The “war for talent” is certainly a reality for Houston based construction firms, whether they are general or specialty contractors. Firms are hiring again at an ever accelerating pace and people with experience are in great demand. So firms are after the best “talent” and are making increasingly lucrative offers to lure them away from their current employers. It is happening at every level too, from craft worker to senior executive. And, in our judgment, with the robust market for both commercial and industrial construction, it has “only just begun!”
This battle for the right people is further intensified by players from outside our construction world. The energy companies are looking for the same type person as our craft workers and engineers. This has become exacerbated with the wonderful (for Houston and Texas) shale gas boom. Shale drilling is much more labor intensive than the traditional methods of finding oil; consequently, these energy companies are raising the stakes for the high school graduate with some technical aptitude, that young person good with their head and hands. They also want the college graduates with engineering degrees, as do many other industries. So we have real tough competition from big, powerful and prosperous companies.
Now comes the manufacturing industry, enjoying an American resurgence as the result of shale gas, which makes both their energy and feedstock costs much more advantageous to be here in the United States. Combine this fact with the relative parity in labor rates due to American productivity gains, and the much better intellectual property protection under American law, and all of a sudden manufacturers are both re-shoring existing overseas jobs and creating new ones here. They, too, are after that same person we need, and in large supply. At a recent National Association of Business Economics conference, the leader of the newly formed American Re-shoring Initiative indicated they would need to hire and train 600,000 new people over the coming 10 years, and they were developing strategies to recruit and train them, working primarily with junior colleges. And, right here in our own backyard, there is a terrific example of such a partnership between the chemical companies and College of the Mainland to train plant operators.
So it is time for our industry, particularly in the Houston and Texas area, to “suit up” (a favorite expression of the late Leo Linbeck, Jr) and “get in the game.” Attracting, retaining and developing “talent” is a strategic imperative for the CEO and his senior executive team at all construction companies. This priority issue cannot be delegated to the human resources department. Certainly they become the functional partner for implementation; however, the strategic direction and the changes required to truly compete for talented people must be led by the top team.
What are some things we might do, or questions we might ask ourselves, to get started if we determine we need to “up our game?” The first is a threshold question: What is the mental framework we, as individuals and as an industry, have about people? Do we see them as just workers, in a commodity sense, or as “hands” at the craft level, implying one is as good as the next? If so, perhaps we examine that paradigm and make some changes.
The word "talent" is pervasive in most management literature today. Webster defines it as gifts or special abilities. But a better definition comes from Ed Michaels, retired McKinsey partner, who along with Beth Axelrod and Helen Hadfield Jones, also with McKinsey, wrote the book The War for Talent in 2001. In the book they define "talent": “in the most general sense, talent is the sum of a person’s abilities - his or her intrinsic gifts, skills, knowledge, experience, intelligence, judgments, attitude, character and drive. It also includes his or her ability to learn and grow.” Seeing people as talent, rather than as the roles they have or the work they do – the carpenter; the estimator; the superintendent - is much harder work. It requires really knowing that specific person, in substantive depth.
When companies and their leadership team see their people as “talent,” and model that behavior in their own dealings with each other and with their direct reports, it changes the culture, the language and the level of energy required (lots more), but it also changes the payoff in terms of both today’s productivity and tomorrow’s possibilities. In our judgment, it is a wise choice.
When leaders see people as talent, rather than as payroll expense and problems, they are attracted to “talent management and human capital development systems.” Both of these phrases imply value, investment and dividends. Google those phrases and you will get real insight into how seriously committed other companies are to this critical strategic initiative. They are on the same battlefield as we are; they are out to win this war for talent.
One of the most essential elements of these systems is the “onboarding” process. There is a lot of data on this topic on the internet. Both Career Builder and The Society for Human Resources Management have excellent websites on this topic. If you don’t want to go to that trouble, at least ask these questions:
- “How is the new hire welcomed into our company and culture?"
- "Is he or she made to feel welcome or totally on trial?"
- "Is there a difference for the new craft worker who reports to a jobsite and the new project manager who reports to the office, in their initial “onboarding?”
Maybe there is and should be a difference, but at least explore the questions. The skilled craft worker may become the scarcest resource of all in the coming months.
Astute leaders also realize that there are at least three, possibly four, different generations all attempting to work harmoniously in the workplace. Each generation has been programmed differently in terms of work attitude; each has different expectations. These differences can be identified, understood and capitalized in a true talent management approach, where the individual is the focus; where goal setting, mentoring, consistent performance reviews, training and communications are tailored dimensions. To a number of supervisors and managers from other generations, this talent management approach will seem too soft, too pampering and even unfair compared to the conditions they had to endure when they first came to work. Top management needs to deal quickly and firmly to stop this attitude if it reflects in the way these managers and supervisors deal with their people. There is no bigger waste of time than a group of managers lamenting that “these kids have it too easy.” Our industry is in a talent war with major companies, and we won’t compete if they’re using AK-47 era attitudes while we’re using a bow and arrow era mind set.
The truth is these young people are different, particularly the Millennials, those born from 1982-2002. This is the group that every industry wants today, especially if they have the STEM degrees (science, technology, engineering and math), or if they have technical aptitude, a sense of mathematical relationships and can use tools or operate machinery. They are very smart, they are very goal-oriented and they are very team-oriented. They want to do things that contribute to the public good (all the things we as an industry offer!) In addition, they would rather “see a sermon than hear one.” They expect their leaders to walk their talk.
They are also tech savvy. Hire them and imprint them with your company values and culture. Give them the right technology tools and toys; set high goals with them, hold them to these high standards and give them regular performance feedback. Create an environment where they have both individual accountability and team responsibility, and where they can interact easily (the driver for the new office product we are seeing here in Houston), communicate consistently and straightforwardly, and listen respectfully. Then watch out! They are capable of doing amazing things for our companies and industry. (It is this same generation that is changing the world at Apple and Google!)
These Millennials can fit wonderfully into our industry. We build structures that serve humanity; our work makes an enormous contribution to the public good. They also do not expect to stay with one employer their whole lives, and since we are a mature, cyclical industry, we have ups and downs. A recent Harvard Business Review article (June 2013, pages 49 -54, Tours of Duty, the New Employer-Employee Compact, by Reid Hoffman, Ben Casnocha and Chris Yeh {the founders of LinkedIn}) suggests this generation responds favorably to a “tour of duty” approach. They are hired for a specific project or period with clear deliverables; the employer gets their talent during the tour and the employee gets marketable experience; it’s a higher level alliance. At the end of the tour, they both evaluate. The employee either moves on or signs up for another tour, if available and offered. Our industry can probably use this innovative approach as well as any (don’t we do this in effect already, especially at the project level?).
So the war for talent has been fully engaged. It is both an inter-industry and intra-industry war. On the inter-industry battlefield most companies have a sense of the rules of engagement already. They know the competitive salary and benefit levels. They know how to use their client base, project portfolio and company history to their advantage. They can increase their effectiveness by reviewing their processes and getting closer to their people, communicating better, listening more, and being proactive with reviews and increases.
The intra-industry battlefield calls for different tactics. The industries with which we are competing, primarily energy and manufacturing, are made up of large companies with formal talent management / human capital systems. They have enormous budgets, many compensation options, benefit plans, perquisites and amenities (child care, exercise facilities, yoga and dance classes and on and on). Certainly we need to think in terms of “talent” and build our own talent management system, probably with more structure than we have now. But we also need to sell and optimize the inherent advantages of our companies and our work.
Most construction companies are closely-held and family-held companies. They are built on solid, enduring human values. They take a longer range approach to major decisions. They are willing to sacrifice personal financial gain in the short term for longer range stability and survival. There is more management stability and predictability of direction. Major public corporations serve the demanding god of shareholder value; their fate is determined quarter to quarter. Executives come and go; changes in direction occur regularly.
Then there is the inherent nature of construction work. It is hands-on from day one, whether in the field or in the office. People are assigned to real jobs with real goals and deadlines, not to long formal training sessions with many simulations. The results of construction work are permanent, visible and valuable to the community and the country. People can see their work and show their families the projects they helped build. And, above all, construction people - their teammates - are real, strong and character-based. It is an industry where, for most, their word is their bond. This industry values “plow horses,” not “show horses.” And it is moving more quickly than ever to embrace technology; to innovate with the means, methods and materials. People joining construction companies now have the chance to be part of exciting and dynamic changes that are already in process. We are an industry that can compete both for seasoned veterans and the bright young minds.
But we do need to “up our game.” We need to get our share of the talent for the industry. Companies need to audit and modify all dimensions of their talent management and human capital systems, and make the necessary changes, if they are not at a major league level. The energy to do this must come from the top, and it must remain a major strategic goal for the foreseeable future.
In addition, we must renew and expand our commitment to the Construction Career Collaborative (C3) initiative. We need to encourage owners to spec it, and we must insist our project partners embrace its principles, particularly the evolving craft training dimension. If we do these things, our industry and the individual companies that make it up will win our battles in the “war for talent.”
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