
or On-Hold
Probability:
Enter the % likely that the
project will commence
Time Units:
Indicate your preference for
tracking labor utilization –
Daily,Weekly, Monthly
Total Project Cost:
Enter the total installed cost
of the project

14. www.myCLMA.com
Easy Project Input
Start / End Date:
Indicate the estimated date
construction will begin and
the estimated construction
completion date
Zip Code:
Input the project zip code
Project Notes:
Enter any relevant notes
Bundled Projects:
Bundle multiple small projects
with the same zip code and
similar start/end dates, and list
them here

15. www.myCLMA.com
Sample Project
Project
Descrip6on
Chemical
LA
Project
Type
New
ConstrucGon
Project
Loca6on
Baton
Rouge,
LA
Industry
Type
Chemical
Project
Status
Early
FEL
1
Project
Cost
$1.35B

16. PLF® Identifies Project Labor Needs
Quickly understand your
skilled labor requirements on
a craft-by-craft basis, along
with peak headcount overall
and by craft.
Chemical
Project
Louisiana
www.myCLMA.com
1,251

17. Click the Risk Indicator & find
mitigation options that
correlate to the CURT®
Skilled Labor Shortage Risk
Mitigation white paper.
Visualize Risk. Take Action.
Chemical
Project
Louisiana
www.myCLMA.com

18. Customize Risk Profile
Chemical
Project
Louisiana
www.myCLMA.com

19. www.myCLMA.com
Analyze Competition for Crafts
Analyze
project
labor
challenges
and
risk
dynamically
Visualize your project’s
competition for skilled labor
on a craft-by-craft basis
Chemical
Project
Louisiana

20. Labor Supply – U.S. Sample
Sample
Data
for
Demo
www.myCLMA.com

21. Labor Supply – TX Sample
www.myCLMA.com
Sample
Data
for
Demo

22. Labor Supply – TX Sample
Sample
Data
for
Demo
www.myCLMA.com

23. www.myCLMA.com
Market Demand (TX Sample)
5% Growth
Age 60 Attrition
Visualize age attrition over time
& required replacement of
crafts to meet demand

24. www.myCLMA.com
Market Pressures (Today’s Issues)
Project
cancella6ons
Project
start
delays
No
impact
Re-­‐work
Overall
project
budget
Safety
Absenteeism
Schedule
Turnover
Quality
Produc6vity
Cost
of
labor
7%
15%
19%
23%
25%
27%
28%
35%
36%
45%
49%
52%
Na6onal
survey
of
531
construc6on
industry
leaders

25. www.myCLMA.com
Market Pressures (Today’s Issues)
Na6onal
survey
of
100
construc6on
industry
leaders

26. www.myCLMA.com
Finding Labor Issues (Today’s Issues)
Na6onal
survey
of
100
construc6on
industry
leaders
79%
21%
Yes
No

27. www.myCLMA.com
Safety Issues (Today’s Issues)
Na6onal
survey
of
100
construc6on
industry
leaders
65%
35%
Yes
No

28. www.mustangeng.com