ARLINGTON, Va. — Grabbing new employees off the street isn’t working for America’s largest military shipbuilder with HII now looking for more experienced workers, even if that comes at a premium, CEO Chris Kastner told reporters on Wednesday.
Following the workforce exodus from shipyards in parallel with the COVID-19 pandemic, the U.S.’s private yards made a massive push to hire younger workers to replace older workers who left the business early. However, more than half of those new workers, especially ones who came directly to the yard with no formal training, have been leaving before their first year concludes, the Navy’s acting chief acquisition civilian told the House Armed Services Committee last week.
“Those folks are coming, and then we’re attriting out way too quick. We probably are seeing 50 to 60 percent attrition in our first-year employees,” Brett Seidle said.
The top reason, Seidle told the HASC, was a lack of competitive wages for entry-level employees compared to less strenuous jobs. Through the nonprofit BlueForge Alliance, the Navy has invested about $100 million in advertising shipbuilding jobs at NASCAR races and Major League Baseball games. The effort netted about 9,700 across the Navy’s shipyards and suppliers, Seidle told USNI News. When asked by USNI News, the Navy did not have the attrition number of that total.
Kastner declined to specify the attrition rate at HII’s Newport News Shipbuilding in Virginia and Ingalls Shipbuilding in Mississippi other than to say it has been “very, very high” for new shipbuilders.
“What we’re finding is you don’t grow [the workforce] by hiring them off the street. You have to grow them through the regional workforce development centers. You have to grow them to the apprentice school. We have to grow them to the community colleges. You have to grow them in the high schools and establish programs,” Kastner said.
“People through the pipeline tend to stay more because they chose it as a career. They understand how hard it is, but they just didn’t apply and show up and think they could go and be a shipbuilder.”
Now, HII is focusing on hiring more experienced workers to join their shipyard who command higher wages. Kastner told reporters HII hires about 6,000 workers a year.
“We’re repositioning our hiring programs to hire less entry-level people, get more experienced people, which means you’re going to hire less and you’re going to have to figure out how to get the work done,” Kastner said.
HII and submarine builder General Dynamics Electric Boat are awaiting construction contracts for the last two Block V Virginia-class attack boats that were appr. Those contracts include extra money for wages as part of an increase in funds contained in the last Continuing Resolution.
The funds “allow the Navy to cover fact-of-life cost increases on the two FY 24 boats and one FY 25 boat. They also provide funds for additional workforce development and allow us to target funding at specific productivity areas that we are working at with our customer,” General Dynamics CEO Phebe Novakovic said in a Jan. 29 earnings call.
“We are working with our customer to get this under contract as soon as possible.”
Cost increases for the two FY 2024 boats – Baltimore SSN-812 and Atlanta SSN-813 – are mostly due to an increase in labor costs. Congress appropriated $9.4 billion for the two boats in Fiscal Year 2024 and the stop-gap bill added an additional $1.95 billion.
“The FY 24 two-boat contract that we’ve been working on with the Navy is important, Kastner said Wednesday.
“That [contract] contains significant investments, which will enable improved submarine production.”
