Electrical Manager Shortages Solved with the NECA Apprenticeship Model with Nelson and Anna

Very good, Jeff. Thanks for having me on. Hope things are well on your end as well.

Sure. Sure, Jeff. And both Jeff and Anna, great to be here today and to participate. It's a really important topic for us and for the industry. A little bit about myself. I'm based in Pittsburgh, Pennsylvania, which is the home of Wesco. I would tell you on a related note, the most important subject that's being discussed in Pittsburgh these days is who's going to be the starting quarterback for the Steelers next year. And so that's the hot topic right now. Despite everything else going on in the world, we still don't know what that answer is yet. But more about myself. I've been in the industry about 10 years and what I'll tell you is it has definitely changed dramatically over those 10 years. And I'm sure we'll get into that and really making even more important and more obvious why we need to have the different kinds of partnerships that are out there today and where everyone in the industry needs to have a part of working on future workforce. You know, how we take care of where the world's going from an electrification standpoint, etc. My day job is I'm the executive VP and general manager for our electrical and electronic solutions business, or EES for short. We have three major businesses at Wesco. The one that I'm responsible for is a global responsibility. So we have operations in over 50 countries and about 7,000 people in the organization that come to work every day to take care of our customers. Prior to that I was in the chemical industry for 25 years and while different industries going from chemical to electrical distribution, a lot of similar long-term workforce challenges. So, a lot of things that I've worked on over the last 20 years are very relevant and relatable to what we're trying to do at Wesco. Maybe to just give you a little bit more about the business that I'm responsible for, again the electrical portion of the company. We are really at the crossroads, at the epicenter of all the work that's going on not just to electrify but to decarbonize and to help the world get more power to where it's needed. And so before I go a little deeper, maybe tell you about the rest of the company because it's relevant. We have three segments as I describe mine, one called CSS which is communications and security solutions. They're really hyper-focused on security, wireless data communications, etc., and a very large footprint in data centers. Data centers are, you know, everyone's talking about data centers, the demand. A recent announcement in Pennsylvania around a $10 billion investment going in, right in our home state, but these are happening everywhere. And our utility business is really working with all investor-owned utilities, public utilities, etc., making sure that we are providing services and solutions. But enormous investment going on in that space to basically get the power to where it's needed. Statistics like the data centers are using 4 to 5% of overall usage of electricity in the US and that's going to more than double before the end of the decade. So that business is really helping those customers enable that. So back to our business, we are not just a supplier of SKUs or parts, etc. Obviously, it's a big part of what we do, but we're involved in multiple aspects and actually have this as a day-to-day offering on how we go to market. So, starting with project management services. Executing projects and our parts and what we build and the supply and services that we have are really focused on what I call larger construction projects. So think office buildings, hospitals, universities, so on so forth. Infrastructure projects, a lot of work over the last couple of years with the number of battery plants that are being built to build the batteries that are going into the EV chargers. And so we have significant responsibility and capability around that materials management, project deployment services. A big part of what we do is safety related. And I bring that up because one of the things that we're trying to provide to the industry is a one-stop solution for these needs which are changing all the time. They're going to continue to change with the changes that have occurred in Washington DC over the last 90 days. But suffice to say we know a couple things. One is demand is only rising and there's secular demand creation coming with all of this electrical infrastructure that's required, these new sources of energy that need to go into data centers. We've read about 3M island and Harrisburg being restarted, gas turbine plants or gas plants being started back up. We can and want to provide help to our customers along that entire journey from project development through sourcing, through execution, and our goal is to stay with these customers long term to provide MRO services, support, training, etc. And then layering over the whole thing, I would talk about safety as well. So, it's an extremely important business to be in. We have a lot of people, not a lot of new people entering the industry. And our goal is to make sure that when people are at work, whether it's at Wesco or at our customer or anyone that we interface with, we want them to be safer at work than they are outside of work because we've got good policies, good training, and we're holding people accountable. And I think that's a critical piece of this going forward. We are bringing newer people into the industry. We've got to do it safely. We've got to do the right level of training. So, hopefully that gives you a little bit of who we are and what we're doing. And the last comment I'd make is it is a super exciting time to be in the electrical industry. Whether you're NA, Electric, all the other organizations and all of us, my competitors, the suppliers that supply the industry, our customers. Because we used to be looked at a little bit like a sleepy industry. This is an industry where people want to go today because we really are at the forefront and part of the cornerstone of what the world's going to look like over the next 0 to 30 years. So a very exciting time to be in the industry.

Those numbers are crazy. They really are. And they're real. Part of it is just simply that a generation is aging out. The baby boomers are aging out and I happen to be one of them. So I understand that directly. A lot of us are walking around with a lot of knowledge and a lot of capability. And then you couple that with the demand increasing, which is because of where electrification is going. We both mentioned a bunch of end markets but also semiconductor companies making massive investments. So as we kind of look at this as a company, we've said how do we get involved? How can we help? And what we've done is through our program called Wesco Cares. It is our philanthropic program that is out there to ensure a presence in the markets that we operate in. This means for us everything from donating money to good causes, sponsoring activities. We're heavily involved in Habitat for Humanity, etc. We've got employees who we give paid time off to go help build homes. It's for a couple reasons. It is about giving back. We want our employees to be active in the communities that they live in and really help to represent the company. So that's kind of cool. It's fun. It's exciting to be able to do these things, but it's not enough. One of the things that we discussed as a leadership team was how do we get even further involved? So one of the things that we looked at was essentially this demand for more people to move in the electrical space. And as Anna said, that's everything from people in the field, it's project leadership and administration. It's back office. It's all those things. We've just got to get more people involved in the industry. And so we decided that we were going to fund scholarships and make a multi-year commitment to be able to do that. Partnering with Electri, partnering with NA, to really help people get into this as a vocation. Because you got to start somewhere. This has been very successful. We're really only in our second year and we're committed. We're going to stay the course for this because we see the importance of it. What we like to do, we talk about this with our suppliers, with our customers, in general, is, and I said this a few minutes ago, it's a great industry to be a part of. We're all wondering about AI. We learn more every day about AI. AI is not going to replace this. AI will help make it more efficient and more effective, but we need the people. We need the people to come into this market. You read these stories now about people that go to school, they go to college, they graduate with an enormous amount of debt that they have to take decades to pay off. You can get into this industry and make a handsome salary very soon in your career, while you're still in your early 20s, and have longevity because of this demand. So our goal is just to help stimulate that by providing scholarship money. I say this every time, Jeff, I'll say it again. Anyone that touches the electrical space should be trying to do something to help here. Whether you can help from an apprenticeship standpoint, just hiring people, whether you can donate money, whether you can create foundational support for this, it's extremely important that we work on every avenue here to make sure people understand what an attractive industry it is, what a great place to work and make a living, and get more people in there. So, we're trying to do our small part to make that happen.

Jeff, it's a great question. I want to kind of quickly look back and then look forward and emphasize something that you said that learning that skill, you're always going to be able to find work. An apprentice program like what Electric has set up, pretty much every industry is trying to model something very similar. Pairing a senior person with a junior person. I think all of us who have been around and learned, it's a lot easier to learn that way than reading a book. That's going to be a part of it. Obviously in the electrical world, there's certifications and things like that, but getting out and watching it get done is going to bring people up to speed faster. So, looking back, we had what I would call secular trends that were not like they are today. Meaning the electrical industry kind of moved with GDP, it moved with investment, etc. We now have secular trends that are with us and they're going to stay with us. Regardless of who's running the country or who's wherever, the demand is going to surpass all of that consternation, all that concern. And we're seeing it every day. So as we look forward, what we're trying to do is leverage our scale and capability to help bring in people. We just want more people to get into this industry, regardless of where they go to work, frankly, because it's going to help everybody out. I'll state it very succinctly. Labor is going to be the issue that prevents activity from happening. It is the number one constraint. And when you put the electrical industry involved, it's skilled labor. So it's not just somebody that can work in a warehouse or drive a truck. There is an upskilling that's needed. The biggest takeaway for us is this is not going to change in a year or two. This is going to be a multi-decade challenge. The other piece is while we've talked about baby boomers and people aging out, the succeeding generations have fewer in the population, so the pool to draw from is actually shrinking. People just having less offspring than 40 or 50 years ago. So it's going to be even more important for us to be all aligned, all dedicated, and look past the competitive environment that we operate in and say it's going to be better for everyone regardless of where you fit. Whether it's foundations doing great work like Electric and NA and others like NAED and NEMA, how can we better work together as an organization all-in to solve these problems? Because we've all got them and the strength of us pulling together and trying to figure that out is going to be much better and much more impactful than if we just each try to solve it on our own.