Hiring and Retaining the Right People

(Excerpts from the U.S. Construction Industry TalentDevelopment Report from FMI)

Agenda

• Preparing for a Changing Workforce• Finding and Retaining the Best Talent• Survey Respondent Data• Talent Development Practices• Succession Planning

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The Changing Workforce:

Retaining Employees of

All Generations

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• What challenges do you face in retaining different generations?

• What tactics have you used to attract Millennials?

• How would more effectively leading different generations help your organization?

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Retaining Employees

Generationsof all

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© FMI Corporation 2011

Factors Driving Motivation

Personality Type

Generational Peer Group

MillennialsXersBoomersSilents

Life Stage

Exploring Nurturing Taking Charge Re-Evaluating

Career Stage

Recollecting

Beginning Launching Plateauing Managing the Doldrums

Sorting Things Out

Restructuring

20’s 30’s 40’s 50’s 60’s 70’s

1925-1945 1946-1964 1965-1980 1981-1999

Generational Source: “Generations” by William Strauss and Neil Howe

Life Stage Source: Elizabeth Kubler-Ross

Career Stage Source: Hudson Model – Frederic Hudson

E or I S or N T or F J or P

Reflecting

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Leading Boomers

Lead Boomers by:omer b :oomBecoming a coach

Facilitating,Facilitating,not dictating results

Offering themOffering themflexibility, authorityexibility, authori

and respect

Challenging themChallenging themto keep growing to keep growing

(in their own way)

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From Hanson Dodge Creative. 2013

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A Millennial Scenario

Chris23 year-old estimator

Chris is just out of college and has an overly optimistic view of his chances of promotion. He has explained that he took the job because it allows for time for him to spend in competitive mountain-biking, but the pace of the organization is too slow for him. You want to keep Chris because he is a hard worker and has great long-term potential with the organization, however, he has grown increasingly frustrated with how things work there.

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Why do people leave?

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Top 10 Reasons Construction Company Executives Leave

1. Relationship with immediate supervisor

2. Better or meaningful job opportunity

3. Personal or family reasons

4. Job security

5. Increased compensation

6. Incompetent leadership

7. Job autonomy, flexibility, and quality of life

8. Ethics, integrity, and values

9. Lack of recognition and appreciation

10. Stock ownership opportunity

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Why “Twenty-Something” Employees Leave

1. Limited career growth

2. Lack of promotion

3. Low pay

4. Poor treatment from managers

5. Lack of recognition

6. Lack of regular feedback on work performance

7. Stress, especially caused by understaffing

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Why would they stay?

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You are the “Employer of Choice”

Especially for Millenials

Motivating & Retaining Millennials

• Workrk-k-life Balance• Meaning & Passion•

gTraining & Development

•g p

Mentoring & Coaching•

g gStretch Assignments

•g

Career Progression•

gInternational Assignments

•g

Rotational Assignments•

gInstant Feedback

• Flexibility15© FMI 2018

Leading Millennials

Lead Millennials by: Putting them in rolesPutting them in rolesthat push their limits

Treating them asTreating them asprofessional colleagues

Keeping them focusedKeeping them focusedwith speed, customizationh speed, customizat

and interactivity

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Workforce Demographics/Trends

• 20% of management or supervisory positions are held by Hispanic descent employees

• 10% of management or supervisory positions are held by women

• The percentage of women working in the construction industry has risen from 5% to 8%

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Internships and Co-Ops

• National Association of Colleges and Employers’ 2011 Internship and Co-Op Survey– Increase internship hiring by 7% this year; Co-ops 9%– Full time offers to interns 67% of the time– After one year, retained at 75.8%; new hires recruited

without internship/co-op experience retained at 60.7%• Benefits

– Increased retention rate– Reduced training periods– Improved personnel selection

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Best Practices to Attract and Retain

• “There are so few of us left after the last three years that we are all cross-trained into all other jobs. In order for the company to succeed, everyone must perform. In order to keep the benefits employees like, the company must succeed.”

• “Accessibility of upper management mentoring and having fun in a not so fun industry.”

• “Clearly indicating that we promote from within and that it’s talent, not seniority that gets you there.”

• “Hire the right people, pay them well. Recognize their achievements and allow them to grow and make mistakes they can learn from.”

• “We encourage our employees to rotate through positions – project management, field supervisions, estimating, etc. Broad exposure increases their knowledge of the business and keeps things interesting and challenging for them.”

• “Work with each employee individually and give them an opportunity to be what they want to be; helping them get there.”

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Training Budgets and Expenditures

• 81% of the survey participants indicated they prepare a yearly training budget.

• Percentage of payroll spent on training is higher in the construction industry than what other companies are spending at 3.3%.

• 73% of companies have decreased their budget since the recession.

Yes, 81%

No, 19%

Does your company prepare a yearly budget for training

activities?

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Talent Development Practices

• Annual Performance Reviews– 83% of respondents continue to perform an annual review.

• Performance Culture: one in which employees are motivated to perform at the highest levels of their ability, with resulting excellence in organizational outcomes. – Set clear, realistic expectations.– Provide feedback regarding how effectively people are meeting

those expectations.– Ensure appropriate consequences for behaviors and/or outcomes.

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Talent Development Practices

• Training– According ASTD’s 2010 State of the Industry Report”

• U.S. organizations spent $125.88 billion on employee learning and development.

• Nearly two-thirds of that total was spent on internal learning while the remaining amount was allocated to external services.

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Talent Development Practices

• Personal Development Plans– Extension of performance review

process that allows manager and employee to identify and advance towards reasonable developmental goals.

– Advantages include: improving performance and enhancing knowledge by promoting a climate of continuous learning and professional growth.

– Gives employees the responsibility for their own personal and professional development.

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Talent Development Practices

• Web-based Training– Increasingly popular over the past few years.– Benefits include reduced travel expenses, less time away

from the job and just-in-time. – Certain topics are more conducive to learning through this

type of delivery format.

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Developing High Potentials

• Identify the employees worth keeping.• Create development plans.• Determine current employee engagement level.• Stretch employee development.• Make learning a priority.

p y g gyee development.

g a priority.

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• Have informal and regular conversations with your keepers.

• Allow boomerangs.

??

Best Practices in DevelopingHigh Potential Employees

• “Identify high potential people, tell them and then carefully select various work experiences with development in mind and promote and increase salary at a faster pace.”

• “Our Talent Management process includes a talent review whereby all employees are ranked and their strengths and weaknesses discussed, with a development plan then prepared for each individual. This process identifies high performers and they are included in a leadership mentoring program, whereby each individual is assigned to a company leader to be mentored for one year with quarterly reporting on results, things learned, etc.”

• “We have a leadership development program that targets high potential employees who are part of the succession process. More than 50% of our current senior management of the company has participated in (or is currently participating) in this program.”

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Succession Planning

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New Challenge and Opportunities

• Transferring ownership to a new generation of leaders.

• Capturing and embedding the cumulative knowledge of outgoing employees.

• Developing intentional, purposeful succession plans.

• Growing high-potential employees' ability to lead versus manage and think strategically versus operationally.

• Preserving organizational culture so it can be propagated for future generations.

• Shaping business models to meet the demands of a volatile and uncertain market.

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Recommended Reading

• Managing the Millennials: Discover the Core Competencies for Managing...

by Chip Espinoza

• Not Everyone Gets A Trophy: How to Manage Generation Yby Bruce Tulgan

• Y in the Workplace: Managing the "Me First" Generationby Nicole A. Lipkin

• The Generational Imperativeby Chuck Underwood

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Biggest Leadership Mistakes30© FMI 2018

Implications for Future Leaders

Need to Think Differently y –– Strategically

Understand how to Motivate and Inspire

Importance of Development of portance of DevelopmentIndividuals vs. People

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About FMI

FMI is a leading provider of management consulting, investment banking† and people development to the engineering and construction industry. We work in all segments of the industry providing clients with value-added business solutions, including:

• Strategic Advisory

• Market Research and Business Development

• Leadership and Talent Development

• Project and Process Improvement

• Mergers, Acquisitions and Financial Consulting†

• Risk Management Consulting

• Compensation Benchmarking and Consulting

Founded by Dr. Emol A. Fails in 1953, FMI has professionals in offices across the U.S. We deliver innovative, customized solutions to contractors, construction materials producers, manufacturers and suppliers of building materials and equipment, owners and developers, engineers and architects, utilities, and construction industry trade associations. FMI is an advisor you can count on to build and maintain a successful business, from your leadership to your site managers.

† Investment banking services provided by FMI Capital Advisors, Inc., a registered broker-dealer and wholly owned subsidiary of FMI.

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