“I have discovered in life that there are ways of getting almost anywhere you want to go, if you really want to go.”
Harlem Renaissance author/poet Langston Hughes was so right in his assessment about commitment. Only YOU determine how far you will go.
Many contractors throughout the greater Houston metropolitan area believe we have a labor shortage. Several contractors are holding on to their employees for dear life; some are poaching workers from other contractors and a few are hiring unskilled, undocumented workers and refusing to pay an honest rate for an honest day of work. These practices are wrong.
Sometimes, we look for skilled and unskilled laborers in all the wrong places.
The grass always seems greener on the other side of the fence, and even though you don’t live on the sunny side of the street, few realize that the treasure chest is buried in their backyard. The treasure I’m talking about is the data we collect and send to meet the owner’s contract reporting requirements.
Although a desperate contractor’s perception of data as either unnecessary or an extra burden and cost may be perceived by some as reality, we see labor data collected from certified payrolls and on-site interviews is fact, not fiction and those facts can tell you what’s really going on with both your organization and project.
Labor data identifies workers, job classification, wages, hours worked, training received, and other work-related variables to create a composite palette of useful information. In fact, this information is so useful that project owners and construction contractors can improve their financial bottom lines by understanding and strategizing how this data can be transformed into workforce analytics that build competitive, profitable companies.
Workforce analytics is a combination of software (i.e. Microsoft Excel and/or Microsoft Access) and a methodology that applies statistical models to worker-related data to allow project and construction business owners to optimize labor management strategies for their prospective organizations and/or projects.
My mentor, the renowned Pat Kiley, recommended reading, Understanding Michael Porter: The Essential Guide to Competition and Strategy, by Joan Magretta for perspective.
Michael Porter is both a professor and a management guru in the field of competitive strategy. He is a Department Head at the Harvard Business School (HBS) who is known for his theories on economics, business strategy, and social causes. Lessons I learned from studying his theories regarding strategy are:
- Competitive advantage is about superior performance.
- The real point of competition is not to beat your rivals. It’s to earn a profit.
- Profitability is determined on how effective a business uses its resources.
- If your goal is anything but profitability- If it is to be big, or to grow fast, or to be a technology leader- you’ll hit problems.
- Substitutes – products or services that meet the same basic need as the industry’s product in a different way – puts a cap on industry profitability.
- The only way to know if your company is achieving the ultimate goal of creating economic value is to be brutally honest about the true profits your company has earned and all the capital that has been committed to the business. Strategy, then, must start with a commitment to measure performance accurately and honestly.
Basically, Porter is recommending having a plan because the Budweiser Beer tagline of “You don’t hire a ferret to do a weasel job!” rings true when reviewing contractors who initiate poor project execution strategies.
Examples include:
A laborer cannot also be used as a heavy equipment operator and still be paid a laborer’s rate. Contractors who hire unskilled workers who are "here today and gone tomorrow" but don’t appear on either the site sign-in sheet and/or certified payroll, fail to pay overtime, and pay their workers with cash to avoid paying taxes and worker’s compensation are using substitutes and probably not profitable because they are not truly measuring their day to day performance accurately or honestly.
True measurement is creating a workforce analytic pie/bar chart using job classifications, wage rates and hours worked in comparison to project schedules and performance reports to help project owners and contractors understand data trends. Both project and construction owners can then use the data in developing corporate recruitment; learning & development; compensation; health & wellness; and leadership strategies.
A description of each follows:
Recruitment
Identifying potential workers by zip codes in advance of needing them so a bank of suitable candidates is ready when they are needed on the jobsite.
Learning & Development
Recommending additional personal development actions that similar employees have taken (i.e. safety and skill training).
Compensation
Providing salary and benchmark information to keep you abreast of market conditions and to make recommendations on how to retain key employees.
Health & Wellness
Producing notifications about the safety, health and wellness trends that meet both workers’ lifestyle and company’s needs.
Leadership
Highlighting behaviors, skills, and attributes that best fit the current and future leadership of a company to determine how to nurture the current personnel, recruit new people and manage succession for a stable future as the construction marketplace evolves.
In closing, a famous philosopher once said, “You are braver than you believe; stronger than you seem; and, braver than you think. It’s all about the commitment.” Committing to use labor data to develop and implement viable business strategies will help get you to where you want to go with your company.
