The numbers are brutal.
- The construction industry had an estimated 494,000 job openings at the end of April 2022, the highest ever.
- The median age of a construction worker is now 42.3 years.
- Funding from $1.2 trillion Infrastructure Investment and Jobs Act is starting to flow, creating yet more work for a fully booked industry.
While inflation and fuel costs may temper the job numbers, there’s little statistical respite ahead for contractors in need of skilled minds and hands.
Some believe, however, that there’s an awakening among contractors on what needs to happen to reverse these trends.
AEM is committed to taking an active role in examining and shaping a shared industry vision for the future of building, so as to offer equipment solutions and insights to help the construction industry succeed. In support of that goal, we have released The Future of Building, a whitepaper highlighting the most significant trends impacting construction in the years to come. Learn more.
“I believe construction’s people problem can be overcome in just a few short years because we’ve seen contractors who have done it,” said Aaron Witt, who’s spent the past several years visiting hundreds of contractors as CEO and founder of BuildWitt, the renowned social media/marketing force that just expanded into training. “It’s being done on an individual contractor level.”
So, who are these contractors, and what are they doing?
Let’s look at five contractors who are not only meeting the challenge of attracting people, but they are also doing it during exponential growth. They are:
- W. Matthews Contracting Corporation, a $500-million-plus heavy civil contractor in Marietta, Georgia, with 1,400 employees.
- Hoopaugh Grading Company (HGC), Charlotte, North Carolina, which has grown from around 400 to 700 employees in the past two years.
- Sargent, a $170 million, 425-employee excavation company based in Stillwater, Maine.
- Schlouch Incorporated, Blandon, Pennsylvania, a $100 million site preparation firm with 285 employees.
- Turner Mining Group, established in 2017, with 300 employees. The Bloomington, Indiana, company recently created Turner Staffing Group.
None of the following ideas are easy buttons, but rather show how the industry can take a calculated approach on dealing with its workforce issues.
“I believe construction’s people problem can be overcome in just a few short years, because we’ve seen contractors who have done it. It’s being done on an individual contractor level.” -- BuildWitt's Aaron Witt
RECRUITING
It all starts with culture.
“We lead with our hearts,” said Barry Schlouch, president of Schlouch Incorporated. “We intentionally care for one another each day.”
Turner Mining’s values also emphasize care. “We start with good human beings first,” said Thomas Haun, formerly with Turning Mining Group and now president of subsidiary Turner Staffing Group. “We say we have a heart for people, an eye for safety and a mind for innovation.”
“As an employee-owned company, everything is driven by what everyone does, so we really push the idea of bringing value to each other every day,” said Herb Sargent, president and CEO of Sargent.
Plant seeds early.
C.W. Matthews hired a former teacher, Jeremy Whitaker, to serve as its recruitment and development manager and liaison with area high schools. “He’s just amazing at what he does, and he has a great connection with schools, teachers and students,” said Dan Garcia, C.W. Matthews president.
These efforts have paid off. “In three years, we have had more than 100 high school students join our workforce full time,” Garcia said. The company’s work-based learning program currently has 25 high school students. During their junior and senior years, they spend a few paid hours at the company each day. The next step is a summer internship, working with company crews.
“Our retention rate for these young men and women is much better than the retention rate for someone who’s worked multiple jobs elsewhere,” Garcia said. “We don’t want to be Plan B; we want you to see the opportunities you have with us.” For example, a 23-year-old graduate of the program just made foreman.
Inclusiveness is a must.
Studies show that coveted Gen Z (ages 18 to 25) workers find it important to work for companies that care about diversity, equity and inclusion.
“Talented human beings are as diverse as the planet,” Haun said. “If we’re just going to our established networks, we’re not reaching people where they want to be met. I think it’s a lack of strategic effort.”
And that’s to the industry’s detriment, Haun pointed out. “Those individuals will bring a different set of thoughts to the jobsite,” he said, adding to a company’s overall problem-solving capabilities.
“We want to make sure we’re showcasing the diversity of our team and changing the narrative that our industry isn’t for everyone,” said Brian McManus, HGC’s president. “If you work hard and have a positive attitude, there are endless opportunities for you.”
The golden recruiting goose: do great work.
Reputation is foundational. “You get found out about,” Schlouch said. “Great people want to be part of a great organization and to be a great organization you must do great work. It’s the work that creates the belief,” he said, pointing out that 80% of a recent new hire group came to the company through referrals.
Keep recruiting through good and bad times.
“During the last recession, we stayed away from the draft for about four years,” Sargent related. “It was a big mistake.”
That lesson learned prompted Sargent to develop a high-school-graduate training program, called Sargent Construction Academy, making students immediate employees while they’re going through a six-week training that houses them in the dormitories of a local university. “Through the years, we’ve retained about 50% of the 50 or so students who’ve gone through the academy,” Sargent said. “If we didn’t have them, we’d really be hurting right now.”
Don’t take yourself too seriously and try new ideas.
“We want to have fun,” Haun said, which prompted Turner to start its Turner Mining Live podcast. “Our Instagram Lives are very unfiltered.”
Other contractors are making their mark in the podcast space, including HGC, whose “Give us the Dirt” podcast has been running for more than a year.
“Our vision for the podcast wasn’t to make it about us,” said Brandon Lindsey, HGC’s vice president of operations and host of Give Us the Dirt. “We wanted to create a platform for other companies to share the stories of the men and women who built this industry. They’re the reason we’re all here.”
Attract attention through social media.
Turner gained notice early on for its use of social media. “Our goal has always been to attract attention, both in recruiting and from a client perspective,” Haun said.
But don’t think of it as just a Gen Z recruiting tool. “There are people who are already in this industry who are looking for more opportunity and community,” Haun said. “It can’t be overstated: Meet people where they are.”
Pay attention to the platforms your people are referencing in casual conversation. If they’re on a new platform, consider dipping your toe in the water. “It’s more about adding rather than switching,” Haun said.
For example, HGC started using TikTok this year to showcase its team, its Cat simulators and HGC Academy.
Schlouch added a different take on social media. “The spouses and the children of our employees are our number one audience for social media,” he said. “We want them to know what we’re doing.”
The opportunities may surprise you.
“We have an amazing community of people who interact with us regularly,” Haun said. The one problem: there were not enough Turner Mining jobs to use them all. So Turner Mining just opened Turner Staffing Group supplying contract workers to the mining industry.
“It creates a continuous opportunity for talent,” Haun said. “We’ve done it for Turner Mining and now we want to do it for the industry as a whole.”
“Focus on the advantages that people bring over machines: critical thinking, creativity, collaboration and communication.” -- Trimble Civil Construction's Cameron Clark
RETAINING
These tactics do no good if a company cannot keep its people. Here’s how our experts do it:
Train, train, train, train, train.
“Imagine a sports team that doesn’t practice during the week,” Schlouch said. He advises contractors to take whatever they’re currently investing in training “and triple it.”
Schlouch laid out every company role. “It’s like Math 1, Math 2 and Math 3,” he said. “You don’t get to Math 3 until you’ve gone through one and two.”
In 2021, HGC opened a 20,000-square-foot training facility that houses three training rooms, three Cat simulators and a podcast recording studio. “It really separates us and helps attract and retain talent,” says Katie Page, its Director of Team Development. “It’s cutting edge, and there’s nothing else like this in our industry!”
On-boarding: taking the time to build trust.
Sargent new hires receive a “success statement” that details what success looks like in areas such as attendance, respect for others and care of equipment.
During the next 90 days, new employees are judged and advised using a green-yellow-red system on each criterion. “In the past, we had a half-hour orientation and then they were on the jobsite,” Sargent said. “This is much more intentional.”
Incoming personnel need someone to show the way every day, Schlouch said. “They deserve it. They also need to be surrounded by great people.” And he argued that it takes five years to get someone truly integrated into your culture. “It’s like joining a family. It takes time to build trust,” he said.
Know up front that it won’t be cheap.
Sargent estimates that it costs $15,000 for each employee that goes through its six-week Sargent Academy. The ROI, though, can be earned through efficiency improvements, he maintained.
“We do about $170 million a year in revenues and spend about $80 to $100 million a year in labor and equipment,” he said. “So, if we improve our efficiency by 5% on $80 million, that’s $4 million. In time, I believe we’ll see significant savings.”
Something outside of the box?
HGC trainers use a 12-foot-by-12-foot sandbox that can be subdivided and nine remote-controlled construction models to offer a bird’s eye view of a project. “Being able to scale it down helps our operators understand the bigger picture,” McManus said. “From site setup to communication strategies, it really connects the dots for our team to see how each part impacts the other part of a job.”
Forget signing bonuses. Consider a retention bonus.
C.W. Matthews looked at offering signing bonuses and decided it wasn’t a fit. “We instead wanted to reward the people who have stayed loyal,” Garcia said.
So, the company split $1 million between all hourly employees who worked between April 1 and October 1, 2021, based on the number of hours worked.
The 30-to-120-day period is when C.W. Matthews was seeing the most turnover. “We want to get them through that initial period so they can see that the opportunities are there,” Garcia said. It was so well received the company plans to repeat it this year.
Technology can give a leg up on competition for workers.
New hires appreciate that a company keeps up with technology, Sargent said.
“Technology will allow people to transition out of the mundane and repetitive tasks,” said Cameron Clark, earthmoving industry director at Trimble Civil Construction. “You can focus on the advantages that people bring over machines: critical thinking, creativity, collaboration and communication.”
“Operators with an understanding of machine technology, its benefits and applications will have an advantage in the marketplace,” said Jason Hurdis, global market professional at Caterpillar. He’s seen new titles evolve, including “telematics manager” and “technology and innovation implementation lead.”
Consider an employee’s spiritual needs.
“Pastor Todd” is now a part-time employee of C.W. Matthews. “Everyone has something going on, and we wanted someone that could be there for the employees,” Garcia said. “It’s been one of the best decisions we’ve made.”
The initiative came out of a dark time for the company: the death of an employee on the job. “We brought someone in to help minister to the crew, and while he was good, he just didn’t know the people. This way they have someone they know that they could go to.”
Track your hire/retention rate.
Garcia gets a hire/termination report every week that details the reasons why people have left the company.
“We also want to reward foremen that retain their employees,” he said. “I’m convinced that the reason a person stays or leaves is because of their immediate supervisor. We have several supervisors who have a retention rate of 90% or higher.”
Nothing replaces connection.
Since we’ve been hearing from some of the larger firms in this industry, you could dismiss these examples as big-boy practices. But connection underlies everything.
“It boils down to caring for and knowing your people,” Garcia said. “We can do a lot of things as a larger company but none of it replaces the connection between the immediate supervisor and the employee.”
And know there’s no finish line. “Retention is earned on a moment-by-moment, day-by-day basis,” Schlouch said. “You’re earning the right to retain that person by what you do. You don’t get them and forget them.”
“If you work hard and have a positive attitude, there are endless opportunities for you.”-- HGC's Brian McManus
Want to learn more?
Many would agree that a transformation of the construction industry has already commenced. Technology is changing the way buildings are designed, equipment operates and organizations function. Renewable energies are being leveraged more often and in more ways. A generational shift in the workforce is already underway.
AEM Vision Team and Futures Council members spent countless hours discussing how these influences, among many others, could transform the construction industry over the next 10 years. For more information on The Future of Building and other trends impacting the equipment manufacturing industry and the customers it serves, visit aem.org/insights.
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