The Skilled Trade Shortage and What You Can Do to Recruit Labor

October 2018

 

by Mike Brewer, Brewer Companies, and Todd Sanders, Greater Phoenix Chamber of Commerce

The state of Arizona and our country are at a turning point. Our economies are growing, but our infrastructure is degrading and our ability to keep up with the pace of our growth is slowing. It’s time to face facts. When it comes to infrastructure, the United States is practically failing.

According to the American Society of Civil Engineers, the country’s overall grade for infrastructure is a D.

In fact, 9.1 percent of bridges in the country are structurally deficient. When these bridges fail, they are increasingly expensive to replace. Every year, traffic delays cost $160 billion in wasted time and fuel. Transit, a key to reducing traffic, is struggling to expand despite efforts from cities and towns. It’s not just transit that needs to expand to meet demand—it’s also airports. We’ve all seen the impressive growth and modernization happening at Phoenix Sky Harbor International Airport. In their most recent report, the ASCE stated that soon the majority of airports will experience holiday-like congestion on a weekly basis.

If the economy is growing and businesses are growing, then why is our infrastructure still a decade or more behind? Simple. Our community lacks the talent needed to fill critical construction and skilled-trade positions.

In Arizona, there are more than 10,000 vacant construction trade positions. In a 2016 HomeAdvisor survey, 93 percent of industry respondents said the labor shortage is preventing their businesses from growing over the next year.

This struggle to find qualified employees has real economic consequences for not only construction firms, but their customers and vendors as well. Talent gaps limit a state’s ability to grow—delaying key projects means slower economic growth.

If we expect our city, our region and our country to continue to thrive, then we need to work together—the business community, education institutions and others—to encourage individuals to launch their construction careers and learn a trade skill that will help build the foundation for our continued economic growth.

The construction industry in Arizona is working together to combat the stigma around construction jobs and highlight what a career in construction looks like in 2018. Through a collaborative process, we are bringing the business community, educators and government together to develop a multi-pronged solution to Arizona’s construction trade workforce crisis.

Construction Is More Than a Job

It’s time to showcase what a career in construction looks like in the 21st century. Stacks of neatly rolled up blue prints have been replaced with tablets loaded with digital blueprints. Aerial vehicles and drones are conducting site surveys. And sustainable building and LEED certification are driving the future of design and construction. All of these changes have not only created new roles for the construction industry, they are also changing the way traditional construction jobs are performed.

One of the main reasons these skilled-trade careers are vacant is because the construction industry isn’t discussed as a viable pathway for people of all career aspirations. Arizona has more than 10,000 empty positions, waiting for someone willing to learn a skill and build a career.

Today, construction career pathways possess all the qualities that most people look for when searching for meaningful employment: high starting pay, on-the-job training, benefits, job availability and growth potential.

It’s time to dispel the perception that construction jobs aren’t careers. Construction is not only a viable career pathway, it provides a multitude of opportunities to suit all interests.

Many positions in construction require highly skilled people who are highly compensated, given that their specialized skills are in high demand. To put it succinctly, many of today’s construction industry employees are highly sought after community contributors. And that’s how we should be talking about them.

For too long our society has downgraded the value and importance that skilled-trade workers play in our economic future. These vital careers deserve respect and to be highlighted as solid career pathways for any individual.

Appealing to the Masses

We need to band together to target potential talent for this industry—but it goes beyond that.

In an Associated General Contractors of America survey, 86 percent of contractors reported they were struggling to fill hourly craft jobs or salaried professional positions. Why? Because people aren’t entering the construction industry at the same rate they had in the past.

According to Go Build America, for every five people who retire from the trades, only one replacement is being trained in apprenticeship programs. On average, tradespeople in the industry are 47 years old. And only 10 percent of the workforce is female.

A key challenge to filling Arizona’s 10,000-plus empty construction positions is reaching out to potential talent—students interest in vocational education, women and individuals stuck in a job with no progression that are looking to start a career with growth potential and opportunities to earn while they learn.

An entry-level construction job can lead to a fruitful career. More importantly, the average wage for construction trades is $49,000 per year, which is higher than Arizona’s average salary across all industries. Construction jobs represent more than just a wage, they represent opportunity. What’s more impressive is that nine out of 10 individuals who complete an apprenticeship program are employed.

In fact, many construction jobs only require minimal training and certifications. For those with the desire to grow their career, there is plenty of opportunity. Through additional certificates and four-year degree programs, many transition from hands-on work to leading an entire construction site with formal project management training.

It’s not just students and potentials workers we have to convince—it’s their families as well.

It is no secret that construction careers are not necessarily attractive, nor are they viewed as viable lifelong career options. If you ask parents if they would encourage their children to explore a career in this industry, they would most likely respond with a resounding “no!” We must educate everyone—students, parents, teachers and counselors—that these jobs can lead to a successful and fulfilling career for anyone.

Increasing Pathways to Quality Training Programs

We must ensure that individuals interested in a construction career have easy and accessible exposure to the industry and to training opportunities.

In an effort to better align training opportunities with employers’ needs, the Greater Phoenix Chamber Foundation has gathered leading construction companies to address their talent needs differently, through a collective approach. The Construction Workforce Collaborative is applying the U.S. Chamber of Commerce Foundation’s Talent Pipeline Management model to look at the issue from a supply chain perspective to craft a data-driven solution.

Through this collaborative approach, employers are leading the conversation and connecting with education institutions.

Whether it’s Joint Technical Education Districts or community college trades programs, there are numerous well-developed training programs for prospective tradesmen and tradeswomen. And businesses are working with these institutions to attract individuals—especially high school students and graduates—to these training opportunities.

Unfortunately, several of these training programs lack the students and resources to train future construction and trade-skills people at the level needed. We need to ensure our schools, especially those specializing in career and technical education, have a solid pipeline of students and the appropriate resources—such as equipment and teachers—to educate and train students interested in construction trade careers.

If we are to move our economy forward, the business community needs to work to promote these education and training opportunities in the construction industry at all levels.

So, What’s the Message?

It all comes down to what those of us in the industry already know—construction jobs are more plentiful, profitable, respectable and safer than ever. These careers are building our cities and growing our economies. The construction industry is not a “last resort.” It is a career path built on the values of hard work, pride and honor.

Yes, these jobs are hard. You will get your hands dirty. But even in year one, you will earn a wage that will allow you to support yourself and your family. This is a career path that not only will allow you to avoid student debt, but will give you the opportunity to earn while you learn.

We Are Building Arizona Together

With a multi-faceted approach, business leaders can work with community members to build Arizona’s construction and skilled trades workforce. By changing the conversation, targeting key talent opportunities and bridging the gap between employers’ needs and training opportunities, we can create the workforce needed to sustain our economic growth. It won’t happen overnight, but anything worth building takes time. If we start today, we can ensure a sustainable talent pipeline for our construction companies and ensure Arizona’s uninhibited economic growth.

It can happen in your community, too. I urge construction leaders in other areas to engage with a convening organization, such as your chamber of commerce, to bring together industry leaders, education partners and elected officials to begin solving complex issues. If the message and the goal are to come together for the greater good of the community, then leaders will be eager to engage.

Our leaders in Phoenix are willing to serve as thought leaders and mentors to anyone seeking to implement similar initiatives in their communities. We encourage you to connect with us and allow us to help strengthen your communities as well.

Let’s work together. Let’s build on our region’s success. Let’s be the place where people and companies want to do business.

Mike Brewer is the CEO of the ASA-member company, Brewer Companies & Benjamin Franklin Plumbing, Phoenix, Ariz. Todd Sanders is the president and CEO of the Greater Phoenix Chamber of Commerce.

 

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The Evolution of the ‘Talent Director’ in Today’s Construction Organizations

October 2018

 

by Gregg M. Schoppman, FMI

Consider how time has evolved certain roles within organizations. For instance, 40 years ago, firms staffing full-time safety professionals to lead and support their endeavors in the life safety arena. Today, that same role continues to evolve with the incorporation of risk management as an overarching theme. Similarly, information technology’s warp speed and trajectory has rapidly morphed a position that was often relegated to the margins of simply maintaining hardware to that of a c-suite position that often compliments the financial roles, risk management roles and business development roles handling everything from the website and social media to data security. Organizations continue to evolve and incorporate new roles that arise from the demand of the marketplace. Human resources associates evoke images of a stodgy paper pusher that either helps process required paperwork during hiring or shows up on that fateful last day of employment. This is no longer enough in today’s firms to drive proactive and leading strategies. Enter the “Talent Director.”

Lights

An essential element of every firm’s strategic plan should involve cultivating human capital in some form or fashion. With the prevalence of issues surrounding the industry and the perceived inability to “find good people,” it would grossly negligent to forget a series of actions around finding and/or retaining talent. More importantly, every firm should examine every aspect of their human resources plan. For instance, Figure 1 illustrates the life cycle associated with growing people internally.

Fig. 1

 

Whether it relates to the firm’s image among the candidate pool or how managers, supervisors, and associates are continually developed long into their career, it quickly becomes apparent how vast and complicated this component of a strategic plan becomes. Unfortunately, too often, the “circles” become side projects of other roles within an organization. As with many side projects, aspirational goals on planning day become relegated to distractions to “real work” like project management and finances leading to procrastination or neglect. While it is hardly gross insubordination, growing and managing the talent development aspect of a firm could largely be compared to that of growing a safety program or managing IT as a part time job.

Camera

When compared to corollary positions in firms, this does not mean the Talent Director becomes the owner, manager and sole practitioner of all things “People.” Just as safety is everyone “job,” everyone owns an aspect of the People Goal, but the Talent Director is the champion or custodian. They serve as the manager to drive this mission critical initiative and live “People” on a daily basis. They provide the cadence to which the organization marches relative to specific items within the People World:

  • Organizational Recruiting—Whether they actively participate in college or high school recruiting or delegate specific team members to participate (i.e. alumni relations), they quarterback the process to maintain routine contact rather than simply show up only when there is an employment need
  • Personnel Development Plans—Working with managers and associates to tie organizational goals (future management needs) with real-time personnel development and training targets.
  • Training— Rather than create a “blanket” training program, the Talent Director identifies internal needs that not only shore up internal deficiencies but provides real education on new trends and thought leadership within the industry.
  • Internal Universities—Acting as “The Dean,” the Talent Director creates the curriculum, identifies the subject matter experts (internal or external) and most importantly creates accountability to drive adherence to training and education.

Talent development is not just for the mega-organizations. While establishing a full-service university sounds like a daunting task—especially when led by a project manager or superintendent as a side project—consider the benefit of any well-defined, structured training program that is tied to a firm’s strategy and long-term well-being.

Build

There are many organizations that are managing the business from the sidelines, determining the long-term efficacy of such a position. Will this work for us? Is the talent issue facing the construction industry a short term blip or is this just the tip of the iceberg? How will we pay for it? First, it is important to push the climatic issue of “talent shortages” to the side for a moment. As a leader in the firm, ask yourself what type of firm you want to lead. Do you want to be a talent for the best or always be an afterthought getting the mediocre? Leading organizations not only state in their vision, mission and core values their dedication to talent but drive real action to achieve in this area. As a result, they are not reactionary pawns to macro-level forces.

It is also important to recognize the need for empowerment. So many firms are well-intentioned when it comes to training and associate development, only to have real life get in the way in the form of projects. How often does a training get “punted” because of a challenging project or performance appraisals delayed because of that same challenging project? Similar to safety leadership, the talent director must have cache. If it is not viewed as a true partner to operations, estimating and finance, associates will not only discount the validity and relevance but subvert the intent of the strategic initiative.

The construction industry continues to grapple with the ever-changing environment. As discussions continue to leverage technology more and more, the human element remains the one constant in all organizations. Those firm that take an active role in owning and directing the talent development process will certainly surpass those firms that merely dabble from stage left.

As a principal with FMI, Tampa, Fla., Gregg Schoppman specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. Prior to joining FMI, Schoppman served as a senior project manager for a general contracting firm in central Florida. He has completed complex and sophisticated construction projects in the medical, pharmaceutical, office, heavy civil, industrial, manufacturing, and multi-family markets. He has also worked as a construction manager and managed direct labor. Furthermore, Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets. He can be reached at (813) 636-1259 or gschoppman@fminet.com.

 

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How Your Culture Can Impact Safety and Project Delivery—and Ultimately, Your Bottom Line

October 2018

 

by Kiersten Rippeteau, CODP, Palmer Consulting Group

In the construction industry, safety scores and project delivery are often our measures of success. When ratings are high in these areas, lenders trust the business to perform, employees trust the business to take care of them, and owners have a positive experience and are likely to return. In short, safety and project delivery are two of the strongest influencers on your bottom line.

You’ve probably been through training programs, organizational change programs, or communications campaigns as part of efforts to improve safety and project delivery. Each of these tools has its place, but what does it take to actually realize these improvements? Is there a silver bullet? If you define “silver bullet” as an easy fix that doesn’t take much time or effort, then no. But if you define “silver bullet” as the one thing that, with commitment and hard work, will have the highest level of long-term impact, then yes—absolutely. And in this case, that one thing is culture.

Tools like training or change programs and communications often don’t take into consideration the culture in which they are implemented. A training program will have limited impact in an organization that doesn’t truly embrace a training mentality. Organizational change methods will only go so far if leadership doesn’t support and embrace the change itself. When employees see a clear disconnect between words and actions, communications fall on deaf ears. It takes sustained and consistent behavior from each individual in your organization to realize the benefits of these tools. And what drives behavior? You guessed it—culture.

So let’s talk about how your culture can impact safety and project delivery—and ultimately, your bottom line.

In this article, we’ll explore two of your business’s operational levers that can be pulled to influence and shift your culture for increased safety and project delivery successes: Structure and Skills and Abilities.

Culture’s Impact on Safety

We know what safety behaviors look like, but how are leaders impacting safety behaviors on job sites when the training is over and carrying out the behaviors matters most? Research published in Safety Science in 2016 tells us that—perhaps more so than safety training itself—management and senior leadership behaviors are keys to developing safe work behaviors on construction sites. Author Jitwasinkul and his colleagues found that when frontline supervisors are seen as “open, approachable, accessible, and helpful, soliciting and following up on workers’ suggestions,” safety behaviors will increase.

The question for leaders, then, is what levers can we pull to create a culture that allows our frontline supervisors to be “open, approachable, and accessible?”

Shifting Your Leadership Culture

For safety, let’s look at the structure lever. If perceived approachability of frontline supervisors dictates safety behaviors, then organizational structure matters. Let’s say your senior leadership team has set the expectation that frontline supervisors are “open, approachable, and accessible” to their people to increase jobsite safety behaviors. Here are some questions you might ask about your structure:

  • Is the job of a frontline supervisor designed to allow time to be accessible?
  • Are rewards in place for them to be open to safety concerns from their people, or do current rewards actually incentivize them to ignore safety concerns?
  • Are there too many layers between senior leadership and frontline supervisors to effectively communicate new expectations? If so, how might that change or what communication channels could be put in place?

The structure lever can also impact the level of influence and empowerment your employees have, improving the ability of frontline supervisors to follow up on suggestions.

  • Is there role clarity so that people know who they should go to if they have a safety concern?
  • Does the current reward system create incentive or disincentive for team members to address safety concerns?
  • Do business processes make it easy and timely for senior leadership to act on safety feedback when they receive it?

As you assess your structure and are able to either affirm it or make changes, you inevitably start to shape your culture. By pulling the structure lever, you can create a culture of “open, approachable, and accessible” leadership that will in turn drive safety behaviors.

Culture’s Impact on Project Delivery

In 2015, researchers Loosemore and Lim published a study showing that perceived fairness plays a role in how well people collaborate along the project delivery supply chain. As you can likely attest to, when people collaborate well, jobs are more likely to be completed on time, on budget, and with the expected quality. So how can your organization influence perceived fairness to those you need to collaborate with along the project delivery chain? Pull on the skills and abilities lever.

(Let’s clarify that by “fairness” we are not talking about making all players along the project delivery chain happy all the time. Most people understand that some situations will not go their way. They are far more likely to take those situations in stride if they feel they’ve been part of a collaborative process.)

Shifting Your Collaboration Culture

The best way to influence perceived fairness to those you need to collaborate with is to ensure the people in your organization managing relationships along the project delivery chain are able to be goal-focused, facilitate tasks, and—quite simply—to be considerate. Equip your people with these abilities, set expectations that they are put to use every day, and your culture will do the work for you. Senior leadership doesn’t need to micromanage the field or play relationship referee if you can rely on the fact that your people’s behaviors are consistently aligned with the way you do business.

Here are some questions you might ask about whether your organization is equipping your people with the skills and abilities to support perceived fairness and drive collaboration across the project delivery chain:

  • Is there one clear goal that applies to all projects? Establishing one clear goal for all projects makes decision-making and prioritizing straight-forward for your people in the field. It creates consistency and transparency, and reduces “emotional decisions” that might get made in the face of tension or conflict. Consistent, transparent, logic-based decisions guided by a single goal go a long way in establishing trust and increasing perceived fairness.
  • Have you developed your people in the field to be problem-solvers and process improvers? These two skills enable your people to facilitate tasks; to ensure the task at hand is getting done as effectively and efficiently as possible. The investment in these skills will pay dividends in successful project delivery.
  • Have you enabled your people in the field to be considerate? The truth is, most people are considerate by nature. Unfortunately, some organizations create expectations counter to being considerate (e.g., “winning,” maintaining power at all costs, and so on). These expectations create behaviors that break down trust and eventually have a negative impact on project delivery outcomes. Make sure your organization is setting expectations that allow your people to be considerate team players along the project delivery chain, and you are more likely to influence collaboration and improve project delivery.

You Can See Culture

You’ve likely heard phrases like, “Culture is elusive” or “You can’t see culture.” However, culture is seen in budgets and in organizational charts; where the organization invests its time and resources. Culture is seen in employees’ and leaders’ actions; how their environment motivates them to behave and how they treat partners and vendors. Because you can see it, you can improve it. Make the effort to pull on these or other operational levers that can improve your culture, and see what dividends it pays for you and your people.

Kiersten Rippeteau, CODP, is an OD Business Consultant for Palmer Consulting Group’s Organizational Strategy Group (Palmer OSG). Rippeteau specializes in Organization Design, Organization Development, and Culture for the Construction industry. You can learn more at PalmerOSG.com or contact Rippeteau at kiersten.rippeteau@palmerosg.com.

 

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The Disaster Artist—An Examination of What Drives Failing Businesses at Their Peak

October 2018

 

by Gregg M. Schoppman, FMI

Revenues are blooming, and times are swell for many construction organizations. What could possibly go wrong? Many leaders believe that the most challenging aspect that many firms face is the availability of personnel. However, this movie has played several times before and the conclusion is always the same. Undisciplined management and a complete lack of good strategy leads to failure. In 2007, FMI released a ground-breaking study titled “Why Contractors Fail.” The study was the deep examination of over 30-plus large E&C firms that failed to search for the root causes. While each of the participants had their own reasoning for failure, the major “buckets” could be summarized in three key areas:

  • Strategic—Unrealistic growth, volume obsession, etc.
  • Organizational—Poor cash flow, operational inefficiencies, legal, etc.
  • Uncontrollable—Banking/bonding issues, economic conditions, etc.

The fixation with the last item remains a curiosity. For example, many leaders view this item as the primary cause for failure when in fact the first two items—strategy and organizational performance—were the leading cause of failure and these supposed “uncontrollable” were simple exacerbating factors. Put another way, it is always easier to blame the economy than it is poor leadership.

Yet, here we go again. Contractors are once again seeing record highs in many categories, both good and bad. With strong revenue comes increased risk due to higher receivables, demand for cash and time. Firms should take stock in their current position and use this internal inventory to benchmark against not only the superior firms but also reference their own risk profile.

Talent

How often have leaders said, “If we only had more people, we could do X percent more …” In fact, the talent crunch has served as a de facto governor for some firms, allowing them to live within their means. However, it often becomes hard to say no when saying yes to customers feels so good. And thus, the cycle begins. Firms acquire more work and end up shelving their strategic plan on growth and people development in favor of engaging new talent and unproven entities. For instance, Figure 1 is a snapshot of what happens during this process:

Fig. 1

Revenue growth is not a bad thing. In fact, this engine for growth—when done correctly—is a good thing for the firm and helps the business to growth. As the study indicated, it is the lack of discipline that leads to very reactionary behavior. Of course, the contrarian argument is “How do you say no to a customer?” There is no easy way to say no—whether it is providing a “healthy price tag” or simply being honest with a customer on —but the corollary of failing to execute will often have graver consequences.

The Playbook

Leaders talk about training and development, but this is less about sitting in classroom and more about having a script that the team utilizes to execute. The aforementioned free agents are great in many cases because they bring a new breath of air to the organization. However, they also bring in a new set of behaviors and they can also be challenging to break. In the absence of an operational model, free agents will default to their old ways, good or bad. More importantly, without accountability to a firmwide standard, it is easy to rack up losses through poor efficiencies, weak change order management and an overall lack of proactiveness.

This does not mean that firms shouldn’t train. Rather, it means training should be focused to reinforce the right behaviors within the firm. Training and development should never stop, even when firms are busy. In fact, waiting for slow times sounds counterproductive and once again, reactionary.

It’s All About the Money

Cash specifically. Cash is king—that is usually a mantra that is pounded into leaders from surety, banks, financiers, experts, consultants, etc. The drum beat is loud and should resonate clearly but the influx of volume often distorts the view. Working capital should be an element to every leaders’ dashboard but it is often relegated to the margins as the obsession with volume and profitability dominates the landscape. Profitability is extremely vital but without cash the building becomes a house of cards sitting on quicksand. Firms find themselves sideways as they overextend into their line of credit, loosely manage collections and also see write-downs resulting from poor operational performance. The downward spiral begins to look like the degenerate gambler sitting at the roulette table hoping to see that little ball land on their number.

There will also way be economic cycles that will cull out the wheat from the chaff. However, it is ignorant and misguided to blame everything on the external environment. There were countless firms that defied conventional wisdom and thrived during the years of recession. Whether they became lean, mean and efficient or simply had a better strategy, many firms were more profitable during these times of posterity than when volume flowed like a fine wine. Strategy and operational performance should be married and most importantly, there should exist a discipline and commitment to avoid the disaster trap. More importantly, it is no fun being a statistic in a case study.

As a principal with FMI, Tampa, Fla., Gregg Schoppman specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. Prior to joining FMI, Schoppman served as a senior project manager for a general contracting firm in central Florida. He has completed complex and sophisticated construction projects in the medical, pharmaceutical, office, heavy civil, industrial, manufacturing, and multi-family markets. He has also worked as a construction manager and managed direct labor. Furthermore, Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets. He can be reached at (813) 636-1259 or gschoppman@fminet.com.

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‘But Can They Fog a Mirror?’ A Strategic Approach to Recruiting Top Tier Talent

October 2018

 

by Gregg Schoppman, FMI

Hiring talented individuals has become the latest in a long line on routine challenges for many business leaders. “We just can’t seem to find great people …” Whether it is exhausting the new channels of social media or tapping the old relationships in the recruiting world, firms have made it a full-time job to increase the capacity in their personnel pipelines. Too often, the pull of “just in time” labor seems to take precedence, short circuiting the need for process discipline and strict adherence to higher standards. The cost impact of a poor hire can be felt in many forms:

  • Cost overruns—Labor inefficiencies, rework, cost mismanagement, lost change orders, poor collections, no billings, etc.
  • Customer impact—Customer attrition, customer mismanagement, personality conflicts.
  • Cultural misfit—Internal friction, morale depletion.
  • Lost expenses—Training costs, “learning costs” (routine mistakes that a newer associate might make the first time).

In the end, hiring a manager that fails to make the cut can result in costs that may be double to quadruple the simple sunk costs of that person’s salary. This should enough to scare anyone to avoid hiring anyone, but the reality is that bringing on new assets is essential to every business. While hiring is only one step in the human capital cycle, it serves as a gate mechanism and should be approached with diligence and discipline.

Personnel Strategy

It is imperative that a firm answer its own personnel strategy. For instance, what is its approach to human capital? For instance, does the firm approach its talent needs through a greenfield, farm system model replete with rookies or does it tend to source personnel with industry free agents. Many firms most likely use an amalgam of these to supplement their ranks. While sourcing hardly appears to be a major cruxt, it will affect the overall approach to which a firm then develops its talent. For instance, the training and development program that a firm should institute for seasoned free agents should be drastically different than one for rookies. Figure 1 is a simple illustration detailing the potential curriculum of each group:

Fig. 1

The main theme in the second column is the inculcation of this talented group into the firm’s philosophy and culture. While their building construction skills are commensurate with their industry tenure, there are more ingrained behaviors that need modification.

The other element to examine is the connective tissue between the firm’s corporate values and those of the individual. There are plenty of firm’s that simply adorn their office with placards espousing values but that is where those values end. Firms would be better suited to ensure alignment in their hiring models. For instance, Figure 2 depicts a scenario that demonstrates a stricter alignment:

Fig. 2

Most of the elements are intuitive. There are probably few examples of firms that seek out someone who is dishonest. The challenge comes when evaluating a talented candidate to ensure alignment. How does a firm hire for honesty, short of connecting a candidate to a polygraph? One avenue to explore is the deeper use of questions that are focused on areas specific to core competencies. Rather than the perfunctory “Tell me about your work history …,” questions dial into these attributes. Such as “Tell a time where you had to truly demonstrate innovation.” However, superficial questions become the go-to playbook, especially when disciplined hiring goes out the window.

Competency-Based Hiring

Competency-based hiring is hardly new. In fact, Michael Lewis, author of The Undoing Project, explores this concept in everything from the NBA Player Draft to analyzing talent for the Israeli military. Firms wrestle with how to drive the right questioning to gather meaningful results. For instance, asking a candidate to detail their vast experience is very tangible when compared to asking them how they solved a difficult negotiation. The entire hiring philosophy needs to be flipped on its head, as shown in Figure 3:

Fig. 3

In fact, the top line should be maintained but simply serve as a filter to get to the next level of screening. For example, assuming a project manager has the applicable level of experience, the interviews focus on the intangibles. To do this effectively, the firm must define success for each position within their firm. What does the best project engineer/manager/superintendent exhibit daily that makes them successful in OUR ENVIRONMENT? See Figure 4.

Fig. 4

 

With the core competencies defined, a firm can now articulate the right questions for each interview:

  • Project Engineer:
    • Intellectual Curiosity
      • Why did you get into the construction industry?
      • How do you keep yourself stimulated?
      • How do you keep up on new trends in the industry?
    • Self-Starter
      • What type of manager do you require?
      • What motivates you in your work life?
      • How do you keep yourself motivated when doing tasks that might not be the most “glamorous”?
    • Solution-Oriented
      • Tell me about a project you recently completed (at school or work) and what were you solving for.
      • How do you manage projects in your personal life?
    • Flexible
      • Describe a time where you were pulled off a project only to start a new assignment.
      • Describe a management style that frustrates you.

Ultimately, the competency will dictate the rationale of questions. In some cases, there are no wrong answers but seeing how the candidate responds will provide a brief glimpse into potential sticking points. On the other hand, if a firm was hiring for a “Design-Build/Conceptual Estimator” and the candidate failed to exhibit a comfort level with a competency such as “Dealing with Ambiguity,” the answer might be on the table.

Skill Testing

Construction organizations have begun to add various testing to their cadre of tools. DiSC, Proscan, Myers Briggs, Predictive Index, etc. provide firms a new dynamic with which to gauge personality fit. However, how many firms use these tools to ask the right questions? For instance, in the case of a “Dominant” superintendent, should the following questions be added to the process:

  • Describe a situation when a subcontractor or tradesperson let you down.
  • How did you handle the last time you had rework on a project?
  • How would you define a successful project manager/superintendent relationship?

On the surface, a dominant superintendent might be exactly what is required but evaluating the magnitude and depth of that dominance might ensure a cultural match.

Additionally, best-of-class firms are now considering other forms of testing to ensure there is capability matching competency. For instance, as is inspired by firms like Google, there is a higher value placed on the use of case studies:

  • Scenarios—Placing the candidate in a routine situation that carefully examines how they solve problems—e.g. Your project is behind schedule and it has had two straight months of margin erosion. The customer has asked you to price an additional scope of work. Describe the strategy and tactics of how you would manage this project moving forward.
  • Skill Testing—Whether it is a math test for superintendents or a small mock presentation for a business development manager, the firm can grade raw skill in a safe setting.
  • Critical Thinking Experiments—Much like Google, implement critical thinking skill testing. This becomes less about their answer—which in many cases is irrelevant—and more about HOW they solve problems—e.g. How many golf balls will it take to fill Wrigley Field in Chicago?

In the end, the filters and tools abound when it comes to securing the right talent for an organization. However, it comes down to a willingness to adhere to the process and discipline to stick by the results the process yields. Many firms become fixated on a candidate for all of the wrong reasons and they look back at the wake of disaster it caused. There will be plenty of challenges in the hiring process and plenty of lowers slipping through. However, the onus lies on the firm that simply uses the “fog test” to screen talent.

As a principal with FMI, Tampa, Fla., Gregg Schoppman specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. Prior to joining FMI, Schoppman served as a senior project manager for a general contracting firm in central Florida. He has completed complex and sophisticated construction projects in the medical, pharmaceutical, office, heavy civil, industrial, manufacturing, and multi-family markets. He has also worked as a construction manager and managed direct labor. Furthermore, Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets. He can be reached at (813) 636-1259 or gschoppman@fminet.com.

 

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Overcoming the Challenges of Finding and Developing Talent in the Construction Industry

October 2018

 

by Sarah Mueller and Jesus Yactavo, Shapiro & Duncan

It’s a theme that has become all too familiar in construction companies these days. You have the work. You have open positions. People are applying. But you can’t find the talent with the technical skills you need.

Let’s assume that your company is a mechanical contracting firm that provides cutting-edge mechanical solutions including pre-construction, engineering, construction, design/build, fabrication, installation and maintenance services. This company would have an ever-growing need for senior HVAC techs and journeyman plumbers, pipefitters and welders. These positions require three to five years of experience. To find the right people, and then develop this talent after they come aboard, it takes a multifaceted approach.

Causes of the Construction Talent Shortage

With the current unemployment rate at 3.9 percent, the lowest since 2000, virtually everyone who wants to work has a job. This is what economists call a “full employment” economy. This workforce reality is certainly reflected in today’s construction industry. Everyone who is in the skilled trades and is good at what they do is already employed. Nevertheless, the work is out there and contractors are forced to compete for a shrunken pool of qualified talent. While there are plenty of entry-level people in the construction trades job market, a skills gap exists.

No doubt, construction is not easy work and that makes it even more challenging to bring people on board. Currently, there are half a million positions that can’t be filled in the construction industry because of the talent shortage. At the same time, increasing numbers of people, especially workers in their 50s and 60s, are retiring from the industry. As a result, the construction jobs deficit is expected to increase to 2 million by 2022.

Construction companies have to work especially hard to demonstrate to millennials that they offer a great career opportunity and a better place to work. Generally speaking, people born since the early 1980s are expecting advancement opportunities and work/life balance. Millennials are also concerned about career mobility; they don’t want to be stuck in the same position for the next 10 years.

Keys to an Effective Construction Recruitment Process

Recruitment must-haves for a construction company include all of the following:

  • In today’s digital world, posting a “Help Wanted” ad in a print newspaper has become obsolete. Instead, creating a strong online presence has become a critical channel to utilize in the recruitment advertising mix. Today’s recruitment advertising channels of choice include Indeed, Monster and even Craig’s List. Job openings should also be posted on a company’s social media channels. In addition, employee searches can be conducted through the LinkedIn Recruiter feature.
  • A robust applicant tracking system.
  • Encouragement of employee referrals. For example, an employee who refers a qualified new hire would be eligible for a referral bonus of $250 for an entry-level employee up to $5,000 for the foreman level. For an employee to earn the entry-level bonus, the new hire he or she refers would have to stay for at least 90 days. Larger bonuses would be paid over a one-year period.
  • Active participation in career fairs conducted by high schools, community colleges and four-year colleges.
  • Emphasis on safety. Nowadays, to attract enough high-quality applicants, construction companies must make safety a No. 1 priority. Maintaining a highly robust safety culture means providing safety training on an ongoing and as-needed basis. This emphasis on safety should be strongly promoted in the company’s recruitment advertising and supporting materials.

Diversity Matters

There is no doubt that a diverse workplace fosters a company culture in which different ideas and ways of looking at solutions can flourish. In fact, industry studies have shown that diversity in construction is linked to higher productivity. That is why construction firms should make a concerted effort to increase the number and importance of women in the company—including opening up opportunities for women employees to become members of the corporate leadership team—as well as hire and promote more Latinos and Hispanics.

The key to developing a diverse employee population is making connections that build on similar values. Construction companies must build strong partnerships with organizations that support hiring of Latinos and Hispanics, women and people with disabilities in construction. Examples in the Mid-Atlantic region include:

  • Worksource Montgomery, an organization promoting job training and placement in Montgomery County, Md., in the Washington, D. C. metro area;
  • International Rescue Committee, a Baltimore-based nonprofit that assists refugees from Latin American countries;
  • Associated Builders & Contractors Women Building Washington committee;
  • WV Women Work, an organization that promotes hiring of women from West Virginia in construction; and
  • Seeking Employment Equality & Community, a Silver Spring, Md.-based nonprofit that creates employment opportunities for people with intellectual and developmental disabilities.

Building strong relationships with organizations such as these requires communication on a regular basis, to make sure the partnership is a good match for your company’s culture.

Keys to Employee Retention

In today’s construction industry, as mentioned earlier, it’s hard enough to find high-quality employees. Once that talent is on board, it is critically important to hold on to these employees.

That is why employee education and training is such a critically important component of a committed and consistent recruitment process that aims to develop a skilled workforce. Moreover, employee development should be viewed as a strategic priority in the broader effort to develop a strong employment brand. Companies should invest in their employees just as they would invest in the corporate brand.

Today, employee development in the construction industry has become all about keeping employee skills current in a business environment where technology is rapidly advancing. This is not your grandfather’s, or even your father’s, construction industry. No doubt, construction is not easy work and that makes it even more challenging to bring people on board.

Meanwhile, the rising cost of education is another key factor related to employee recruitment and development in construction firms. A major challenge is heightening awareness among prospective and current employees that it is possible for a young person to work hard, earn a living with good benefits and obtain an education that will be of value to them—without being saddled with five or six figures of student loan debt.

Apprenticeships, in fact, are like obtaining a four-year degree without the cost. The tradeoff is working full-time while going to school either a couple of evenings a week or one to two days a month, depending upon the program and employer. For many, this is an appealing blend of classroom instruction and on-the-job training.

Prospective and current employees also need to know that they can have mobility within the construction field—that it’s not a dead-end career. In reality, there is always opportunity to evolve your job title and there is substantial room for growth in the field, no matter where the employee starts.

For example, with the right blend of education and training, a plumber could become a project manager or an HVAC technician could become an estimator. An apprentice could become a foreman, then an assistant project manager, then a project manager. From there, the career path could lead to project executive and ultimately to vice president. It all depends on the individual’s talent and drive.

Thus, providing education and training results in more upward mobility for employees, which in turn opens up more jobs, builds the company and ultimately adds value. Companies that place a high value on employee training and education could even go a step further and provide a tuition reimbursement benefit toward a degree at the local community college, a nearby four-year university or another institution of the employee’s choice. Two credits per year is a good starting point for a tuition reimbursement benefit.

Lastly, construction companies should strongly consider reimbursing employees for the cost of obtaining professional certifications. Whether it involves a skilled trade in which the employee is working on a journeyman’s, journeywoman’s or master’s license, or a skill area in which the employee wants or needs a professional certification—such as Design/Build, Leadership in Energy and Environmental Design or Human Resources—certification attests to their ability to handle a certain level of work. Employee certifications also demonstrate the company’s collective ability to perform. It shows that a contractor or subcontractor has the capability to drive the business, to drive projects and to be successful as a team.

Key Takeaways

To maximize the efficiency and effectiveness of a construction company’s recruitment and employee development/retention program, here are five things to keep in mind (in ascending order of importance):

  1. Work hand-in-hand to develop strong partnerships with employment resource organizations.
  2. Maintain an active recruitment advertising presence on Facebook, LinkedIn and other key online employment platforms such as Monster and state job boards.
  3. The company’s HR team needs to keep a running tally of jobs that are currently in place and pre-plan what future job needs are going to be—three months, six months, one year and five years out.
  4. HR should be actively engaged in the market, know how the economy is doing, and know what your competitors are up to.
  5. Make recruitment and employee development a strategic function within the company and allow HR to have a seat at the top leadership table with ownership.

Sarah Mueller is director of Human Resources and Jesus Yactavo is the senior Human Resources generalist at Shapiro & Duncan, Inc., a third-generation family-owned mechanical contracting business serving customers in the Washington, D.C., area since 1976. Shapiro & Duncan is the “Provider of Choice” for complex commercial, government and institutional design-build projects that require first-rate performance, work quality and customer service.

 

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Importance of Keeping Your Employee Handbook Up-To-Date

October 2018

 

by Jamie Hasty, SESCO Management Consultants

Employee handbooks are an important way for employers to communicate rules, expectations, and benefits to employees. They also can serve as a way for the company to establish its brand and convey its history and corporate culture. If the company’s employee handbook is out of date, however, it can become a liability, rather than an asset. With ever-evolving laws and regulations, it is important to ensure that your company’s handbook is compliant with federal, state, and local law.

An employee handbook should include statements addressing at-will employment; equal employment opportunity and harassment; work hours; leave under the Family and Medical Leave Act; accommodations under the Americans with Disabilities Act; workplace violence; trade secrets and confidentiality of company information; work rules and the consequences for violating them; and other important issues. But often handbooks include confusing or complicated policies. As you consider simplifying and keeping your handbook up-to-date, consider the following.

Communication

Your handbook is an important communication tool. Apart from spelling out the “dos and don’ts,” the handbook can introduce employees to the mission, culture, tone, and management style of the organization. It can be a dry list of rules, or it can personalize a company. It can be a quagmire of information or a big time-saver for HR to help employees answer basic questions.

How you communicate the information is just as important as what you communicate. Make the tone of your handbook your own and ensure that it covers what is most important to your culture.

Comprehensive Content

Employers should continually assess that the handbook makes sense for their workplace. A handbook that is long, poorly organized and full of “legalese” is daunting for HR to update, and unlikely to be helpful to employees. But some legalese is important, such as a prominent disclaimer that the handbook is not a contract, does not guarantee a job for any particular time, does not change the at-will nature of employment, and is subject to change at the company’s discretion.

A handbook cannot cover every possible scenario. Include policies that are legally required or encouraged and key company-specific practices. But review periodically to see if a policy can be shorter, clearer, or eliminated. If someone outside of HR reads it, do they agree that each section is necessary, clear, accurate, and relevant?

Current Issues

An out-of-date handbook has limited use and can be a legal liability. It is important to capture legal changes affecting your workplace.

LGBT Protections. Laws continue to expand protections afforded to lesbian, gay, bisexual and transgender employees. Courts have held that LGBT individuals are protected by Title VII’s protection against discrimination “because of sex.” Many states and municipalities also have enacted laws and regulations expanding employment protections to include LGBT individuals. Given this trend, employers should ensure that their equal employment opportunity policies provide equal protection to employees without regard to sex, sexual orientation, gender identity/expression, or marital status.

Moreover, in light of the U.S. Supreme Court’s decision recognizing same-sex marriages, companies are required to provide same-sex married couples with the same benefits as heterosexual couples. Employers should revise their policies on employee benefits and leaves of absence to ensure that same-sex couples receive equal treatment.

Pregnant Employees. The Pregnancy Discrimination Act prohibits discrimination based on pregnancy in any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, and benefits. The Act also requires employers to treat pregnancy disability the same as other disabilities for purposes of sick leave and temporary disability benefits. Likewise, employers must provide reasonable accommodations for pregnancy-related disabilities on the same basis as they provide accommodations for employees who are disabled for other reasons. Employers should make sure that their EEO policies include pregnancy in the list of protected categories and that their policies on accommodations include accommodations for expectant workers.

Dress Codes and Religious Accommodation. Title VII gives religious practices “favored treatment” and “requires otherwise-neutral policies to give way to the need for an accommodation” in the absence of undue hardship to the employer. The U.S. Supreme Court has held that an employer can be liable for failing to accommodate a religious practice, even if the employer lacks actual knowledge of a need for an accommodation. According to the Court, even seemingly neutral policies are not discrimination-proof.

Complaints

The #MeToo movement will lead to scrutiny of employer responses to harassment and misconduct. Employers should confirm their commitment to equal employment opportunity, making sure that the list of protected classes is up to date and includes all other classes protected by law. A handbook should also describe the reporting system, prohibit retaliation, and confirm that discipline will be imposed for breaches of the zero-tolerance policy.

Consistency

A handbook should reflect the reality of the workplace and vice versa. Does one department let employees take vacation with one day’s notice, while another department requires two weeks? Are the policies sufficiently clear and comprehensive that they can be enforced uniformly? Consistency will be key if a lawsuit arises. Time spent up front to make sure that a handbook provides a roadmap of appropriate behavior, a complaint process, and proper disclaimers will be important in avoiding and defending disputes.

In addition to keeping abreast of new laws, employers with employees in multiple states must consider legal variations in all of the jurisdictions where they do business. Numerous states and municipalities, for example, have their own paid sick leave rules and family and medical leave laws that go beyond what is required by the FMLA. Employers should be careful to take state and local laws into account when drafting their employee handbook.

Jamie Hasty is the vice president of SESCO Management Consultants. SESCO provides results-oriented human resource consulting services to its members. SESCO Management Consultants is retained by ASA to provide HR support on a daily or as needed basis. SESCO also provides services related to employee handbook development and review at discounted rates to ASA members throughout the country. The arrangement provides a free “hotline” to discuss day-to-day employment issues such as policy development, employee challenges such as disciplinary actions, terminations, or workers’ compensation issues, compliance to federal and state employment regulations, and many other management and human resource matters. Hasty can be reached at (423) 764-4127 or jamie@sescomgt.com.

 

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