How to Win the War for Talent

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While many homebuilding executives cite entitled land as their greatest long-term barrier to growth, their number one short-term constraint is talent. At all staffing levels, be it a new trainee, mid-level manager or senior executive, builders are fighting to acquire the people who can help them maintain their current stellar performance.

April 01, 2005

Scott Petty
Scott Petty

While many homebuilding executives cite entitled land as their greatest long-term barrier to growth, their number one short-term constraint is talent. At all staffing levels, be it a new trainee, mid-level manager or senior executive, builders are fighting to acquire the people who can help them maintain their current stellar performance. Most companies have the land they need; however, they lack the operational capacity to develop it.

How can builders free themselves from their operational constraints and acquire the right talent for their companies? The answer depends on many factors, not the least of which is the level of the potential employee. Though many talent acquisition factors are similar across experience levels, each tier possesses unique characteristics that warrant closer consideration.

Entry Level

While some builders have successfully partnered with colleges that produce real estate, construction and industrial engineering majors, many have not done as well in establishing recruiting partnerships at the top business schools — both undergraduate and graduate. Most builders have also done an under-whelming job of promoting the success of their industry on college campuses such that when they do try to recruit at top business programs, interest in their companies is often limited.

Mike Grennier, head of recruiting for Pulte Homes, validates the need to aggressively target college campuses. "We have found college professors to be a major influence on students' career thinking and we want to get mind share early. At Pulte, we host an annual 'professor day' in which we bring in college professors from key construction/Real Estate schools and tell them the Pulte story, tour our R&D facility and let them hear from Bill Pulte about why home building [versus commercial construction] should be the career of choice for graduating college students."

How to win

  • Raise the profile. Builders need to aggressively increase their exposure in the media. Target the publications and national business periodicals most read by potential university candidates with an aggressive media relations campaign. Let them know about your company.
    "At Pulte, we realize that we have to sell home building as a professional career and get people to realize it is far removed from the 'pick-up truck days,'" says Grennier.
  • Mute the bubble talk. Nobody wants to join an industry that is seemingly headed for a crash. Many potential entry-level employees have heard about the late 1980s real estate crash and say "thanks, but no thanks!" to homebuilders. Homebuilders can eliminate this recruiting barrier by publicizing how they are much larger, more sophisticated and diversified than in the past. Potential employees need to know that diversification and tighter financial control will enable builders to perform even in challenging times. In addition, strong demographics from record immigration the past decade "is placing enormous upward pressure on home buying," according to David Lereah of the National Association of Realtors. This pressure should help the industry maintain its pace, and homebuilders must tell this story.
  • Talk upside. Not only are there wonderful career opportunities for top talent in this industry, but the financial performance of the industry is also stellar. The wealth created in homebuilding is head turning. Potential recruits need to know that the industry has GIANTS and the future is bright. Explicit talk of a strong career development path will also appeal to top candidates, especially those with the motivation and ability to one day become a part of your management team, but who might not have been educated directly in real estate.
    "We also recruit from non-construction programs such as liberal arts and general business for sales, customer service and marketing roles," adds Grennier. "We have targeted key schools and frequently host 'career night' presentations about why students should consider home building versus traditional, big corporate opportunities."
  • Demonstrate potential for impact. Very few industries offer the opportunity to impact bottom line performance like home building. Unlike most corporations, the action in homebuilding is local. For example, Lennar recently hired a semiconductor supply chain executive into one of its largest regions to drive new procurement processes that will ultimately be adopted in other regions as they prove to be best practices. His potential for impact is great.

Experienced level

Builders typically stay inside the industry for mid-level talent, yet it is the level in highest demand at the moment and can be the most difficult to find. Whether a company seeks talent inside or outside the industry, the key is to "go for the heart." Talking someone into a lateral move is a hard value proposition unless you get to the core of what makes up the person and find out what motivates him or her.

How to win

  • Culture is king. The number one reason "up and comers" seek a new position is to find a better corporate culture. While it is often not expressed as their surface driver, it's really important to understand this to be able to land a talented individual who is making what amounts to a lateral move.
  • Room to grow. The type of employee builders should want are those who like to expand their skills and gain additional responsibility. When talking with recruits, be sure to communicate the company story (which gets at culture), how people are empowered to make a contribution and how performers are rewarded. Telling inside success stories about others who have joined and enhanced their career is a good way to win someone over.

Management level

Tired of writing big checks? Going outside the industry is the way to go. Of course builders will need to backfill with experienced people in key roles like division presidents and land acquisition, but most other functional positions can be filled with talent from parallel industries. However, to succeed with recruiting from outside the industry, builders need to advance a competency-based approach to hiring and developing people (a topic that will be discussed in the next issue of GIANTS).

A competency-based approach is important because in almost every role inside a home building company, it's key to find someone who is comfortable with ambiguity, loves an entrepreneurial environment, is performance driven and has a down-to-earth demeanor. Other industries produce talent with these characteristics, but it is important to be able to identify them. A good starting point is to look to talent from highly decentralized businesses like hospitality/lodging, manufacturing, consulting firms and construction materials. In addition, people with a combination of experience from different industries can produce outstanding results.

How to win

  • It's a new runway. People leaving industries that are slow growing or flat will view home building as a breath of fresh air. When working for builders, Heidrick & Struggles tests potential employees hard around industry passion. If a candidate can't discover and communicate passion for the building world, then we pass. If passion is identified and expressed, then we believe the potential is great that we have found an energized, excited person who can bring in new thinking and impact the company beyond their position.
  • Move the needle. Some executives look at their careers and realize that they truly enjoy making a bottom line impact on the business, but that they find it hard to do so in a larger company. In home building, the action is at the "bottom" and helping a team succeed can be much more enjoyable and tangible for star talent. For example, Centex Corporation recently hired a new vice president of talent management from Disney to create an overall talent management architecture that will be deployed over the next four years. Talk about being able to "move the needle!"
  • Wealth creation. Performance-oriented people like the risk/reward equation in the building industry. The "right" person will be driven by a package that is influenced by personal, company and industry performance. The nice thing is that homebuilders are able to use such packages to attract top talent from other industries.

New Industry Dynamics Require New Recruiting Practices

Given the homebuilding industry has changed significantly over the years, large, diversified corporations that require the best in business talent are now dominating the industry. While the industry itself can be a source of good talent, relying solely on this practice may amount to nothing more than "shuffling the sheep." To truly raise the bar in finding talent, homebuilders must look outside traditional sources of employees to other industries or different college majors.

To attract talent from non-traditional sources, builders must also be able to articulate to entry-level employees why homebuilding can be a rewarding career; or to experienced performers from outside the industry why a lateral move into homebuilding can be more rewarding than riding out their time in a non-growth company. To attract such talent, homebuilders need to create a vision around the impact good employees can make, and ultimately, the great financial success they can achieve. Those builders able to achieve such objectives will win the war for talent. Those who can't may be left wounded in the trenches.


Author Information
Scott Petty is the Managing Partner, Construction Practice, for Heidrick & Struggles International, Inc. For more than 50 years, Heidrick & Struggles International, Inc. has been recognized as an executive search leader who every day solves critical business problems for clients. In 2004, Heidrick conducted 12 of the 16 Fortune 500 CEO assignments, demonstrating the company's position as a world leader in helping clients build top performing management teams. The company is actively redefining top-level search to encompass complementary services that help build strong companies and the leaders of tomorrow. Heidrick & Struggles' Real Estate and Construction Practice applies these same techniques to help builders find top management and board of director level talent.


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