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The Impacts of Undergraduate Construction Internships on Recruitment, Training, and Retention of Entry-Level Employees of the Construction

Industry

David Bilbo1, Jose L. Fernández-Solís 2, Nathan Bohne 3, Mohamad Waseem4

ABSTRACT

The purpose of this study is to identify and analyze the impact of undergraduate construction internships on recruitment, training, and retention of entry-level employees in the construction industry. This study analyzes short term and long term benefits, if any, to both the intern and the company. To obtain this information, a survey was conducted of construction companies that recruit and hire entry-level employees from the Construction Science Department at Texas A&M University. A total of 253 registered Construction Science Internship Providers were asked to participate in the study. The survey gathered data identifying current trends of internships in construction education, analyzed the performance of interns versus non-interns, and assessed the overall effectiveness of the undergraduate internship program. Descriptive and inferential statistics were used to analyze the results of the surveys. This study allowed the sampled Internship Providers the opportunity to provide feedback regarding recruitment, training, and retention of undergraduate interns, as well as the opportunity to suggest improvements to the undergraduate internship program in the Construction Science Department at Texas A&M University.

1. Dr. David Bilbo is the holder of the Clark Endowed Professorship in Construction Science. He joined the faculty of Construction Science in 1977. Bilbo is a Faculty Fellow of the Hazard Reduction and Recovery Center at Texas A&M University. He has done extensive research on construction education graduates, including a 20 year longitudinal study, and earlier studies on the supply and demand for construction graduates. Bilbo continues to research on the issues of diversity and gender issues faced by the construction industry. Dr. Bilbo formerly served as the graduate program coordinator and associate department head for the Construction Science Program at Texas A&M University. 2 Dr. Jose L. Fernandez-Solis is an Assistant Professor in the Construction Science Department at Texas A&M University. Dr. Solis is a member of Royal Institution of Chartered Surveyors in the United Kingdom. His research interests include green building, Corps of Cadets Company A-2 Academic Mentor, CRS Fellow and Sustainable Urbanism Fellow. 3. Mr. Nathan Bohne holds a Masters of Construction Management from Texas A&M University.

.4. Mr. Mohamad Waseem is a current student in Masters of Construction Management program at Texas A&M University.

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1. INTRODUCTION

1.1. Background An internship is a mutual work agreement between an intern and an employer (before the student

becomes a full time employee), for a specified period of time, in exchange for pay, college credit

hours, or both. To acquire the skills, knowledge, and methods necessary to become a successful

construction manager, the student intern must be willing to learn and to invest his or her time,

patience, and abilities. While the skills needed to become a construction manager are many, the

fundamentals begin in the classroom. A college degree is generally accepted as essential in

today’s competitive work environment. However, simply having a college degree is not

sufficient. The well-qualified employee also needs experience in the workplace in order to

clearly understand the job expectations. Ideally an internship will provide this opportunity. This

study proposes to identify and analyze the impact of undergraduate construction internships on

recruitment, training, and retention of entry-level employees in the construction industry.

Companies rely on interns more and more as labor shortages have resulted in an

increasing backlog of work (Fedorko, 2006). As the construction industry faces these labor

shortages, the recruitment, training, and retention of entry-level employees remains an important

task. Entry-level employees represent a small but important subgroup of the total employees

within the construction industry. Interns are considered to be temporary employees, yet they

share the same responsibilities as their professional counterparts, are usually paid less than full

time professionals, and seldom receive full-time benefits such as health insurance and retirement.

Coco (2000) reported that companies, when hiring interns, experience increased job

placement, decreased turn-over rates, and increased job satisfaction and starting salaries after the

internship ends. The economic health of the construction industry has a direct impact on

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consumer confidence and spending. According to a report published by the Bureau of Labor

Statistics, the construction industry was valued at $647.9 billion dollars (United States

Department of Labor Statistics, 2006). From 2001-2006, the Gross Domestic Product (GDP) of

the construction industry increased an impressive 37.99%,. The raw forces behind construction

are demographics (population increase) and increase in affluence (the ability to afford more, new

or upgraded space) (Fernández-Solís 2008). Since increased affluence translated as consumer

spending fuels new construction and increases employment opportunities within the industry, a

strong economy has resulted in construction employment rising from 5,813,000 employees in

1997 to an all-time high of 7,689,000 employees in 2006. Future growth and development will

require greater recruitment and training of entry-level personnel into the workforce to offset

growth and those workers leaving the industry. The Department of Labor Statistics predicts that

the construction industry will experience a 12% increase in employment from 2004-2014.

The short and long term future outlook for the industry remains positive. Globally, all

construction in place in 2000 will double by 2030. In the USA all construction in place in 2000

is projected to double in 2050 with certain regions (North East) increasing slower than others

(South Central) (Fernández-Solís 2007). However, inflation (such as commodities), rising energy

prices, and increased foreign competition have led to cost increases for contractors. Since

economic factors are uncontrollable, a company’s ability to recruit and retain competent,

productive employees is essential to survival. “Clearly, every business is only as good as the

people it brings into the organization” (Carrison, Walsh, 1999). As employers demand

increasingly more from potential employees, locating and attracting new employees that are

dependable, ethical, and loyal remains a top priority. A 2003 study conducted by the National

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Association of Colleges and Employers (NACE) suggested that, before employers interview new

college graduates, they prefer to look within their own internship or coop programs.

Increased demand for labor and professionals has resulted in more universities offering

programs in construction education. In 2007, the Associated Schools of Construction (ASC)

reported a total of 116 accredited construction programs within the United States. Universities

that provide training in construction education remain a significant resource for the recruitment

of interns and entry-level employees. A study conducted by Beard (1998) rated recruitment of

future employees as the top benefit of internships. Training the leaders of tomorrow requires a

substantial commitment from students, faculty, and employers. Internships offer students

practical experience in a controlled environment as they acquire relevant work experience.

Experiential learning involves more than simply learning job skills: socialization and

acculturation into an organization are important developmental challenges that interns encounter

(Tovey, 2001).

Presently, no set industry or academic standards exist for developing or implementing a

coop/internship program. According to Marshall (1999), major internship goals include: a)

provide the opportunity to integrate and apply the knowledge, skills and attitudes developed in

the college or university curriculum; b) provide students an opportunity within an enterprise,

while meeting the organization’s performance standards; c) enable students to refine planning,

communication, and technical abilities in a real world environment while establishing resume

worthy experience; and d) demonstrate professionalism and accountability in meeting all

commitments required of the intern to make consistent contributions to his or her employer.

The implementation of internship programs has increased widely among universities

across the nation. Much literature exists hailing the positive effects of internships. However, few

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studies have been conducted to determine the long-term impact of hiring interns and to assess

their retention as entry-level employees.

1.2 Problem Statement The purpose of this study is to identify and analyze the impact of undergraduate construction

internships on recruitment, training, and retention of entry-level employees in the construction

industry.

1.3 Research Objectives

1. To determine the current trends of internships in construction education.

2. To analyze the impact of undergraduate internships on the recruitment, training and

retention of entry-level employees.

3. To assess the effectiveness of undergraduate internships within the Construction Science

Department at Texas A&M University.

2. RESEARCH METHODOLOGY

2.1 Population and data collection The methodology utilized to collect data for this study was an online survey conducted during

the spring and summer of 2007. The Texas A&M University Institutional Review Board

approved this study. The sample population consisted of 253 Internship Providers of the Texas

A&M University Construction Science Department, each of whom was contacted by phone.

Participation in the study was voluntary and no monetary benefits were distributed for

participating in the study. Participants were emailed the on-line survey as an attachment, and

each participant was allowed to take the survey only one time to prevent multiple submissions

from the same participant. The responses were received in a secure database established at

Surveymonkey.com. The survey consisted of 29 multiple-choice questions, allowing only one

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response per question. Descriptive statistics were used to analyze the data collected from the

online survey responses.

2.2 Demographics

Of the 253 Internship Providers contacted by phone, 111 responses were collected, for a response

rate of 44%. Respondents to the survey represented companies of varying sizes and revenues.

The companies ranged in size from one to over 500 employees, with annual revenues ranging

from one million to over $750 million. Participants represented all sectors of the construction

industry: residential, commercial, heavy, highway, industrial, and specialty contractors.

Respondents reported recruiting interns and entry-level employees from construction programs

that offered internships. Responses were collected from human resource personnel,

superintendents, construction managers, company executives, and owners of companies.

3. DATA ANALYSIS AND RESULTS

3.1. Currents Trends: Internship Providers

The first objective of the survey was to identify companies that recruited interns and entry-level

employees. Company respondents were identified by their size and recruitment methods.

Company size was assessed by the number of employees at the company and average annual

revenue. Questions 2 and 3 were used to analyze this objective. The data revealed that the largest

group of Internship Providers (34.2%) was smaller companies consisting of 1-49 employees. It

can be deduced that smaller construction companies find value in hiring interns as a source of

qualified labor. The top recruiters of interns and entry-level employees reported average annual

revenue of $26-$150 million.

3.1.1 Academic Credits and Duration for Internship

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Question 6 asked participants whether students should receive academic credit for doing an

internship. Overwhelmingly, 99.1% of the respondents reported that students should receive

credit for doing an internship. Question 7 asked participants how many academic credit hours

interns should receive for completing an internship. In order to clarify the basis for one academic

credit hour, responders were informed that 1 credit hour is equivalent to 15 contact hours in a

classroom setting. Overall, 41.3% of respondents reported that interns should receive 3-4 credit

hours for completing an internship, as seen in Figure 1. Question 18 assessed the average

duration of internships at these companies. Of the 79 responders, the average duration of an

internship at their company was between three and four months, with 17.9% reporting the

duration to be between five and six months. The results indicate 3-4 months is an appropriate

duration for an internship, as seen in Figure 2.

3.1.2 Salary Trends

Question 13 was a yes/no response question that asked participants if the Texas A&M University

Construction Science Department should limit the salary of interns. Over half (57.3%) of the

respondents answered “Yes,” the university should limit the salary of interns. Question 14 asked

participants what they thought was an “appropriate” hourly salary for interns: of the respondents,

47.3% reported $10-$13 per hour was an appropriate hourly salary for interns, while 40.9%

reported an appropriate salary of $14-$17 per hour. See Figure 3 for complete results.

3.1.3 Established Training Programs The following questions assess the status of employee training and the importance of continuing

education. Questions 27 and 28 were yes/no response questions that evaluated whether the

company had an established training program set up for interns and full-time employees. As seen

in Figure 4, a majority (50.9%) of responders reported that their company had established

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training programs for interns. As seen in Figure 5, the majority of respondents (74.6%) reported

that their company had established training programs for full time employees. Question 26 asked

participants about the importance of continuing education and training. The survey indicated that

continuing education and training are valued by companies. Question 29 assessed the time frame

in which training was provided. The majority of respondents reported their company provided

monthly training for full time employees.

3.2 Effectiveness of Undergraduate Internship Programs Question 1 assessed the recruitment patterns of these companies at schools that offer

construction programs. Recruitment patterns were limited to undergraduate construction

programs with internships and without internships. Respondents reported that they recruit from

both construction programs that offered internships (44.0%) and from programs that did not offer

internships (3.7%), and a majority from both (with or without an internship program: 52.3%) as

seen in Figure 6. This indicates a preference for recruiting students with internship experiences.

3.2.1 How important is an Internship?

Question 4 measures the importance of internships toward an undergraduate’s education: all

participants responded to the question. Participants were asked to measure “importance” by

selecting one choice from the following categories: “definitely important,” “probably important,”

“undecided,” “probably unimportant,” “definitely unimportant.” The results indicate that 67.6%

of the Internship Providers believed participation in an internship was “definitely important” to

an undergraduates’ construction education, as seen in Figure 7.

3.2.2 Retention Rates for Interns

Question 25 was a yes/no response that asked participants whether job retention is higher

for those that had internship experience versus those that had no internship experience. The

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majority (65.7% of responders) indicated that retention is higher for entry-level employees hired

with past intern experience; 34.3% indicated that retention was not higher for entry-level

employees hired with past internship experience. The survey indicates that companies that hire

interns have higher retention rates (of those interns) than companies that hire candidates with no

internship experience. The results are displayed in Figure 8.

Question 23 asked participants what percentages of interns come to work for their company as

full-time employees upon graduation. The majority of respondents reported that 26-50% of

interns come to work for the company as full time employees upon graduating. The results are

displayed in Figure 8. Question 24 asked participants what percentage of new graduates hired

were still with the company after five years; the results are displayed in Figure 10. Respondents

were undecided on the retention rates of new graduates after 5 years of full time employment.

3.3 Impact of Undergraduate Internships on Recruitment Policies The following three questions investigated whether the internship experience has any effect on

the starting salary and other recruitment policies for entry level employees. Question 21 was a

yes/no response question that asked participants if internship experience was a factor in

determining the starting salary of new graduates. Respondents (68.5%) reported internship

experience is a factor in determining the starting salary of new graduates (See Figure 11).

Question 22 assessed the impact of the internship experience in determining the starting

salary for entry-level graduates. Participants were asked to approximate this impact as a

percentage increase above the average starting salary. The results were rather interesting, with

two categories tied: 32 respondents reported that internship experience has no impact in

determining the starting salary for entry-level graduates and 32 respondents reported internship

experience results in an increase of 3-5% in the starting salary for entry-level graduates.

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Overwhelmingly, 76 out of 108 respondents reported internship experience leads to an increase

in starting salary ranging from 1-7%. The data for this question can be seen in Figure 12.

Respondents were asked if interns are better prepared for entry-level employment over

their non-intern counterparts. Participants selected one answer from the following rating factors:

“strongly agree,” “agree,” “undecided,” “disagree,” “strongly disagree.” All 111 respondents

answered the question. Overwhelmingly, 70.3% of respondents “strongly agreed” that students

who participated in internships were better prepared for entry-level employment than were non-

interns. The results are displayed in Figure 13.

4. SUMMARY & CONCLUSIONS

Internships remain an important tool in the recruitment and training of entry-level employees in

the construction industry. This study sought to provide additional data and insight into the trends,

recruitment, compensation, retention, and training methods applied and conducted by current

construction Internship Providers at Texas A&M University. Participation in internships is

becoming the norm as more companies shift their recruiting focus toward hiring interns. The

study reveals internships to be an important and effective method of recruiting and retaining

qualified entry-level employees. The majority of companies have established training programs

in place for interns and full-time employees. Overall, respondents reported Texas A&M

Construction Science graduates with an internship experience to be productive and prepared for

the work environment. The results of this study indicate that students participating in an

internship are better prepared for entry-level employment than students who have not

participated in an internship. In addition, internship experience results in a higher starting salary

over non-interns. Clearly, successful interns have a greater opportunity to become satisfied

employees. Evaluating the success and job retention rates of interns after five years of full-time

employment would be a significant follow-up study.

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REFERENCE

Beard, D. F. (1998). The status of internships/cooperative education experiences in accounting education, Journal of Accounting Education, 16, 507-516. Carrison, D., Walsh, R. (1999). Business leadership the Marine Corps way. New York, NY: MJF Books. Coco, M. (2000). Internships: A try before you buy arrangement. S.A.M. Advanced Management Journal (Society for Advancement of Management, 65, 41-43.

Fedorko, J. (2006). The intern files: how to get, keep, and make the most of your internship. New York, NY: Simon & Schuster. Fernández-Solís, J. L. 2008, “Is Building Construction Approaching the Threshold of Becoming Unsustainable? A System Theoretic Exploration Towards a Post-Forrester Model for Taming Unsustainable Exponentialoids,” VDM & Co. Saarbruecken, Germany. Accessible at: http://archone.tamu.edu/faculty/jsolis Fernández-Solís, J. L. 2007, “The Exponentialoid of Resource Consumption,” Proceedings, CIB World Building Congress 2007, Cape Town, South Africa, Proceedings CIB-457. Accessible at: http://archone.tamu.edu/faculty/jsolis Marshall, J. A. (1999). Professional internships as a requirement for graduation. Journal of Industrial Technology, 15, 2-8. Tovey, J. (2001). Building connections between industry and university: Implementing an internship program at a regional university. Technical Communication Quarterly, 10, 225-239. United States Department of Labor Statistics. (n.d.). Industry at a glance: NAICS 23: Construction. Retrieved 22 June 2007, from http://www.bls.gov/oco/cg/cgs003.htm Bohne, N. (2007). The impacts of undergraduate construction internships on recruitment, training, and retention of entry-level employees of the construction industry. Unpublished Professional Paper. Texas A&M University

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Figure 1. Credit Hours for an Internship

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Figure 2. Internship-Durations

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Figure 3. Hourly salary of interns

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Figure 4. Established training program for interns?

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Figure 5. Established training program for full time employees?

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Figure 6. Internships-Does it matter?

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Figure 7. Internships as a part of construction education

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Figure 8. Effect of internship on retention of new employees

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Figure 9. Percentage of interns joining the company back upon graduation

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Figure 10. Retention after 5 years of employment

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Figure 11. Internships and starting salaries of graduates

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Figure12. Internship-Impact on starting salaries

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Figure 13. Internship and its impacts on performance