10 Benefits of Being a Union Contractor

 

 

For over 20 years now, I’ve had numerous conversations with people who simply do not know the benefits of being a union member. For the most part, many are quite simply ignorant; they have erroneous ideas of what it means to be a union member. Moreover, I do not use the word ignorant in a derogatory or negative manner, either. Oxford Languages, the online dictionary you get when you google a word, defines ignorant as “lacking knowledge, information, or awareness about a particular thing.” Therefore, if you just do not know about something you are, by definition, ignorant on the subject. In that line of thought, I am ignorant of A LOT: I am NOT a mechanic, I do not know what it is to own and maintain a boat, or what it’s like to be a woman. The truth is, we all are ignorant of many many things.

However, this post isn’t about or for employees being a union member. This post is for contractors; I have encountered contractors who just do not know about the benefits of partnering up with a local union. I’ve had several conversations recently that confirmed this. Many think in terms of what it’s costing them – not what they get when partnering up. To that end, I thought it prudent to highlight 10 benefits of being a union contractor. And, given that I am an ironworker by trade, we will be talking about becoming signatory with the ironworkers in some of the examples – though I suspect most if not all of the other building trades offer much of the same.

 

1. Access to Trained Skilled Trades Personnel

 

Union contractors benefit from having a partner

 

This is the first and for good reason: The skilled trades shortage is real and problematic for everyone. Unions, however, have a network and intentionality when it comes to providing their contractor partners with trained members that the non-union doesn’t have. This takes various forms at various times: signing new members up, training apprentices, new career initiatives such as Helmets to Hardhats, leveraging various local unions across the country, and more to ensure signatory contractors have the manpower necessary.

This isn’t to say the above is a magic pill to cure all ills; instead, I want to point out that they are resources utilized to the benefit of signatory contractors. Put another way, the shortage of incoming labor is a problem for everyone – and when you are signatory to a union, you have a partner with extra tools you don’t have when you are non-union. That distinction is important because the resources are valuable, indeed. If all of the available manpower is busy (as is the case in many areas due to the boom we are experiencing), the union will get creative in developing more manpower and that could be more apprentices, strategic recruitment from other industries, among other possibilities – all designed to meet the needs. Without partnering up with the union, you are on your own – as many non-union can attest. Many union contractors would articulate the valuable partnership they have with the union – especially when it comes to strategic recruitment and retention.

I’ve noticed an uptick of non-union contractors reaching out to unions in search of skilled personnel, due to their struggle as individual businesses. Viewed under the microscope, the shortage doesn’t hit all equally; instead, the non-union has an even harder time recruiting than their union counterparts. For this reason alone, it’s a tremendous benefit when you partner up with a union to help recruit, train, and retain skilled labor.

You can take this to the bank, too: the lack of skilled trades personnel will only get worse before it gets better – IF it gets better at all for many. I personally know companies who spend far more time than they should, trying to recruit instead of growing their business. Conversely, I work closely with a union multicraft contractor who told the union they could grow by 20% if they could find and employ top talent.

And guess what? They not only have grown by 20% because the union helped them recruit and grow – they are also expanding into other geographical regions, too – true business development. IF you want this and are looking for solutions, drop me a line – I can certainly give you more information and get you connected to the right people. Definitely one of the benefits of being a union contractor.

2. Access to a Registered Apprenticeship Program

 

A RAP is a great way to recruit and train for the next generation

 

Depending on some of the work you either pursue or are planning to, being a part of a Registered Apprenticeship Program is a big deal. What’s more, they are the golden standard, providing training (theory along with hands-on), and are a recruitment tool.

Why? Because they offer another viable option to college and the debt associated with it – AND you get paid to learn. We should be touting this from the rooftops as far as I’m concerned. Plus, it also is another way for you to recruit and train up a skilled workforce – in partnership with the union. I know so many companies who love to employ apprentices: from the reduced cost to having them learn the specific way the company does things and everything else in between, they are a plus.

Additionally, there are jobs out there with funding that have Registered Apprenticeship Program language in them. This means the dollars spent are seeking to be connected with companies that are part of a RAP and when you partner up with a union you are automatically connected. Being part of an apprenticeship is a great way to build up your company and it’s rewarding, too: it’s always a blessing to see the youthful pride that results from working with your hands – which is just another one of the benefits of being a union contractor.

It’s true as a culture and society we have to tackle the stigma unfairly associated with the trades – but I welcome the challenge and discussion. As far as I’m concerned, there is far more going for apprenticeships than most know – and I’ll gladly tell any and all who will listen.

3. Access to Journeymen Upgrade Training

 

Journeyman Upgrade Training is another great tool contractors have when partnering with a union

 

As a business owner, when you are signatory to a union you have access to what is coined as journeyman upgrade training – and this is BIG for a few reasons. If you were to come to the table with employees already, they would receive any training they needed to make them more well-rounded. If you expanded the work you pursued and it required extra training, the union would see to it the training was given to their members (who are your employees, by the way – this is a big distinction I want to be sure and make). If you needed to have welders certified? The union would do that, too. The training isn’t limited to a specific facet, either; each respective craft has a variety of work they perform. For example, ironworkers can work in structural, miscellaneous, ornamental, reinforcing (rebar), rigging, industrial maintenance – all different facets of work and each could possess various levels of training. I believe just about any non-union contractor would be VERY SURPRISED at what training is available to them when they partner up with a union. Ah, the benefits of being a union contractor.

In short, unions provide training for their signatory contractor partners so they can bid, pursue, obtain, perform, and continue to win work. To that end, it is a very valuable asset for business owners. Whatever helps to reduce your workload, am I right?

4. Ability to Personalize Training

 

When contractors have a special need for training – the union often provides the training

 

This one dovetails off of the previous one and for good reason: I have seen some really interesting training take place over the years – and all for the success of a union contractor either seeking new work or some new requirement(s) that have come up.

Let’s take a look at some training that union contractors have used to their benefit when seeking work. For this example, I will refer to contractors who employ union ironworkers.

Did you know that by becoming a union signatory contractor (which means you sign a contract with the local union) you can have your welders certified through the American Welding Society by a Certified Welding Inspector at the local union?

Did you know you can get OSHA 10 or 30-hour training for your employees when you are signatory with the local union?

Did you know you can get validated 3rd party rigging and signaling certification? Or how about fall rescue training? What about First Aid/CPR? Did you know you can have your employees take foreman training – or superintendent training? Let’s not forget to include cost estimating, bluebeam fundamentals, advanced layout, cash management, change order control, leadership – and so much more – are offered to you as a signatory contractor.

AND here is the kicker: the above (and much more) is at no additional cost to you as a union contractor. Yes, you read that right: the above constitutes thousands upon thousands of dollars and it is a valuable resource a union contractor gets JUST by signing a contract with the union. Talk about the benefits of being a union contractor!

*NOTE: the above is just for Ironworkers! Electrical, Pipefitters, Operating Engineers, and other trades – all have their own specific training as it pertains to their respective crafts. I am an Ironworker and as such, I highlight what they provide. If you want more information, drop me a line and let me get you connected.*

 

5. Fund Management

 

Want something else off your plate? Allow the union to manage the health and retirement funds

 

This is another one of the great benefits of being a union contractor – and one that often goes unmentioned. When you are a non-union contractor, you manage your own funds, IF you provide them at all. I am aware of companies out there who outright exploit their employees in a number of ways – and that usually means no health insurance or retirement – and even misclassification. Now, that doesn’t mean all non-union contractors are like this; indeed, there are many who not only offer health insurance and some form of retirement but also legitimately want to take care of their employees. The benefit, however, when being or becoming a union signatory contractor is that those funds – specifically health insurance and retirement – are managed by trustees made up of management (owners) and labor (union members).

Why is this advantageous? After all, if you are already providing these types of benefits to your employees what advantage does a business owner get from being signatory with a union?

I’m glad you asked. For starters, it takes something off your plate – and if you’re honest, that’s a big deal. There is so much that goes into running a successful company and one less thing to do is always welcome.

Second – and this one is largely unknown – it’s VERY likely that you as a business owner are paying MORE for insurance and getting LESS coverage.  I have spoken to several employees, key individuals, and business owners who tell the same story: The premiums are high, the employee payout is hefty, and the coverage is less than stellar.

Contrast that with the health plans union signatory contractors pay into and you find that for the money, the coverage is superior. I’ve heard this time and time again and the reason why this is true? Those trustees – again, comprised of management and union personnel – negotiate with healthcare companies for better coverage.

IF you provide a retirement account, it’s almost certain to be a 401k – and if you negotiated poorly, the fees could be substantial. Same principle applies here though; trustees negotiate with the administrators of the retirement account (the union equivalent of a 401k is an annuity fund) to keep the fees as low as possible. Moreover, there is also a pension fund (again, managed by a team of professionals with management and union representation) for your employees – and if you truly value your employees, it’s a great added value for them. This is a good segue into the next point.

 

6. Opportunities to Take Better Care of Your Employees

 

Your employees are not clones – they are unique humans who should be taken care of

 

This one is fairly straightforward, but it still requires some more detail. The reason? Because what it means to take care of your employees varies widely amongst business owners. They are your biggest asset in helping you build and maintain your business; it stands to reason you’d want to take care of them.

That isn’t the reality for many though; many are simply paid a wage and maybe some benefits – if they get them at all. Others seem to enjoy better conditions from employers that have a more robust idea of what it means to take better care of their employees.

So, to that end, what does it mean to take care of your employees – and what does it look like to do this better?

I would put forth a few items unions have that present those opportunities – such as greater healthcare for the cost, better retirement access, and increased potential for additional opportunities. Let’s unpack them.

First, the healthcare plans most unions offer are more robust in coverage and cost less to the business owner AND the employee. There is no deductible; the total cost for the plan comes from the contribution you as the business owner make. If you offer sub-par health care then you may see this as an expense; however, IF you truly are looking to take care of those who work and bring value to your company, it’s a value for everyone. The reason for this is that you likely pay a hefty amount of insurance premiums to lessen the amount your employees have to deduct from their paychecks. When you take the amount YOU pay as a company and what your employees pay it is, in most instances, more for less coverage.

Second, better retirement access is another added value you can offer your employees. This comes in the form of two different retirement accounts that most unions have: a defined benefit and a defined contribution plan. I don’t have the time to detail the difference here; instead, you can check out this post: Defined Benefit vs Defined Contribution for more information.

These retirement funds offer your employees a better quality of life when they get older – and if you are serious about taking care of your employees, give them a hard look. Your employees are your greatest asset, hopefully work hard to create and sustain business growth, and providing them with diversified retirement accounts is a great way to invest in them – and you as well.

Lastly, the potential for additional opportunities is greater by being signatory with a union. For example, your business will see additional benefits – greater access to job opportunities, greater access to training, greater access to growth – and by extension, those same benefits are for your employees, also. Many unions provide robust training and your employees – and you as a business – benefit greatly as a result. Yet another one of the benefits of being a union contractor.

 

7. Contractor Marketing & Business Development Assistance

 

Many companies do little to no marketing or business development

 

This is an interesting benefit of being a union contractor and one that is not clearly articulated most of the time. Many unions track opportunities, jobs, and have a network you should belong to. For example, I communicate with several contractors who routinely find out about opportunities they otherwise wouldn’t. Additionally, many companies find that the union helps them with their Business Development – creation of marketing materials, introduction to opportunities, introduction to other contractors – which, by extension is additional opportunity – and more.

In all the years I have been associated with the trades I’ve known so many companies who were content with waiting for the phone to ring for return business. That sounds great until the work dries up. Having your eggs all in one basket is a roll of the dice at best. What will you do when it comes time for diversification of work and income? Will you embrace the challenge and begin to market yourself when you are busy, seeking to avoid that dry spell? Or will you stay the current course, not partner with a union for increased marketing and business development, and chance it?

I know quite a few contractors that have received help on their BD side and they all have the same thing to say: it helped them GREATLY. Most diversified their income and many grew their business – while others expanded into completely new markets. The union provided them with numerous job opportunities, leads, and assistance on various fronts, and they all found that profoundly helpful.

This is another one of the great benefits of being a union contractor and likely one you haven’t considered where unions are concerned. Let’s change that.

 

8. Problem-Solving Advocation

 

We all have problems but having partners who help with solutions – that’s a definite value

 

Let me challenge your paradigm a bit: unions are, by and large, vested in your success as a signatory contractor – and here’s the reason – because when you succeed their members succeed, simply put. It’s a misnomer that a union wants or even has a tumultuous relationship with their contractors; rather, they want to see you winning.

As an example, I’ll point you toward IMPACT – the Ironworker Management Progressive Action Cooperative Trust (hence the acronym). This organization is an entity comprised of management (business owners and companies) and labor (union leaders and members of the Ironworkers International Union) designed to foster greater cooperation. Why? If there is an adversarial role, why would they want to foster greater cooperation?

Because the idea they don’t want you to succeed is a non-starter – they absolutely do. To that end, there are several problem-solving initiatives used to help you – especially in the case of employees – which are members. Typically speaking, the Collective Bargaining Agreement (CBA) outlines not just what the employer must abide by but also what the members agree to. This translates to stipulations and guidelines that allow the union to deal with the members (your employees) in a guided process.

I’ll also take the time to argue with one of the most egregious and misleading lies: unions protect bad workers and you can’t fire someone. Here, let me shout this from the rooftops: WRONG. In the 21 years I’ve been in this industry, I’ve never met a protected worker – and I’ve seen a lot. I’ve spoken to countless union and non-union workers and one thing I’ve discovered is this: IF there is someone who’s protected, it is usually a family member. BUT that has nothing to do with the union though; it’s most often a family member of someone in the management side of the house. Not only is it an unfair characterization, but it’s also untrue.

In contrast, the unions I’ve talked with want to represent the best and they have implemented some things in pursuit of that – like Key Performance Indicators (KPIs), Standards of Excellence, and adherence to contracts. I’ve seen members taken to task over issues, fined, and sanctioned. What’s more, I’ve also seen/heard employers being told to “fire” that employee too; very counter to the “you can’t get rid of bad employees” narrative that’s common.

 

9. Human Resources

 

As far as I can tell, human resources are a shell of what they were initially meant to be

 

Piggybacking off of the above, one of the additional benefits of being a union contractor is when you have standards of excellence and clear contractual stipulations – and they are not adhered to – you as the employer are provided human resource services. How does that work? Because if you have problems (with your employees (who are members of the union, too)) the union likely will deal with them.

A side note of importance: properly understood, Human Resources has devolved into a company-protected department. In the past, maybe it used to have a directive to help employees but that time is past; now it is an entity that, at least to me, is misnamed. It does not help the human resources – that are employees – they merely deal with them. That’s a big distinction.

Conversely, unions have a vested interest in their members (read: your employees) and your success – which means, they often provide some level of actual human resources as it should be – another one of the benefits of being a union contractor.

 

10. Building Up Your Local Community

 

Everyone should want to invest in the community where they live

 

Let’s get down to brass tacks here: you live somewhere and should want your local community to be built up, successful, and productive. Otherwise, you might find yourself in the slums. Investing in your local community is certainly ideal and one of the ways you do that as a business owner is investing in your employees – who then in turn invest in it themselves through disposal income, retirement spending, and job creation. It’s a circle that spirals upwards.

While building up your community can be a byproduct of the pursuit of work it should also be an intentional goal you have. When you are intentional about taking care of your employees (and we have already outlined how you can increase that by being signatory with a union) you are directly investing in your local community. The benefits of being a union contractor increases even more when you know you are directly responsible for investment locally.

 

Conclusion

 

 

The 10 benefits of being a union contractor above aren’t all of the reasons but they are comprehensive enough to really demonstrate the benefit a contractor gets when partnering up with a union. IF you haven’t spoken with a union to see how they can help you do what you do better, then I highly recommend you do; what do you have to lose? With the labor market as tight as it is – coupled with the increased shortage of skilled personnel – there is no time like the present to get connected, have discussions, and partner up for a successful endeavor.

And, as always, if you do not know where to look, who to contact, or just want help in facilitating a meeting, feel free to reach out – I always enjoy educating and helping all involved.

Here’s to your growth!

 

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