The year 2016 was an eventful one for home building.
Becoming the Employer of Choice
The January article in Professional Builder regarding the projected decline in individuals entering the home building industry led the way.
|Martin B. Freedland is the president of Organizational Development Associates, Inc. (Atlanta). He and his organization have worked with many companies throughout the United States, assisting clients in increasing profits and productivity through better people and better people management. A number of these clients have achieved national recognition, having been designated as Builder of the Year and winners of the National Housing Quality Award. A major portion of Freedland’s practice involves organization development consulting and training in recruiting, hiring, training, management and motivation.
The January article in Professional Builder regarding the projected decline in individuals entering the home building industry led the way. Since then, the national press has followed suit. The New York Times, Wall Street Journal, USA Today and others have been writing about the United States not having a sufficient supply of qualified people to fill the jobs in a booming economy. As a result of the intense competition for the best and brightest, top law firms have raised starting salaries from the $90,000 range to $140,000. High technology companies are lobbying Congress for increased immigration of highly educated Asians to fill U.S. positions. The hunt for people is gathering steam.
Where does this leave builders? What can we do to prepare for the future if we are to remain in business? After all, as painful as drywall shortages were, they pale in comparison to people shortages.
To begin, each builder must have a solid strategy for keeping the good employees they have. The "snipers" are all around looking for your best people. Builders, large and small, are expanding into new markets and new cities to take advantage of the booming building economy. They need people, and one day you may well discover your top-notch construction manager has resigned or a high producing sales person has accepted a sales management role with a competitor.
You can’t just try to defend your company against sniping - you need to anticipate it. Bench strength, both internal and external, has to be recognized and developed. Builders need to be on the offensive.
To develop bench strength, two strategies will be necessary. One will be the internal development of current employees. The second will be external talent recognition and recruiting.
To retain current employees, each builder requires a formal development or training process for every position, especially those positions that are most vulnerable to outside raiding by competitors. Specifically, sales, sales management, superintendent and construction management positions are prime targets, since recruiting these people allows your competitor to take instant advantage of growth opportunities. The next positions that are difficult to fill are purchasing/estimating and land acquisition. Your other positions are by no means safe, but sniping or raiding is concentrated in these jobs.
Think about it. Your competition wants your best and brightest for the same reasons you do: your people have a proven track record and they apparently do not require training.
Since your competitor apparently cannot train, that deficiency should become your opportunity to exploit. You must become the best training company in your market, and the training must never, ever stop. Training must be comprehensive, not just task directed. By adding value to an individual’s job, that person is less vulnerable to being recruited, just like adding value to your homes gives you a competitive advantage.
Most builders have no training. The industry’s most common approach is: "Here are the keys, page me if you have problems. I’ll be back this afternoon."
This presents a tremendous advantage for you. Invest in your people. Give them the opportunity to become better in their jobs and better people. If you take care of your people, chances are they will take care of you.
Currently, most builder training efforts are task directed. We teach people to build faster, waste less, and close more - in other words raise profits. All of these are noble causes for the company as they improve our results. Sometimes, we may even share part of the incremental gain with our people through incentives and bonuses.
This is not enough to make working for your company an exceptional experience. You remain vulnerable to losing people if you don’t help to build pride in the company. If you believe you are an exceptional builder, train your people in why you excel.
A few builders have created dynamic, committed organizations. The have double-digit, pre-tax earnings along with happy people and little turnover.
As a matter of fact, their people probably would not want to work anywhere else. When one believes in what he/she is doing, and the organization is exceptional, the snipers have little chance.
The Value of Networks
Externally, the second strategy is to identify individuals outside your organization who would be attracted to your exceptional management and commitment to individual development. The identification of these individuals should be a function of your line managers, not the human resource department.
Construction managers, sales managers and others should be networking - asking questions and learning about the best and brightest inside and outside the industry. Each manager should have a list of potential candidates. The president should have a similar list for management candidates, internal and external. These lists should never be "threats" to employees.
It is not unlike looking for new land or studying new products. Talent identification is a job requirement. There are numerous other ways to defend the raiders, including superior management, motivation and leadership. These will be addressed in future articles. For now, get started on your systems to develop your current staff and identify internal and external talent.
Bill Gates of Microsoft has said: "We will have more than our fair share of the best people."
Will your company be able to say the same?