In this Issue:

• So Where Are All of the People?
• Employee Retention
• Hard Hat Humor

So Where Are All of the People?

Unemployment in the construction sector, by many estimates, has exceeded twenty percent. Many firms have been forced into streamlining their operations. Layoffs are not uncommon; jobs are less plentiful than they once were. Logic might dictate that finding highly qualified individuals in the construction industry would be a far easier task than in previous years. It is apparent that this is not necessarily the case. In fact, many firms have continued to struggle in their effort to identify and attract exceptional talent in the mid and upper management levels.

Let's explore some of the factors which could be a part of this challenge:

• Our economy is, at best, in a state of flux. People are uncertain of what the future holds. As a result, they are hesitant to make changes in their lives - this includes career moves.
• Individuals who are gainfully employed view changing employers as a risk. The "last in, first out" concept creates anxiety when considering a move to a new company. They feel unrewarding stability with their current employer may be a better option than an upward move which introduces uncertainty.
• Moves which involve relocation may be less appealing because most housing markets are in poor shape. Fear of multiple house payments reduces enthusiasm for a new challenge. Working spouses face the additional question of being able to find work in unfamiliar surroundings.
• As potential candidates move closer to retirement and experience unemployment for the first time in their lives, many of those with five years or less remaining in the workforce opt to enter into a different industry.
• Constructors are more proactive in "protecting" their most valued employees. This may involve financial, cultural or personal incentives. Newly enacted employee-centered business philosophies make it less likely that workers will actively seek opportunities elsewhere.

Overall, it remains a fact that it is still difficult to attract the very best professionals to your firm. Since it is more critical today than ever to establish a team of "difference makers," the question arises: how can an employer overcome the obstacles that may come into play? What attracts the best candidates during these uncertain times?

• Stability, Profitability, Bonding Capacity - People are far more willing to look at an opportunity with a firm that has its finances in order. This bodes well for future growth, continued employment and career advancement.
• Diversity of Projects - This is seen as protection against a single sector of the business experiencing a significant slow-down (i.e. residential development). This also helps secure individuals who want to broaden their experience from a project perspective.
• Benefits - Offering a strong benefits package can be a big draw in an era where many employers have reduced this highly valued part of their compensation plan.
• Formulaic Bonus Plan - Professionals who have experienced drastic reductions in discretionary bonuses find this appealing. Confident managers feel more comfortable in a system where bonuses are measurable and predictable based upon performance criteria.
• Employment Contracts - Primarily used for very senior level positions, the guarantee of a clearly defined minimum time of employment can be a very positive factor. Some firms include a severance program as part of the contract.
• Housing Assistance - When relocation is involved, short-term housing assistance is frequently included in an offer. This ranges from as little as one month to as long as one year, depending upon the position of the new employee. This can ease, to an extent, the burden and concern created by the downturn in the housing market.

Certainly, there are many other ways to bring highly skilled talent on board. Many are intangibles such as industry reputation, cultural compatibility, and general chemistry between an employer and prospective employee.

Many of our clients feel that establishing the best possible group of professionals now will create a distinct advantage for them as the market improves. Perhaps one or more of these suggestions may assist your firm in attracting the most exceptional talent.

Employee Retention

There is no doubt that these are challenging times for all types of companies in the construction industry. Few firms have escaped being affected in some way by the current economic climate. According to a recent study, only 25% of high level employees say they are likely to stay with their current employer. Now is a good time to rethink strategy: identify the talented employees you cannot afford to lose, and make sure they are happy and engaged. It is essential that hiring authorities and company executives utilize every tool available to keep their key employees. This is more important now than ever before.

The retention of key employees is critical to the success, growth and profitability of any company. There is intrinsic value in retaining employees who have demonstrated consistency, productivity, and the ability to satisfy customers.

The failure of a company to hold onto key employees results in high turnover, general insecurity, and costly replacement searches. One can measure the health of a company by the tenure/longevity of its most successful members. The consequences of excessive turnover can range from financial loss to damage of the company's reputation.

The reality in the marketplace today is that many firms have had to reduce salaries due to diminished margins and increased operating expenses. We have seen numerous examples of creative restructuring based on the changing needs of contractors. It is common now to ask employees to cross train, multi-task, and do "more with less."

Some companies Kimmel & Associates work with have had to lay off key employees, but many others are proactively using a variety of techniques to keep their employees. To this end, we remind our clients there are still a number of ways to reward and motivate long-term employees. The obvious is monetary; however, it is equally important employers recognize and give their employees positive feedback. Communication is the key. It is crucial that employees understand that there are "shared sacrifices" at every level of the organization in trying times such as these.

It behooves employers to foster an environment which places a premium on supporting those who have made significant contributions. It is also important to acknowledge the daily commitment and effort of loyal and dedicated employees.

There are other, less tangible methods to encourage and reward the input of long-time employees. It has been proven that those employees, who can freely speak their mind, offering suggestions and constructive criticism to management, will ultimately feel more loyal and secure in their positions. People want to know that their feedback and ideas matter to those who lead the organization.

Employers may also want to consider increasing their employees' involvement when making the difficult decisions concerning day-to-day expenses and the other costs of conducting business in this economy. Employees should be encouraged to offer suggestions to help management identify ways to reduce expenses; e.g., energy costs, office/administrative supplies, maintenance issues, etc.

It is crucial all employees be given the tools to succeed in their business; this includes training, as well as the time and resources to effectively do their jobs. Many more employers are offering flex-time work hours to long-term, trusted employees. This has proven to be another cost-saving measure that can yield significant savings to the employer.

In order to retain the most productive members of an organization, the employees must know that there is room to grow within their company - both professionally and personally. Career-oriented individuals must recognize growth opportunities will continue to exist within the company and their efforts will not go unrecognized by the senior management executives, no matter what is dictated by the current economic climate.

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