Super Companies, Super Employees

David Hunt

March 2007

Construction companies are raising the bar to find and keep the best workers, which they say encourages performance at the highest level, and pays long-term dividends in the form of higher productivity.

Tricia Muller, president of M & O Exterior Applicators of Frederick, Md., said the company has taken on the challenge of hiring new personnel by bringing them in at the bottom, working hard to keep them, and promoting from within whenever it’s possible.

"We tell them up front, ‘You’re going to have an opportunity to learn and grow,’” Muller said.

Starting new people at ground level allows them to see across the whole business, Muller said. The company believes this is an effective way to start the employee-employer relationship.

Muller’s husband, Jeff, and co-founder Vince Ohler started the company 20 years ago. The firm, which began in her family’s basement, has grown to employ 50 people.

Muller said the company, a non-union operation, was looking to hire two new EIFS foremen. She said the company thought long and hard before making the move.

"It’s difficult to find foremen in our area with EIFS training,” she said. "Therefore, we had to fill those positions with someone trained in another area. They basically grew into those jobs. The problem is, it normally takes a year until they become effective.”

Muller said the company awards Christmas bonuses for workers and trips to the Caribbean for foremen. She added that profit-driven bonuses are also presented to workers based on a yearly evaluation, and service anniversaries are recognized at a holiday celebration.

Muller also said the firm recognizes employee birthdays and the birth of babies. "Small, personal touches often have a great deal of meaning, and we feel they are a key part of keeping good employees,” she said.

Nice Guys Get Rich
This sort of employees-first mindset is the main topic of a new business book, Setting the Table: The Transforming Power of Hospitality in Business, by Restaurateur Danny Meyer. Meyer has created a string of successful restaurants in the ultra-competitive New York City market. He opened his first, the Union Square Café, at age 27 with some firm ideas about how to run a business.

Twenty years later, Meyer’s organization has grown to operate 11 top restaurants in the city. Two of Meyer’s establishments—Union Square Café and Gramercy Tavern—have topped the 2006 Zagat survey as New York’s most popular restaurants. How did he do it? Basically, by being a nice guy. His strategy involves hospitality to employees first, customers second. Next, he prioritizes the community, suppliers and investors. The turning point for the company came, Meyer said, three years after opening his Union Square Café. At that point he was able to hire Chef Michael Romano, in a move he credits with vaulting the restaurant’s performance.

Hospitality, he said, starts when people believe "the other person is on your side” and that belief is backed up by behavior.

Grab ’em While They’re Young
Scott Johnson, administrative manager for The Raymond Group, based in Orange, Calif., said the company "puts employees first in all things we do.”

Johnson said when The Raymond Group does hire new personnel, they usually hire people in their formative years, at the point when they’re graduating from college.

"We meet with people as they’re ready to graduate,” he said.

Johnson said young people are like clean slates, without pre-formed habits. This, he said, allows the company to effectively teach "the Raymond Way.”

"Sometimes we might wish for someone to hit the ground running,” Johnson said. "But learning ‘The Raymond Way’ takes time. So it really is impossible for someone to join our firm and hit the ground running.”

Therefore, like other construction companies we spoke with, Johnson said his firm believes that once hired, it is absolutely critical for them to work to keep the employee.

He said the employees-first mindset has roots in the company. The 71-year old company was founded by George Raymond, often recalled for his small acts of kindness performed right on the job site. Johnson said whether George Raymond was giving out $100 bills to have dinner on him, or granting a day off for a job well done, the founder clearly earned a position of respect as "a benevolent individual.”

"He clearly fostered a work/home life harmony that has earned our company a great deal of continuity,” Johnson said.

That legacy is now being carried on as Travis Winsor has taken on the position of chief executive officer of the company.

"Sometimes when the grass looks greener somewhere else it probably means you aren’t doing enough to water your own lawn,” Johnson said, quoting an unknown source.

Taking a long, hard look at itself, he said The Raymond Group recently completed a survey on what matters most to its 1,500 employees. That survey led them to elevate the concept of training. The company has hired a training manager to develop the company’s training efforts.

"Sometimes we want to assume that a great carpenter will make a great foreman,” he said. "That is not always the case.”

Johnson said the company provides a great deal of training up front, and said targeted training on a range of topics such as communication, delegating authority, providing feedback and team building is also available. He also said the impact of the training program hasn’t yet been measured; it’s just too new. But for now, in terms of giving employees what they ask for, Johnson said, "the company is hitting the nail right on the head.”

Johnson added that the company offers a host of monetary incentives such as salary increases and performance bonuses. He said the company enjoys a 14 percent gross margin, and a 4 to 5 percent profit margin.

Johnson’s employees share in the firm’s profitability through a profit-sharing bonus. The company also offers a 401K plan with employee match and adds a 401K profit sharing plan on top of that. Need more? The company also pays the entire tab for health insurance, medical, dental and vision coverage for all of its workers as well as their dependants. Fairness in the Valley Dave Olsavsky, owner and president of Valley Acoustics, Youngstown, Ohio, said the company operates as a union employer, operating by union rules.

He said, in short, the company is guided by the golden rule. "We treat our employees fairly and equally, the way we want to be treated,” Olsavsky said.

Olsavsky said the company works to make their projects as safe as possible, and said the firm goes out of its way to purchase new equipment when it will make a safer job site.

He added that Valley Acoustics employs only U.S. citizens, and he is proud of the company’s workers for maintaining a great deal of pride in their work. Regarding personnel, Olsavsky spoke against hiring illegal aliens as new employees. He said those employees might work here, but they may take their paycheck elsewhere to spend it.

Olsavsky said Valley Acoustics provides a holiday gathering in December, and there, they recognize employees for their effort. He also said the company offered an incentive bonus on one of its bigger jobs, but said it didn’t work as he had hoped: "The problem was, many of our employees didn’t think they would actually get the bonus, and they were later surprised when they did.” He said the company may try to offer an incentive bonus again, now that employees understand that it’s for real.

Olsavsky also said he saw the value of listening carefully to employees: "It is important to listen to their ideas. It is important that workers understand they have input.”

Olsavsky suggested giving employee suggestions a chance: "If someone thinks they understand the best way to do something, allowing them to give it a try will probably make the job go more smoothly, and it might make workers more productive.”

A Good Fit from the Beginning
Shane Burnett, project manager for James River Exteriors of Richmond, Va., said their firm, which employs 50 people directly, seeks to hire the best people right up front.

Burnett said the company looks for team players, strong moral character and pride in a job well done. He added that once in the door, high pay, a solid retirement plan and a performance bonus for foremen have all served to motivate employees. However, Burnett said not all people make a good fit for any particular company.

"The best way to create a more productive work force is to hire good people and fire bad people,” he said. "We have learned that you are only as good as your people.”

Company People
Carma Weber, treasurer of Lundquist Associates, of Denver, said their company keeps its personnel by allowing them to own a part of the corporation through an employee stock option plan.

Weber believes Lundquist Associates, an open shop contractor, broke ground as the nation’s first employee-owned wall and ceiling contractor in the nation. She said the firm employs 180 people and does about $10 million worth of work on mostly interior walls. Andd the employee owned company has extremely low turnover. She said the company "cannot keep everyone it hires,” because they staff up with painters with during the warmer months.

Weber said the company does not let people go just prior to their fifth year anniversary, the date on which they become part owner in the company. However, the company also has to remain profitable each year in order for the company to distribute a portion of net income to employees. Weber said an average of 15 percent of net income is distributed each year to employees.

These interviews provide just a small smattering of examples for how to get and keep good employees, but they speak for other companies that offer similar incentives. There are many more companies out there that are finding and retaining good workers; if you’re company is not one of them, perhaps you should reconsider how your employees are treated.

And if you happen to work for a company that does offer great employee benefits, we have just one question for you: "Do you have any job openings?”

About the Author
David Hunt is a freelance writer/photographer in Hershey, Pa.