Staffing Fundamentals

Attracting and hiring good employees is, I think, a lot like what we do with our clients; it’s lining up expectations with reality,” says David K. Bryan, president of Black Dog Design/Build/Remodel in Salem, N.H.

Nevertheless, finding good employees is a challenge for many remodelers, judging from a survey recently completed by Qualified Remodeler. Asked about the quality of applicants, 82 percent of respondents find it fair to poor, while only 18 percent say it is good.

Further, 70 percent report that fewer than a third of applicants were qualified for the positions to be filled. Seventy-two percent of the survey respondents say the quality and skill level of applicants had decreased over the past five years.
Despite these negatives, conversations with successful remodelers suggest that finding qualified employees is not a universally bleak experience. In fact, established, well-organized firms may have an easier time of it, with their reputation attracting employees in much the same way as it attracts clients.

That’s not to say smaller firms can’t do well in personnel matters. “We’ve seen smaller companies that have strong people management systems in place even though they only have a handful of employees. The have job descriptions; they have a regular review process, and they have a recruiting program that keeps them on the lookout for good hires,” says Janna Mansker, partner, The Berke Group, an Atlanta, Ga.-based consulting firm specializing in employee selection, management and retention.

“They have all the stuff the big ones have,” she says. “They realize that they’re a lot more attractive to applicants when they have their act together on the people management side. They attract higher caliber candidates and get a reputation for a small company that works like a big company.”

One of the issues with smaller firms is that basically all the management and human resources activities are done by the owner, and there are probably a lot of other things he’d rather be doing than putting together job descriptions, doing reviews and training people, Mansker says.

However, she adds, there are a lot of people who will do HR on a contractual basis. They’ll audit files to make sure, from an administrative standpoint, that everything is compliant, and from a strategic standpoint they’ll help map a firm’s organizational structure, she says. She cautioned that if remodelers do look at outsourcing the HR function, they should look for a firm that can address the strategic and organizational issues as well as the administrative functions.

“It may seem silly if you only have six people to have an organizational chart, but even in a company that small I sometimes see that the lines of reporting are a little blurry; the owner may have hired someone for a supervisory role, yet that person is frustrated when people go around him to the owner, because the people below him don’t really see him as their manager,” Mansker says.

Dave Frye, vice president of Dover Home Remodeling Inc. in North Olmsted, Ohio, agrees with Mansker on the importance of reputation and image. “We’ve been around long enough and have established a very good name in the market, which I think has a tendency to draw people to us,” he says.

Frye noted that Dover, which had gross sales of $5.97 million in 2006 and employs almost two dozen people, is a “small organization that has a family atmosphere so there’s a sense of belonging,” a factor that makes it attractive to applicants.
Likewise, the company’s showroom, which serves to tell the firm’s story to potential clients, also sends a message to applicants about how the company likes to do business when they come in for an interview, Frye says.

Networking

He also noted that Dover has been in business long enough to have established a wide network of trade associates that tend to spread the word about how the company operates and its philosophies. Applicants have said they were recommended to the company because of its reputation, he related.

Existing employees also recommend new hires. “We like the idea of them referring people; there’s kind of an ownership involved. When someone they referred gets a job, they take them under their wing,” Frye said.

Indeed, networking and word-of-mouth advertising are the most common way remodelers fill positions. Fifty percent of those responding to Qualified Remodeler’s survey indicated that this was their major source of applicants, followed by 25 percent who utilized newspaper classifieds.

Robert McCrensky, president of Hancock Building Associates in Chelmsford, Mass., however, notes that for his firm referrals don’t seem to be working as well as they did in the past. Geographically targeted classified advertising, however, has been effective for Hancock. “I advertise in areas where trades people are likely to live,” he says.
Hancock’s gross sales for 2006 were $6.2 million. The firm employs about 30 people.

Black Dog Design/Build/Remodel in Salem, N.H., isn’t among those firms that have found the labor pool deficient and hasn’t experienced unusual difficulty in finding qualified team members, according to David K. Bryan, president. “I’d actually say we had the best fortune we’ve ever had in finding qualified team members in the past several years,” he says.
Black Dog’s gross sales for 2006 were $5.7 million. The firm has almost 40 employees.

Fault may be Internal

Bryan theorizes that the problem for many companies may lie not entirely in the labor pool but in their own internal structure and practices. Some companies, particularly smaller ones, he says, “expect more than is reasonable from a candidate and are trying to plug an employee into a company that may not be systemically defined and may not be well organized. [They] hope they hire a good candidate; then they throw him into the mix and hope he swims. The reality is they may have hired a good candidate but they may not have enough structure and organization within which that person can thrive.”

Many would-be employers approach the interview process from only one perspective — their own, says Bryan. “I think very often employers may perceive they have all there is to offer and they’re bringing something to the table and that the candidate is lucky if they even consider them for the position. I think it’s a common perspective but I think it’s a short-sighted one; it doesn’t get you the ideal relationship; it starts the process out on an uneven footing,” he explains.

Black Dog has job descriptions and clearly defined expectations, Bryan relates, but also focuses on the company’s culture during the interview process to make sure candidates know in advance what kind of company they will be working for and whether they will be comfortable in those surroundings.

Hiring for Black Dog is a multistep process. For a field position, a candidate may be interviewed by one or two project managers and then a department manager. Bryan will typically conduct the final interview. “I mostly talk about the culture of the company and what we’re all about to make sure this is a company that they want to be involved in,” he says.

“It’s really helpful to have a multiple-step process because everyone sees different characteristics, different strengths and weaknesses,” Bryan says.

Retaining Employees

While a remodeling company needs to be concerned with paying a competitive wage, retaining employees involves a great deal more than that. For Bryan it’s about a culture and environment that recognizes and appreciates contribution. “People want to feel like their voice is being heard and they’re making a contribution that matters,” he says. “They want to feel that if something is not right with the company, they have the power to effect change.”

Recognizing employees’ achievements and contributions is part of Black Dog’s monthly — sometimes bimonthly — meetings. One regular part of the agenda is “Nines and Tens,” a name derived from the score Black Dog strives to earn on its client surveys. Nines and Tens recognizes employees who have done something out of the ordinary, even if it’s something as simple as stopping to help a client bring in their groceries or helping a client’s child with a school project.

While top remodelers concur that letting employees know what is expected of them is a key factor both in hiring and retaining workers, only 57 percent of those responding to Qualified Remodeler’s questionnaire said they had written job descriptions. Slightly less (54 percent) had any sort of formal evaluation or review process.

Recognizing employees for special achievement was an even lower priority, with more than 80 percent of remodelers answering that they had no formal programs, such as employee of the month.

Regardless of the method, communication with employees is a crucial aspect in retaining them. “What people want most is good feedback,” Mansker says. “They want to know at all times how they stand in the company; if they’re doing great they want to know; and if the company is not happy with them they want to know it.

“It’s the personal stuff that people want — the conversations, the input,” Mansker says. Formal reviews are only a part of it. “If you’re giving people good consistent, open feedback all along the way, a review should be nothing more than a recap. There should be nothing in there that should surprise [the employee], nothing that’s covered for the first time,” she adds.

In the area of communicating expectations, Dover Home Remodeling has created a “policy book” that contains very specific job descriptions as well as policies concerning sick time, car allowances, etc. “That’s something I would suggest any new remodeler do right away,” Dover’s David Frye said. “It conveys our concern about [our employees].”

The policy book figures in the interview process as well. Potential employees go through several interviews before being offered a position, Frye said, and at some point they are asked to take the policy book home to see if there are any questions and to ensure that they are comfortable with the company’s policies.

Frye is s firm believer in hiring slow and making sure the applicant is a good fit. Interviews with several persons may reveal different viewpoints. “It’s a team effort to hire the person who will fit,” Frye said. “The fit has to be not only good for us but for the employee that’s coming on board,” he said. “Neither party wants to say three months from now that this just didn’t work out.”

Dover even has potential employees go out with a salesperson in the field to make sure they’re getting their questions about the position answered. “And while they’re asking questions, our employees are getting an opinion of them and relaying it back to us,” Frye noted.

The interview process is a two-way street, Frye observed. “As we’re gathering information about them, they’re gathering information about us. We certainly want them to get an impression about us, and if at any point they say I just don’t think I fit your company’s philosophies, better then than three months into the employment process,” he said.

Structured Approach

Building Specialists, Inc. of Roanoke, Va., is a $5.75-million company that’s taken a structured approach to communicating with personnel once they’ve been hired, implementing a performance management system that PRobert Fetzer, president, credits with being a key element in the company’s recent development. “We had some challenges with growth and performance, and I felt we had to get this system in place,” he said.

Fetzer worked with a consultant to set up job descriptions for all categories from carpenter’s helper to vice president. The firm currently has about 20 employees.

We sit down with each employee and go over their job descriptions and performance standards, and get their take on what they’re doing as well as what our expectations are, Fetzer explains. “It’s really a very good system that helps you gauge and reward good performance and also assist those employees who may not be at a standard that you’re hoping they’d be,” he says.

Remodelers compete with other industries for employees, and offering competitive benefits is a key factor in attracting and retaining top employees, according to successful remodelers. However, respondents to the Qualified Remodeler survey indicated that about a quarter offered insurance and only 15 percent offered profit sharing.

“We offer health and life insurance, tuition assistance, and paid holidays,” Robert Fetzer notes. Likewise, Hancock Building Associates offers medical coverage, paid vacations, sick days, and company vehicles for key employees.

Most important, and perhaps most obvious, is a regular paycheck. “I always feel that a young family should be able to bring home a check every week; that’s why I have worked year-round even in the winter,” says Hancock president, Robert McCrensky.

“We try to assure our workers of year-round work.” Fetzer says. “They’re not signing on for just one project; they’re signing on for a future, for a career.”

The downside, of course, is that while good benefits help retain employees, they also drive up overhead and increase the challenge of competing with companies who offer fewer benefits or subcontract much of their labor.
Still, McCrensky prefers it that way. “They’re all my own people so I can control the quality very well, which is a plus,” he says.

Fetzer, too, sees the investment in employee selection and retention as a core issue. “We’re in a service industry where the only thing we have to offer is the quality of our work. Our employees make us; it’s absolutely crucial that we deliver the promise of quality,” he says.

Making the right hiring decision is a critical financial decision as well. “It costs a lot to hire new employees,” Fetzer says. Make a wrong decision and “you’re doing damage control years down the road. A new hire is a big deal, and we take it very seriously,” he adds.

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