Scroll through various industry press coverage and thought leadership articles from the last 40 years, and construction labor shortages will seem to dominate the headlines. The ability to attain and retain talent impacts a firm’s long-term ability to execute work, and no one is getting any younger. Construction businesses wrestle with succession depth for owners and business leaders in all areas of the organization, year after year.
Best-in-class firms have managed to use this industry challenge as an opportunity to develop a strong, competitive, yet collaborative, culture that accomplishes myriad goals: soft and hard skill enhancement, business management education, improved communications (internal and external), morale improvement, and ultimately, leadership growth.
The ongoing talent crisis is but one topic on the horizon. There is always a potential economic slowdown or market correction just around the bend. The key is in not simply riding the wave of the market highs, but instead harnessing control of scenarios the inevitable changes may bring.
Talent
Providing training and education courses is not enough. You must implement a program that examines the full complement of people-focused strategies, including:
- Branding—Why would potential employees choose your firm in an array of great organizations?
- Recruiting—Where do you look for employees? How and where you seek talent must be deliberate, consistent and disciplined.
- Hiring—How many levels does your hiring process have? How do you evaluate a candidate? What screening tools are available for all positions within your firm?
- Onboarding—What does the first day, week, month or year of employment look like? Is there a structured and disciplined onboarding process?
- Training and education—How are new associates trained? What about mid- and senior-level leaders—is their training and education stunted?
- Compensating performance—How do you reward standout talent? How do you retain this talent long-term?
More and more firms are evolving toward having a leadership position that is dedicated to full-time talent growth and development. While there is a cost impact, the cost of doing nothing to cultivate and grow associates may be far greater.
Innovation
There is a fine line between fascination with technology (admiring the bright, shiny object) and true innovation (leveraging that technology to enhance all aspects of performance).
Whether it be the continued push toward prefabrication and modularization; enhancements in autonomous vehicles and equipment; utilization of lean, agile, and/or six sigma principles and systems; or simply using the storehouse of sitting data to proactively drive business decisions, technology must be an action point within every firm’s business plan.
Risk Management
As projects get larger, more complicated and on tighter deadlines, there needs to be a renewed commitment to firmwide risk management. With the rise of tools that serve as “profit centers for risk”, such as captive insurance programs and trade-partner default vehicles, contractors will be required to comprehensively think of risk.
Coupled with increased life-safety requirements from customers and agencies and the ever-increasing cost of healthcare, risk management requires a trained professional to continually integrate all of these elements across business units and projects. This will require integration in the following areas/ways:
- Go/No-go project selectivity—True risk registers for project or targeting
- Preconstruction risk planning—Balanced life-safety and productivity planning
- Post-construction reviews—Incorporated best practices and lessons learned
- Quality assurance and quality control—Limited long-term potential sources of liability
- Employee health and wellness—Healthy employees and lower healthcare costs
Infrastructure
According to the American Society of Civil Engineers, the infrastructure within the United States received a grade of D+. Anchored by D-grade scores in the aviation, energy, schools and transit categories as well, the nation is grossly negligent across all areas that serve as the backbone of a country.
Consider the fact that Americans spend an average of 43 hours in traffic annually. What is the impact on logistical needs within the firm and on employee health? The opportunity is vast—even if only a fraction of the potential $4 trillion in infrastructure funding comes to pass. But more importantly, there remains opportunity for ancillary businesses.
For instance, even if a contractor does not build in the water, wastewater, transportation, aviation, etc. sectors, it is important to consider the industries that complement them or even simply the growth that will positively impact certain areas of construction.
Ramifications
There is no shortage of scenarios that may positively or negatively impact the construction industry. But, whether the economy wanes or continues to thrive, keep in mind these critical questions:
- If our best customer went away, what would our business do?
- If our niche or sector went away, what would our business do?
- If our best people left the organization, what would our business do?
- What aspects of the organization require the most ongoing improvement, and what impact does it have on our long-term health?
- What should the leadership team in our organization do now to develop both craftspeople and management to run the business in the future?
- If we mined the data our organization has, what could it yield about the firm’s current performance?
- What data should the organization use, and how do we properly utilize it to inform important business decisions now and in the future?
