Wrong hires cost you at least two times the salary. You'd never skip due diligence on a piece of land or an acquisition, so why trust only your instinct on an investment as costly as people?
So, you've lost two of your best superintendents, or you're opening a new community, or the best problem to have - your company is in a healthy growth mode, and you can't fill new positions fast enough. What's your plan?
If you are like a lot of managers, it's a three-legged stool: résumé, experience and gut. In other words, what candidates choose to tell you on paper, what jobs they have held and how you react to their sales presentation of themselves in an interview or two. Pretty scary stuff.
A bad hire, just like an excellent one, affects the bottom line. Turnover costs money in terms of:
- low productivity before the employee's departure
- cost of hiring a replacement (in dollars and time)
- low productivity during the new employee's training period
- real cost of mistakes that might have been made
- damaging effect turnover has on morale and
- numerous other costs.
"Most companies - builders and otherwise - do not have a very sophisticated view of hiring," says Martin Freedland, president of Organizational Development Associates in Atlanta. "Builders aren't any further behind than the rest of the world."
If Not Gut, What?
Rather than just skills and experience, human resource professionals agree that those in the position to hire also need to get at a candidate's behavioral history. "The interview process needs to focus on how an applicant has handled experiences," says Marian Wright, who has just started heading human resources for Village Homes in Littleton, Colo., but had spent much of her career working with Houston-based David Weekley Homes and in her own consultancy.
The idea be-hind behavioral interviewing is usually straightforward: People's past behavior is highly indicative of their future behavior. Managers ask candidates to tell stories or give examples of actual events to uncover certain job skills, characteristics or behavior patterns. For instance, to evaluate an applicant's problem-solving skills, an interviewer might ask: "Tell me about a time when you had to analyze information and make a recommendation. To whom did you make the recommendation? What kind of thought process did you go through? What was the outcome?"
To gauge a candidate's goal-setting and resiliency: "Give me an example of a goal you set but did not reach. What steps did you take? What obstacles did you encounter? How did that make you feel?"
The Right Fit
Before even getting to the interview stage of the hiring process, three steps should be taken. The last, naturally, is recruiting, but the other two - writing a job description and a list of competencies and personality characteristics required for the job - are too often done hurriedly or not at all. "People never want to take the time upfront," says Joan Moore, president of The Arbor Consulting Group in Northville, Mich. "But it's a pay now or pay later scenario."
In writing a job description, be as specific as possible. Old job descriptions might be a good starting point, Moore says, but as a company's needs change, so do roles. Generic job descriptions in books and on the Internet also might give a decent framework but should be tailored to suit your particular needs. Think about the people you already have - successful employees are good models for formulating job descriptions.
Now, work on a description of the person who will carry out the job successfully. Make a list of skills the job requires as well as several characteristics you want. Consider, too, the company culture. What adjectives describe the mission, the environment and how people interact with each other?
Scott Carter, human resources director for Hamlet Homes in Murray, Utah, one of the largest builders in the state, pulls from a list of key "dimensions," choosing five to 10 for any one position. Each dimension already has been defined to create a standard, consistent system across the company, which helps, considering Hamlet takes a team approach to interviewing. Each of the three managers, in their separate interviews with candidates, knows exactly what adaptive, initiative, oral communications or resilience means.
The next step is recruiting; finding a pool of candidates who suit the job. Companies have a lot of options, including the company intranet - both for candidates from within and referrals from current employees - newspaper advertisements, Internet job sites, headhunters, job fairs and networking.
Cindy McAuliffe, president of Grayson Homes in Ellicott City, Md., prefers the last - networking - and constantly works it. If she is looking to fill an accounting position, she checks with her contacts in accounting firms. For a production position, such as superintendent, she talks directly to the trades to see whom they respect and like working with at other companies. She likes her sales managers to keep a list of their top 10 recruits, from within the industry or elsewhere, whether they're hiring or not.
Carter has an effective technique for finding assistant superintendents. Hamlet Homes hosts informational meetings for construction management students at least twice a year at area colleges. The informal meeting is led by a superintendent who gives general information about the company, talks about growth opportunities, what the job entails and what an assistant superintendent does in a typical day and week. The students leave with a better understanding of the job, free pizza and information about a prospective employer. Carter leaves with 20 or so résumés and face time with students. If he meets a promising junior, he'll talk to him or her about an internship with Hamlet over the summer.
Two Jobs and Sample Questions to Ask to Get the Information You Need
- Overcoming objections and rejection: Tell me a time when you experienced a challenge in making a sales presentation. What did you do? What was the outcome?
- Aggressiveness, tenacity: Tell me about a time you've gone above and beyond to secure a sales contract.
- Integrity: Tell me about a time when you felt honesty was inappropriate. Why? What did you do?
- Technical skills and effective verbalization of knowledge: Give me a brief overview of the building of a house, starting with the bare plot.
- Learning and teaching style: How have you gained your technical expertise? Tell me about a time when you had to teach someone else how to do something.
- Subcontractor relations: Tell me about your hiring process for trades. Tell me about a time you had to fire a trade. What happened? How did you handle it?
Information on hiring abounds - and even might be overwhelming. In addition to your favorite search engine and the career section of your local bookstore, here are a few places to start.
Online: Society for Human Resource Management (www.shrm.org)
Includes a well-stocked online bookstore
Books: The NAHB Model Personnel Handbook for Small Volume Builders(NAHB Business Management)
Job Descriptions for the Home Building industry, Second Edition (NAHB Business Management & Information Technology Committee)
First Break All the Rules: What the World's Greatest Managers Do Differently (Buckingham, Coffman)
In general: Benchmark with other builders and other industries.
See what the NAHB and local home builders associations have to offer.
Check out your state's Civil Rights Department for legal issues.
Seek consultant referrals from other builders or business associates or the local chapter of the Society for Human Resource Management.
Use headhunting firms and job-posting sites. (Look for the Employer section.)