Assembling a complete team of construction professionals is a gradual and sometimes frustrating process. As construction companies grow from small startups to regional contractors that dominate their market, the team that gets the company there comes on board gradually, one team member at a time, and eventually coalesces into a successful company core. Often, however, this winning team exists for only a moment. It seems that as soon as the team comes together a key member leaves for a better job, another ages out and retires, still another falls ill, and another gets promoted leaving their previous position vacant. When just one key team member leaves there is no track record of profitability for the new organization as it is reconfigured. As a provider of construction services, a contractor is completely reliant on his/her team of construction professionals to provide their service at a profit.
Your Team is Your Company
Some may point to a construction company with a number of good project managers and say, that’s why this company makes money. The same can be said about two or three key estimators, and the same can be said about the person responsible for getting the work. Successful construction companies relegate responsibility for the primary functional areas of their business to key people. For example, if the key person in charge of a core function leaves the organization, the company is permanently changed and at risk until his or her replacement proves they can accomplish that role for a profit.
Turnover
Research reveals a straight-line correlation between high personnel turnover and low profitability. In other words, construction concerns that build a winning team and minimize turnover succeed in good times and bad, while companies that experience high turnover in key personnel lose money and frequently fail completely. There is a direct correlation that few in the industry seem to recognize. (The many years of research into this correlation continues.)
What’s Your Role?
Every contractor reading this blog should look over his/her shoulder and ask themselves, “Is this the same team I started with? How many “first names” do I know? Is that estimator married? How long has that project manager worked here? Does my CFO know enough about construction? Where did that project manager go to school? Did I give my VP operations a Christmas present last year?” If the answers to these questions don’t pop readily to mind you need to read on.
Cause of Turnover
The primary cause of turnover of key personnel in a construction company is – neglect. Every functioning human being has needs, both emotional and physical. If a job is answering those needs, employees seldom leave unless they are ill or unable to work for some other external reason. If they do leave (not due to illness or some other external reason over which you have no control), you have neglected them. You are the cause. So, if you have spent years assembling a winning team only to have them constantly coming and going, you are probably to blame. Few contractors can admit this to themselves and, therefore, miss a key opportunity to improve their management skills and ensure their company’s success.
Care and Feeding
Over the years I have used the expression “the care and feeding of the work force” to summarize the attention that top management must pay to key employees to prevent the constant turnover that weakens a team of professionals and jeopardizes the firm’s potential performance. The old expression, “It’s not personal; it’s just business” is wrong. When it comes to team building a more correct expression is, “All business is personal“. Every construction employee must feel that top management not only knows “who” they are, but “admires” their contribution and “cares” about their welfare.
- Top management needs to know “what” motivates each key employee.
- Some may need and value more money.
- Others may feel invisible and need recognition.
- Some need to be confident in their future with the company.
- Some simply need you to listen.
- Others a company truck; heated trailers; cleaner job site toilets, clearer direction.
- Finally, everyone wants to feel like they’re an important part of a winning team.
Frequency
If you are to retain the profit producing personnel assets that make up your successful company, you must personally interact with key team members regularly. If that is difficult because of the size and geographic configuration of your company, efforts must be made to build and maintain camaraderie and loyalty.
Preparation
- Keep an active, up-to-date personnel file on key employees.
- Refer to the file before important meetings with a key employee and update the file after significant interactions.
- Update personal information like the employee’s health, clarity of purpose, personal problems, financial problems, work related problems, and any other minutiae that enables you to interact with the team member on a personal basis.
Keep in mind that contractors often lose key employees for the same reason they lost their last wife – neglect.
For more information on employee retention, read more at: RETENTION
For a broader view on leadership, read more here: LEADERSHIP
To receive the free weekly Construction Messages, ask questions, or make comments contact me at research@simplarfoundation.org.
Please circulate this widely. It will benefit your constituents. This research is continuous and includes new information weekly as it becomes available. Thank you.
