With more than 1,100 salaried employees and 1,100 tradespeople on its payroll, Barton Malow, a national construction company in Southfield, Mich., is feeling the pinch. The problem isn’t securing projects but rather finding enough skilled construction workers to complete them; since its growth is limited by the number of people it can hire, the company can’t pursue jobs if it doesn’t have enough workers with the right skills to get them done.
So HR sought to shift the public’s perception of trade jobs. It developed a strong employee-value proposition that it used in a targeted, national campaign as a way to renovate the skilled-trade workforce. The effort aimed to draw college graduates from Michigan with various construction degrees who were working out of state back to the “Mitten,” says Jennifer Sulak Brown, vice president of HR at the firm.
She explains that employees receive free coaches or face-to-face, on-demand or on-the-job training opportunities to help develop their careers. The company also distributes free leadership books. Volunteer employee facilitators then lead on-site book discussions.
But perhaps its most clever program is a takeoff on Shark Tank, the popular TV show on which entrepreneurs make presentations to wealthy business people to secure funding and expertise to market their inventions. In this scenario, employees present their innovative ideas related to construction projects or services to company leaders.
Like the changes happening at Barton Malow, some HR professionals at construction companies are changing the way they tackle recruitment and retention. They have no choice; the death of shop class or industrial arts at many high schools means young people aren’t exploring or considering trades as legitimate careers. When’s the last time you heard someone say, “I want to be a plumber when I grow up”? Worse yet, baby boomers in the field are also retiring and roughly two-million construction workers quit the industry during the 2008 recession, vowing never to return because of its instability. While skilled trades are getting clobbered on all sides, HR is evolving the industry by remodeling dead-end jobs into lucrative, respected and challenging careers.
Several years ago, a project engineer at Barton Malow developed a software program to help himself become more efficient at submitting requests for proposals and other related tasks. He pitched the program to several company leaders, and it was such a big hit that the company formed a division called Fly Paper Technologies, which markets the software to the industry. The project engineer, who now runs the division, is also part owner of his creation.
Brown said this experience encouraged HR to gamify innovation and develop two versions of Shark Tank–one for professionals and another for its 50 interns. Approximately 12 interns participated last year. While their products are still being evaluated, the winner will receive $2,000, a job offer and be allowed to develop the idea at work. One product, for example, was safety software for people on job sites.
These initiatives are partly being credited for dropping the company’s voluntary turnover rate for salaried employees roughly 1 percent each year over the past several years. It now stands at less than 8 percent in an industry with an average turnover rate from the mid-teens to low 20s.
Brown says communication and transparency have also been key in combating turnover. Employees receive information about the company’s financial status and future plans at town-hall meetings and from leaders who visit job sites around the country.
Likewise, HR scrapped performance reviews. Employees now drive those conversations with their supervisors, sharing areas in which either they or their boss need to improve, their strengths and career plans and how the company can better support them.
“We give employees a voice to develop their career,” Brown says. “We take a significant amount of time to provide [them] with opportunities that grow and develop them as individuals, and then make sure they’re engaged. When we hire people, we hire the right person, not the ‘right-now’ person.”
Sometimes, unusual benefits can serve as an employee magnet.
After five years of service, one construction company pays employees $5,000 per year for each child he or she has in college, and also gives workers a 30-day sabbatical with $5,000 plus their regular pay and benefits for that month, says Brian Binke, president and CEO at The Birmingham Group, a national construction-recruiting firm in Berkley, Mich.
“It’s important that everyone in the company understands the ‘wow’ within the company,” he says. “If you can’t describe why someone would want to work for you, you’re behind the eight ball.”
Just as important, maintain steady communication with employees and job candidates, Binke adds. Don’t keep them in the dark about their job status, additional interviews or career opportunities.
Some companies also overpay key talent by 10 percent to 20 percent, he says. In the long run, he believes that approach is more profitable when compared to the cost of turnover and the loss of intellectual property.
“Over-deliver but don’t over-promise,” Binke says. “Everybody should know the company’s goals, mission and values. Make it a top priority, communicate and make sure everyone is on the same page. There are [many] unskilled trades [in which] companies are dying to pay $20 an hour just to start people.”
Alternative Career Options for Skilled Trades
Surprisingly, construction professionals are more concerned about upward mobility than salary. Between 2012 and 2013, Mercer, a global consulting firm in New York, conducted an internal labor-market analysis that also involved predictive modeling of the drivers of turnover with a construction client that employed 5,000 people, says Haig Nalbantian, senior partner at Mercer.
“When you think about construction [workers], you think short term–here and now–[such as] money and opportunities for them to take advantage of the boom times and protect themselves against the lean times,” he says. “That proved not to be true. We found that everything was about the career … upward mobility, growing with the organization and moving up the hierarchal ranks. Anything related to career and career progress improved retention.”
Nalbantian says HR professionals need to identify core employees who contribute to the company’s success and then focus on their career trajectory. Oftentimes, he says, HR fails to address career paths and qualifications with job candidates or employees, so some feel they’re on thin ice regarding employment or job security, especially as they grow older and experience difficulty performing jobs that require physical labor.
Workers need a sense of how their skills may translate into alternative careers, such as in supervision, safety, training or customer service.
“Organizations tend to be very secretive when it comes to saying what [workers’] prospects are, what a successful career looks like in their company,” Nalbantian says. “Are there clear-cut levels and titles, or how long does it take [to achieve those skills]?”
In this gig economy, more people are working across markets as contractors versus employees. Given the shifting environment, Nalbantian says, construction employers should take advantage of centralized or cloud-technology platforms such as Qmerit, which inventories worker skills and enables them to bid on upcoming jobs throughout the company.
Some of Nalbantian’s clients are starting to use these technologies, referred to as smart market or matching-market systems, which put employees in the driver seat regarding their career and enable HR to spend less time on recruitment with greater retention results. The systems automatically match employees with jobs they’re qualified for and at similar pay. Consider employees who prefer working 30 hours a week instead of 40 or who want to try something new. Now they have the flexibility to explore different jobs or select ones that enable them to work with specific colleagues or others who can teach or inspire them.
“Give some sense to incoming employees that there is a trajectory, opportunities for them to learn and grow and exploit their talents and experiences in far more diverse ways than they might have thought,” says Nalbantian. “You may get a leg up on your competitors.”
What worries Shannon Latham, day or night, is building a diverse and inclusive workforce.
The national director of HR and professional development for U.S. operations at PCL Construction in Denver says the company hired a diversity director to help its estimated 4,300 salaried employees–predominantly in the U.S. and Canada–gain better awareness and appreciation for people with different backgrounds. Among the company’s initiatives are networks or affinity groups that may draw and retain qualified workers.
Latham says the company’s turnover rate is about 10 percent among its professional workers, adding that it doesn’t track turnover for tradespeople.
She believes the company’s selling points are its robust training programs, especially in leadership development. Roughly 25 percent of eligible employees take advantage of the free training.
Other advantages are that PCL is employee-owned, supports an extensive succession-planning program and fills an estimated 80 percent of job vacancies from within the organization.
“Being an employee-owned company, we rely heavily on our equity program to attract and retain talent,” she says, adding that every year, the company hires roughly 170 workers in the U.S. and another 165 in Canada. “We have a workforce that demands employers make investments in developing their people.”
Since construction is a fast-paced industry and doesn’t offer the traditional 30- to 90-day hiring lens, she says, recruiting becomes a challenge.
“In construction, [recruitment] is immediate; it’s now,” says Latham. “You don’t have the luxury of time to be able to carry out and execute HR initiatives. A lot of things require this sense of urgency, unlike in any other industry I’ve worked in.”
To speed up its hiring process, Caddell Construction created a detailed recruiting plan this year. Sometimes, positions such as scheduling engineers can take several months to fill.
“We felt like we needed to have a well-thought-out plan and standard to guide our decisions or actions,” says Matt Abele, HR director at Caddell in Montgomery, Ala. “We also defined what our value proposition is in order for us to be successful, and [recruiters] clearly communicate it to candidates.”
Its employee-value proposition includes a profit-sharing program and stability, as government projects are its core business. But that also means the company is highly regulated.
The firm recently began exploring ways to create a more collaborative physical work environment and instituted a “more systematic” recruiting process at colleges, high schools and trade schools, Abele says.
The company’s voluntary turnover among its 3,500 workers–500 are employed in the U.S. while the remainder works overseas–averages 6.8 percent. However, that number drops to 6.2 percent for those under the age of 35 and 2.6 percent for employees with high potential.
HR recently started tracking its job-offer rate in hopes of identifying reasons why people turn them down.
“We’ve also developed a proprietary quality-of-hire metric, which we’ve never had before,” Abele says. “We [ask] a very specific question within our performance evaluation. We’ll measure it quarterly, tweak and track it over time. [We] feel pretty strongly that it’s a good indicator [of quality hires].”
But when you’re working with deadlines, sometimes you can’t wait for the ideal candidate and must lower the bar. Although recruiters may be lukewarm about certain candidates, he says, they may still be hired if they possess the bare-bones skills.
The industry is “definitely not boring and will keep you sharp,” Abele says. “I love the challenge.”