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Focus - Service Providers - Clients changing to attract talent

image David Reynolds, CEO/Founder, DP Reynolds & Associates, Lewisville, TX

DALLAS/FT WORTH - How would you describe the state of the construction industry in general terms? A lot of regions across the country have awakened in terms of overall construction, especially commercial. Dallas and Austin continue to be boom markets as hospital-ity, healthcare, office, higher education, high-tech and high-rise residential are all under construction or are in the planning stages. Houston’s K-12 cycle remains on the high end.

 

 

    Incoming phone calls and emails re-questing assistance have spiked tremendously since the first of the year. I believe human resource departments were trying to keep within their recruiter budgets in 2016 but have since become overwhelmed by the hiring authority’s demands due to projects and the lack of quality talent. They are now reaching out more than ever for assistance at this point.

What factors are driving this?
    The demand placed on us for finding people within the construction market is driven by consumer confidence in spending money, which ultimately drives building.
    Specifically for the Texas market, I believe we may be seeing the effects that Texas is truly a business friendly state where there are fewer interferences for businesses, which may be reason for the unprecedented growth in our state. I’ve read studies and hear various opinions and forecasts from construction executives that I speak with daily that market optimism in the fourth quarter of 2016 took on an even greater intensity in the first quarter of 2017, reaffirming my company’s spike in emails and phone calls this year. There also seems to be growing belief among these industry executives that the market will continue to expand at least through the middle of 2018. Coupled with material costs increasing (e.g. steel, concrete, copper), the lack of skilled labor could cause a slight slow-down in the market among quality builders unless owners/equity groups are willing to spend more money to continue hiring the best builders for their investments.

How has this affected your company and how you conduct business?
    Simply put, the demand for people allows us to narrow the scope of the quality of clients we work with.
    Currently, we are generally able to be selective in working with only clients that have an overall good reputation within the industry. A good indicator is a general contractor that has an impeccable reputation with subcontractors or subcontractors that have good reputations with general contractors. If a general contractor client treats their subcontractors well, they typically treat their employees well. For us, this brings an intangible value into play that a passive candidate may not have within another work environment. They may be compensated well, but a taxing workload and not feeling well about their day-to-day treatment can make them vulnerable to thinking about a move.

What are major changes in the industry in recent years relating to the type of work that you do?
    Every emerging generation brings new challenges. The advancements in technology have introduced a generation of candidates in the work force that are often expecting to have instant success, structure and flexibility within their work environments. If you think about it, those in the work force under 35-38 years of age enjoyed growing up with some of the most well-structured, organized youth leagues/activities and have played on or around some of the nicest facilities ever built to date. They are also able to obtain substantial amounts of data and information instantly from the comforts of their dorms or bedroom. They are carrying these modern-day luxuries into today’s workforce.
    I’m seeing frustrations in both the candidates and top executives, which I feel is driving down workplace tenure averages. Loyalty is almost non-existent in some cases we are witnessing. This ultimately hurts both sides but especially our clients as projects ultimately suffer.

What is the most significant challenge your industry faces?
    There is a definite skills shortage being felt in the industry, coupled with a tightening of immigration policy by the Trump administration, which may increase labor costs. Clients are being forced to become unique in attracting the level of needed talent. That said, we’re not only focused on clients that have up-to-date market compensation packages, but also have a lot to offer besides compensation.
    Regarding the passive candidate, we find they are typically well-compensated so additional attractions (e.g. fostering of a true work/life balance, project types, a true family feel to the work environment, flexible hours, unique personal office spaces, how a client treats their subcontractors, etc.) are often the appeal that will at least help us in getting them in front of a client.

What are the cost increases?

    We are spending a lot more time and effort in finding a passive candidate who is an actual fit and who is seriously ready to listen and explore. Also, due to an aggressive labor war in the market, by the time we uncover or have someone within our network ready to present to our clients, the candidate may have another offer or two in hand from other directions. At this point, we’ve spent a lot of time, energy and effort in trying to close these deals, sometimes to no avail.

How are you dealing with these challenges?
    We try to do all that we can to help educate our clients as to what we are seeing in the market (e.g. unique salary adjustments that aren’t costing any more money to the client, unique ideas as to what the younger generations are truly looking for, etc.) and, sometimes more importantly, to efficiently get good offers in front of a candidate they feel has the skillsets they need.

What is on the horizon?

    Again, treating others the way we want to be treated, forming and nurturing relationships long-term, in my mind, are the key components to our success but also keeping up with market trends.
    DP Reynolds & Associates is a professional labor recruitment firm specializing in construction, including new commercial vertical construction, manufacturing/heavy material handling and infrastructure. –mjm


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Melissa Jones-Meyer dfweditor@constructionnews.net