At long last, things are looking up for the U.S. construction industry. Signs continue to be positive for a recovery from the long recession, a difficult time that had both direct and indirect effects on the financial health of contractors. The direct implications can be seen in lower levels of working capital and other traditional measures of financial health of any business enterprise.
Indirect consequences can be just as critical in assessing a contractor’s opportunities for financial success going forward. One such area involves the retention and development of key management talent within a construction business. To ensure your company’s health in this critical area, here are several items to consider:
1. Conduct a talent inventory assessment.
How does your company shape up? Were decisions made during the recession that resulted in the loss of key talent? Are individuals who once filled these roles no longer available to bring back? If so, this could negatively impact your success going forward.
2. Determine the impact of a restricted available talent pool.
Workforce reductions generally occur during every recession. However, the 2008 economic downturn hit the U.S. construction industry with greater intensity and over a longer period of time. The dearth of available industry jobs led many would-be workers to seek employment in non-construction industry segments. That has created a gap that still needs to be filled. Additionally, Baby Boomers have increasingly left the labor market, further weakening the available talent pool.
3. Start identifying your key personnel needs early.
Don’t wait until you have an immediate need. Take time now to assess what personnel moves need to be made to build for the future. Then begin to identify appropriate opportunities to develop your talent internally, as well as how you will recruit new talent. Training will be key for both groups.
4. Recognize generational shifts.
In many cases, training initiatives that have historically worked well for Baby Boomers do not jive with the workplace attitudes and values of Millennials and Generation X. Address these issues by seeking younger candidates for key roles, and packaging your workplace environment in a way that will attract and retain the best talent from various age groups.
5. Do not underestimate the importance of succession planning.
Construction company ownership remained relatively constant over the course of the recession as opportunities to transition management to the next generation – whether to family members or to a team of nonfamily executives – were constrained. As the construction industry continues to emerge from the recession, we have seen an increased desire to address business succession. Getting the right management team in place is a critical component of this process. It instills confidence in your customers, credit sources, and vendors that your management team will lead the company to success going forward.
6. Emphasize flexibility and adaptability.
The business climate facing construction companies three years from now will present many challenges that did not previously exist. Successful construction companies will identify those changes quickly and adapt their businesses sooner and better than their competition. Using the past as a guidepost in setting your future course is no longer sufficient. You will need to constantly examine your current processes and develop your leadership talent with new skills.