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While no one wants an economic slowdown, it can provide companies with an opportunity to get ready for the future by increasing efficiency and improving systems with less disruption. After the Great Recession, the construction industry had to find ways to make up for the resulting worker shortage.
Today, contractors beginning to think beyond the coronavirus-driven downturn are facing the same issue. Even as project pipelines remain stalled, there is still plenty of planning companies can and should do to prepare for when it’s time to reboot — beginning with their human resources.
Labor makes or breaks performance for any construction business. The success of individual projects hinges on the effective engagement of people working in project teams. It’s why companies devote so much management attention to human resources. Smart companies see human resources as encompassing more than just the acquisition of people, but also their continued development and retention.
As an industry, construction has some unique challenges when it comes to managing talent. Collectively, we tend to accept that there will always be a carousel of people who frequently jump from company to company. This complicates the job of operations managers trying to proactively staff for project pipelines, resulting in subpar project management and execution, underinvestment in skills development and, ultimately, a ton of waste.
Effective resource planning needs to account for your values as an organization and how you approach working with customers while your tool needs to enable you to actualize those values. In other words, you’re going to need more than an Excel spreadsheet. Specifically, this tool should allow you to:
• Identify team members by functional role or title;
• Proactively satisfy hard, soft and unidentified backlogs 18 months out (but be truly trustworthy for the next six months);
• Look at staffing through the lens of the customer; and
• Look at staffing through the lens of the employee.
Let’s drill down a bit.
1. Putting the right team together. While a spreadsheet can track where people are and what they’re working on, an operations manager in charge of staffing must understand the optimal team composition for each type of project, and then choose team members by functional role/title. Too often, project managers tend to over-rely on high performers.
Proactively staffing for backlog forces an operations manager to put the right people in the right seats for projects (and choosing the right projects for employees) and then let the “blanks tell the story” — meaning they focus on the vacancies. If the operations manager fills multiple vacancies with a single high performer, a useful tool should flag that employee as overburdened and alert that the plan needs revision.
2. Planning for the unexpected. Resource planning for a hard backlog is a given in the construction industry. The hard part is planning resources for projects we hope to win but aren’t yet guaranteed. Your resource-planning tool should give you a high degree of confidence for the upcoming six months, as well as a broader if less definite view out to 18 months.
3. Staffing to delight the customer. While price is always a significant factor, many customers consider the project team a critical criterion when selecting contractors. It often leads companies to put team members, especially high performers, on multiple projects. Unfortunately, the idea that people can genuinely multitask is a fallacy continuing to have negative consequences for construction projects.
When scheduling isn’t as tight as it should be, people are often given overlapping tasks or duties that can impact their performance. Project management teams trying to focus on successfully finishing one project (an objective) may be asked to shift their attention to proactive, upfront planning for the next project (a critical goal).
But commercial building customers demand a singular focus by project management teams. Project start and end dates are not to be treated lightly.
4. Looking at staffing assignments through the lens of the employee. From the employee perspective, what matters most is, “What will I be working on now?” followed closely by, “What will I be working on next?” Not knowing this can negatively affect performance.
Operations managers should also consider how the needs of the firm and the employee align, particularly when it comes to advancement. In particular, operations managers should think more about feeding the leadership pipeline from the bottom and developing talent internally. It’s their responsibility to coach, guide and mentor. That means putting in the time and effort to develop people with the courageous intent that they may someday take their job.
Practical execution of effective resource planning tools requires support at an organizational level. To execute planning and project objectives, the culture and values of a business must also align in a manner that enforces the four capabilities outlined here.
Aligning culture and values
Let’s take a closer look at the characteristics an organization must have to achieve this.
1. Organizational connectivity between the sales team leader and the operations team leader. If an operations manager is not in a trusting partnership with the sales manager, then it will be difficult to proactively staff a construction team well. To make matters worse, winning work (which is the objective) can overwhelm the people system — putting both employees and business in harm’s way.
Consequently, the team can expect large amounts of variability in project outcomes. Visibility into the upstream workload helps to solve this problem by allowing strategic conversations to happen around people systems. It often unlocks winning strategies and a new level of confidence, too.
2. A commitment to not bait-and-switch teams. As the saying goes, you can have too much of a good thing. Companies can sometimes be overwhelmed when a stream of opportunities turns into a deluge.
Construction firms with the good fortune to be in such high demand that inbound opportunities overlap (let’s say three for the sake of this example) can face a difficult choice. They can prioritize one of the decision-making customers and say, “Here’s our A-team,” and then simply be direct and tell the other two, “Sorry, we can’t offer you the A-team.”
Or, offer up the A-team for all three proposals and switch teams if you win more than one — a bait-and-switch tactic that can earn you a bad reputation with your customers.
While the second route is technically an option, it’s imprudent and ultimately not a risk worth taking. As anyone who’s worked in the proposal world knows, just about every Request for Proposal includes a provision stipulating the team presented in the RFP is to be honored following both parties’ signature to the agreement.
An organization that rejects bait-and-switch tactics and demonstrates its commitment to uphold such agreements earns the trust of its customers, which can help bolster its reputation in the industry (distinguished from the somewhat deviant) and lead to repeat business and referrals.
3. A first-come, first-served philosophy — plus the willingness to share it with the decision-making customer. To reinforce the previously mentioned commitment, the next value an organization must establish and adhere to is a first-come, first-served philosophy — so sales executives can propose the same teams on multiple projects. Effective execution of this value requires direct communication and transparency with the decision-making customer.
As part of this transparency, customers need to know you have a backlog. They should also know you’re in demand as that’s an enviable sales position. When there are multiple project opportunities lined up at your doorstep, all asking for your A-team, you can decide who gets what they want. But you must be willing to tell each one, “You need to know that other customers have requested the same team. Whoever comes to the table first will get it.”
Not only is this a crucial conversation to have with customers, but it’s also a sign of maturity for your organization. Remember, an organizational complexion that supports the blocking and tackling of its resource planning tools is critical.
Put another way, effective resource planning takes more than fancy tools and Excel spreadsheets. Instead, it needs to account for your organizational culture and values so that whatever resource planning tools you use enable your firm to operationalize those values.