Author: Chris Swan

** As published in Construction Executive

What is your strategy for human capital? At some point the conversation always comes back to people. Do you have the right people? Are they in the right roles? Are they energized to be efficient and profitable? Of course, many people will agree and in the next breath say that people are essential; but too simplistic. There are other factors to running and growing a business. For example, one of my executive candidates out of a top global engineering firm said to my client during an interview, “There is nothing worse than a business without enough backlog.” Even a dysfunctional team might work together well if there is plenty of work and everyone is busy.

The question that top executives should be asking is, “Why do my best people stay?” What does it take to keep the best employees engaged, enthused about the work, their individual status in the organization, and the positive WHY of the organization? We may all have our personal opinions and guesses about why people stay, but the best source of that information is the employees themselves.

Clarity in deciding who are the best employees is essential. This is a key part of the human capital strategy. Large companies may be particularly challenged with this question, because there are so many potential decision variables in the equation. In small companies it may be just one person. Jack Welch used a matrix of people; those who always delivered, or didn’t, and those that lived the values of the organization, or didn’t. Those who always delivered and lived the values rose the fastest, and the rest were encouraged or separated.

Many large companies in architecture, engineering, and construction are going through extraordinary change and consolidation. Challenged by outside forces such as - the shrinking in oil, gas and mining revenues, technological innovation, struggling international markets and a rising dollar - have put these companies on a turbulent path. Rapid change means that talented individuals are forced to seek greener pastures, often for the first time in many years. Evaluating talent that fits your business today means providing clarity about what it means to be a top performer. By asking your top performers “Why Do You Stay?” is a terrific first step in understanding the human capital value proposition.

Granted, priority one is a strong value proposition that is effective in the market. Attracting customers and delivering services to the satisfaction of your clients. Generating enough profit to sustain the investment of the shareholders. However, all of these tasks require talent. Some businesses that are the most challenged over the long run are ones that are led by technocrats who believe that everyone of importance needs to be an architect, an engineer or come-up from the field. Having the right people means understanding the tasks that need to be accomplished and having the best people to accomplish those tasks. Nearly always, the best people are the ones who love the work, are capable of doing the work, and are emotionally and mentally suited for the challenges. Clarity and decisiveness about what needs to be accomplished and the individual to best accomplish those tasks is critical.

Every contractor will tell you that if you don’t have the right controls, systems, and procedures in place, it is only a matter of time before the business will spiral out of control. The same is true for people. Without enough highly competent people that work well as a team, the business will not survive. Most businesses live on the edge of the talent gulf. Too much high priced talent and the firm isn’t commercially competitive, and too little, the risk of catastrophe is near. With commercial construction booming in many parts of the country and infrastructure spending slowly rising, craft labor is scarce and professional unemployment is near 2%. Employers are learning that they need to increase compensation to maintain the level of talent in their organizations, and to compensate they are focused narrowly on precise selection to increase value.

The most critical problems occur when the best people leave a firm. Institutional knowledge, positive culture norms, and practical know-how all walk out the door, rarely with effective systems to capture what was lost. Therefore, from an organizational perspective, the following questions are very important. What are the roles, responsibilities, competencies that are essential to success? For example, is a project executive spending 75% of his or her time directly with the project managers, going over project details and surfacing problems and solutions? Is that what we want and need, and why? Is there a better way? So few businesses are clear about expectations and the markers of success. Even fewer are focused on successful soft skills, such as collaboration, inspiration, or humor in the face of adversity.

Are the best people choosing your firm? Do you have enough work? Is your delivery world class? If the answers to these questions are not what you want to hear, then ask your people. If you do it in the right way, then you will have a road map for the future.