Even before COVID-19, worlds were subject to change—perhaps especially so the worlds of residential construction and real estate development. The pulse of housing, starting with post-World War II Levittowns to the 2006 housing bubble and beyond, is one replete with ups and downs, cycles and crashes. From lumberyards to jobsite trailers, from the contractor pickup truck to the investor board room, from subdivisions to apartment units to high-rise luxury condos, booms and busts are part of our DNA.
File that all under the adage of “the more things change, the more they stay the same.” Twenty years ago, the first of the multibillion-dollar construction companies were emerging and still doing a big portion of their business with handshakes and fax machines. Cycles dominate these businesses, but there are constants, too, and the power of people is perhaps the biggest.
What you’re reading now is based on interviews and research from February and written in March. It may no longer match the reality of residential construction in this moment, but it embraces the spirit, tenacity, creativity, and ambition of every truly successful builder, contractor, developer, property manager, and lumber dealer. If we are constantly, then, a macro-industry that is indeed “all about the people,” here’s a look at a point in time where competition for talent was at its zenith, and what the power players in construction were doing to find, hire, and keep folks who have the right stuff.
Must Have Experience Wrestling Bears
There’s a photograph at 84 Lumber headquarters of a store opening sometime back in the late 1950s or early ’60s. In addition to the usual fanfare (discounts, hot dogs, raffles), this particular grand opening promised a wrestling match between a lumberman and a live bear. The photo, alongside other historic memorabilia tracing the company’s roots and the history of founder Joe Hardy, serves notice to the company’s management trainees as they embark on three days of Lumber Camp: the construction industry takes grit, and 84 Lumber isn’t looking for just any old Joe or Josephine.
“The truth of this is that we are looking for commitment,” explains 84 Lumber CIO and head of human resources Paul Yater. “We are selling the opportunity to manage your own lumberyard in three years if you are ready, but this is not a suit and tie manager trainee kind of place: You are out in the elements and loading trucks and talking to customers and wearing many hats. If you are willing to commit to that, we have a highly incentivized culture, and we’re not necessarily looking for people who know a lot about the industry from the get-go.”
In Houston, David Weekley Homes was just named to Fortune magazine’s 2020 list of the 100 Best Companies to Work For, despite having actually reduced staff as part of a broader, three-year strategic plan for improving bottom line revenue. Employing a this-job-probably-isn’t-for-you ethos similar to 84 Lumber’s, the home builder has been successful in optimizing the DNA of its workforce even as it decreased headcount from 1,650 to 1,525.
“There is a recognition there that we can probably do more with what we have,” says Robert Hefner, vice president of human resources at David Weekley. “Roughly 10% of the workforce should think about coming to work for us, and the other 90% should not. To best manage people in a revenue-building process, we have to hire and retain the right team members, which are people who feel good about going beyond customer satisfaction to customer delight.”
The NRP Group started 3,463 apartments in 2019, enough to land the Cleveland multifamily firm on the National Multifamily Housing Council’s list of the nation’s top 10 apartment developers. There, too, has a focus on placing higher expectations on job recruits from the outset helped to gear the corporate culture toward innovation, growth, and perhaps resiliency, too.
“There have been significant events in our space, which just 15 years ago was still quite archaic, a place where success wasn’t about skill sets as much as it was who could yell the loudest from the trailer,” says Taylor Brown, principal and president of The NRP Group’s construction division. “We have seen a shift in that dynamic toward high-potential performers, and we are trying to put resources to work building a culture that starts and stops with what you bring to the table and how you can grow and mentor your peers.”
The Hard Line on Soft Skills
Of course, high-potential performers are coming to the job with some expectations of their own, specifically as it relates to training and career development. To that end, NRP is expanding regular training and workshops on the technical side of the business (think accessibility, universal design, water intrusion) and developing an in-house curriculum on leadership and soft-skill development. “It’s an area where we are trying to shift the culture and invest in a more progressive employee by attempting to hone critical thinking, problem solving, and communication and then focus those skills back on the business,” Brown says.
Since forming in 1992, Chester, Pa.–based Power Home Remodeling has grown to 2,700 employees and a network of 500 crews working window replacement, flooring, roofing, and siding retrofit jobs. Power, which also landed on Fortune’s 2020 list of Best Companies to Work For, considers itself a “dream-realization” company, and even invites visitors to its website to immediately choose between one of two options: improving their home or advancing their career.
“We don’t target and recruit for construction experience, we recruit for a type of person who is positive, energetic, and has a lot of grit,” says Power senior vice president of install services Mick Lynch. “We support those hires with very strong training programs, because if we can find the right person and get them in the walls, the training will develop the skill sets they need on the job or to further their career.”
At Power, every employee is assigned a long-term mentor and progresses through a curriculum of training modules addressing all aspects of the business. “Top talent is looking for career advancement, and, yes, we do home retrofit, but at the same time, our business has in-house IT, we have sales, marketing, supply chain management, so we’re looking to prepare employees for those opportunities to advance and move throughout the business. The ability to see a career path attracts people, and brings a much broader range of talent to help scale and grow the organization.”
With a long history as a destination location for job seekers in multifamily property management and development, the Greenbelt, Md.–based Bozzuto has likewise emphasized soft-skill training and career development as catalysts for a positive (and profitable) corporate culture. “Most people are not looking for what they can do today, they are looking for where they can get to in the long term,” says Bozzuto’s head of talent and culture Kristen Magni. “That’s our mindset: not filling a particular job, but finding and developing future leaders, future project managers, people who can work with subcontractors, or learn how to manage a building.”
All in the Family
Even as top real estate employers recruit based on character and personality rather than demonstrated industry acumen, finding job seekers doesn’t come any easier. While most companies continue to rely on a mixture of online job listing services like Craigslist, Monster.com, and Indeed, and bolster those recruitment efforts with social media (particularly LinkedIn and Facebook), the best recruits are more likely to be found closer to home, within the personal and professional networks of team members already on the job.
At Power Home Remodeling, a great employee referral translates to a $2,000 spot bonus, which is increased to $3,000 or more if the candidate is female. According to Lynch, the referral program has been so successful that it has allowed Power to decrease its help wanted advertising spend, thereby paying for itself. “Over half of our candidates are referrals now, which provides us with a much higher inbound rate versus traditional recruiting methods,” Lynch says. “So it allows us to take the investment in Monster and give that to our people by paying out bonuses and incentivizing them to talk about how much they love their job.”
Particularly for firms building from the ground up, the friends and family of existing employees are often an incredible resource for finding high-quality job candidates. At Chasen Construction in Baltimore, employee referrals have been the primary way the boutique multifamily developer has grown from two founders to a team of 11. “We have used a search firm on the office and project management side, but we really use friends and family as a referral source for hiring people, all the way to recruiting our former high school lacrosse coach as a mechanical engineer,” says company president Brandon Chasen. “But we still hire slowly with at least three interviews, because growing the team cohesively is very important for us. We need self-starters who are OK with the fast pace of a small but rapidly growing business.”
At David Weekley Homes, the importance and influence of friends and family are so critical that the home builder includes them in the interview process for virtually all new hires. “If you are a candidate we want, the hiring manager meets with your key influencer: a spouse, a parent, whomever the candidate wants,” explains Hefner. “We’ll meet them at home or at Starbucks, and it is a meeting for the influencer to interview the hiring manager. The 10 percenters that we end up hiring think it is fantastic.”
The Personal Touch
Finding great employees is one thing, hiring them is another, and retaining them is something else entirely. Training and career development are solid foundations to both build and keep future business leaders, but progressive employers are also upping the ante when it comes to nontraditional compensation and benefits, work-life balance, and employee reward and recognition programs.
While many companies recently pivoted to telecommuting out of necessity to navigate COVID-19, work-from-home flexibility was already being offered by progressive employers prior to the pandemic. A perk to workers that often results in higher productivity, telecommuting also allows employers to consider candidates located pretty much anywhere, and can reduce the need for office overhead, too.
In January, the Cardinal Group announced the launch of a “work from anywhere” policy for the multifamily apartment company’s portfolio managers. With operations in Denver and Austin, Texas, Cardinal made the change in order to attract job candidates from other markets. “A recent report on the importance of flexible work found that 73% of employees said flexible work arrangements increased both their satisfaction and productivity at work,” says Cardinal vice president of people and culture Peter Lynch. “It’s a change that represents a powerful value proposition for our team members, and will increase our likelihood of attracting and retaining top talent in our space.”
In addition to telecommuting benefits, employers in real estate and construction are increasingly offering benefits like paid gym memberships, tuition reimbursement, and even unlimited paid time off, all of which can lead to a healthier, more productive, and more motivated workforce. But employee retention and reward needn’t be an expensive or elaborate program. At Bozzuto, both Tom Bozzuto, company chairman and co-founder, and his son, Toby Bozzuto, president and CEO, are known for sending handwritten notes to employees for recognition and thanks.
“Getting a personalized note or a phone call from a senior leader means more than anything we can sink thousands of dollars into,” says Bozzuto’s Magni. “I’ve been saying this a lot, that there is a lot of changing in the future of talent. The jobs today may not meet the needs of tomorrow. So how do you prepare for a changed world and uncertainty? Well, human needs don’t change. People have a need to be happy, and how we make that happen might change, but delivering the need for feeling welcome, included, and important never will.”
Back at 84 Lumber, it’s near certain the need to celebrate the power of the people will never change, either. Like other companies interviewed for this piece, the building materials supplier makes a point to at least annually gather as many team members as possible for a grand gala salute to the team. For 84, that could be at headquarters or up the road at Joe Hardy’s Nemacolin resort, where amenities include fly-fishing, a PGA golf course, a casino, and an off-road Hummer track. There’s always a look back at the year before, a look forward to the year ahead, an awards ceremony for the talent powering the company, and who knows? You might even get to watch a store manager wrestle a bear.