Features: Issues & Trends — May/June 2007

Winning the War on Talent

Contractors must be great employers, not just great builders, to find and retain the best talent

By Mary Buckner Powers

In a call to action during the Associated General Contractors of America’s annual meeting in March, the Building Futures Council’s message was clear: The engineering and construction industries must change with the times so they can compete effectively with other industries for talented people in an ever-shrinking pool of human resources.

In a white paper, “The War for Talent,” which was released at the meeting, the council said the industries must stop debating the issue, take an honest look at their traditional resource management practices and make necessary changes if they are to attract and develop young people. The council added that the construction industry, along with its associated engineering and architecture industries, is losing the war.

College students are choosing other paths of study. Enrollment in architecture, engineering and construction management programs is healthy but flat, and many who are going into construction-related college programs are joining other industries when they graduate.

Christian Smith, Amy Bennett, Sebastian Doucet and Eric DeGrottle, seniors at Florida Institute of Technology, entered their team’s design of a marine operations center in the school’s Senior Design Showcase for Civil Engineering. Industry professionals judge the designs. Area high school students are invited to tour the campus and view the projects to inspire interest in the engineering profession. Photo courtesy of Florida Institute of Technology

To make matters worse, the construction industry will create nearly a million jobs in the next seven years while the primary working age group is projected to decline by about three million. About 25% of the engineering and sciences workforce is older than 50 and nearing retirement, according to the “U.S. Construction Industry Talent Development Report” issued by management consultant FMI in April.

“With the reduction in available workers and the improving job market, many organizations will not only find themselves losing their stars to their competitors but also having a difficult time replacing this talent,” the FMI report says.

Today’s industry leaders either are not aware of the problem or they are not as talented at managing human resources as they are at managing projects, says John Hughes, manager of consulting for RSM McGladrey, a business consulting, accounting and tax firm in Minneapolis.

Ralph Locurcio, retired brigadier general with the U.S. Army Corps of Engineers and a professor at Florida Institute of Technology, says, “The war we now have for talent may be a result of our poor leadership. We’ve failed to attract people to our profession.”

The battle for talent has three fronts: attracting new talent, retaining the best workers and developing the next generation of leaders.

“Young people don’t see the construction industry as glamorous,” Hughes says.

Same Old Image

The image problem has been talked about for years among such industry leadership groups as the Construction Industry Institute, Construction Users Roundtable, Construction Management Association of America and others, says Tom Emison, director of strategy and human capital consulting at RSM McGladrey and co-author of the “War for Talent” white paper.

Industry needs a campaign to change its image and promote itself as a high-tech, sophisticated career choice, Emison says. “It needs a profound paradigm shift to focus on sustainability. The individual firm against the world isn’t going to cut it. The only way to win this war is on a company level. Human capital management has to be a priority.”

Companies can no longer just focus on winning the next building project. “They have to learn how to retain great employees,” Emison says.

The challenge comes from companies being project-centered, says Hughes, Emison’s associate at RSM McGladrey. “Rather than thinking strategically about building a sustainable firm, company presidents are thinking about managing projects,” he says, adding, “Companies must be great employers, not just great builders.”

Shift in Values

Washington Group International employees (from left) Lika Alaverdashvili, Gloria Johnson, Jose Cortes and Bob Kistler participate in the company’s Leaders Forum, a weeklong employee development session. The program covers all aspects of the company's business and strategy and is designed to refine leadership skills. Courtesy of Washington Grouop International

One of the biggest issues facing the industry is the older generation’s failure to recognize that young people today do not have the same values as the baby-boomer generation or the one before it, says Todd Pennington, executive vice president of Bovis Lend Lease in Los Angeles and co-author of the white paper.

“Loyalty isn’t what it used to be,” he adds. “Members of Generation X and Generation Y aren’t ‘company men.’”
The point is illustrated by nearly half the engineering students surveyed for the white paper who said they expect to work for their first employer for five years or less.

The next generation of engineers and project managers also is not as mobile as previous generations. “Mobility used to be the excitement offered by this industry, but now most families have two incomes, so moving around is no longer a benefit,” Pennington says.

Young people also are more demanding of future employers. “They want signing bonuses, car allowances, moving expenses and a guarantee of further education,” Pennington says.

To most students coming out of school, balance is essential in life, and they are not 100% committed to work, says Pennington. “Now when I’m interviewing candidates, I realize they are interviewing me,” he says.

The survey also found that 86% of college students are considering going to graduate school, 16% are considering careers outside traditional A/E/C jobs and less than 30% of engineering students plan to purse careers in construction.

A glaring example of the problem is in New York where the consulting firm Accenture of New York City hired more architecture students last year than any other firm. “They want creative thinkers,” Pennington says.

Companies in the construction industry must change their hiring practices and “look at people as precious commodities,” says Frank Bruckner, executive vice president of Kimmel & Associates, a construction recruiting company in Asheville, N.C. Otherwise, they will lose them, he says.

“If you’ve got someone who’s valuable, the competition is recruiting him. Believe me—I’m a recruiter,” Bruckner says.

Companies must keep employees challenged and trained if they have any hope to retain them as 20-year assets, and they have to offer young people more than the opportunity to be a technician, Bruckner says. “Big, progressive companies do it, and those are the companies that kids flock to,” he says.

The few companies in the industry that have changed with the times have made resource management a strategic priority.

Washington Group International, an integrated engineering, construction and project-management firm headquartered in Boise—and an AGC of Idaho member—has spent the money necessary to keep its talent. “We prefer to focus on employee development,” says Larry Myers, senior vice president, human resources. “It’s a hallmark of ours.” 

Last year WGI spent $56.5 million in training and development, and much of that went to skills enhancement and leadership training, he says. “This intensity says we’re interested in people staying with us,” Myers says.
When WGI’s market breadth is added to its commitment to training, there’s no need for employees to look elsewhere for opportunities, Myers claims. By being in six major markets, the company can offer careers, not just jobs, and employees can move from market to market to develop their careers, which “helps with recruiting and retention,” he says.

Developing Future Leaders Ralph Locurcio, retired brigadier general with the U.S. Army Corps of Engineers and a professor at Florida Institute of Technology, says he was disappointed when he left the corps for the private sector. The civil engineer, who graduated from the U.S. Military Academy at West Point, says he did not understand why private company leaders did not stay in tune with younger people and give them the opportunities to influence the organization as a whole. “But I couldn’t gripe because the leaders in the company hadn’t been taught leadership,” he says. The military begins to develop its leaders when they’re young, and Locurcio says the only way for him to transfer that model to the private sector was to integrate it into the formal education of engineering students. He now teaches construction and leadership to seniors at Florida Institute of Technology.  “Engineers are increasingly becoming managers and leaders,” he says. Locurcio teaches students how to envision the whole of the project, which is a hallmark of leadership. “It engenders a spirit of quality that leads them to motivate the guy with a trowel in his hand,” he says.