What “new tricks” have you had to come up with in order to balance your backlog with your labor roster?
I am making the same money by cutting back on poor quality workers and raising my prices. Still backlogged.
—Kevin Lithgow, Owner, KL Drywall LLC, Minneapolis, Minnesota
Only sell to your labor.
As a CM, I’m very interested to hear about these new “new tricks.” Running an efficient operation, being truthful to your customers and performing quality work, I guess those are “old tricks” and no longer relevant?
—Chris Ball, Ball CM
It is always good to … be forced to articulate some of our concerns and challenges.
This is the big one now.
I just read in The Washington Post that Atlanta is one of the toughest places for immigrants to gain legality.
The article is about a woman lawyer who is having a challenge of conscience—whether to continue to take immigrants’ money knowing that the chances of success are basically null or quit her business.
Since we signed the E-verify agreement, the well has dried up for manpower.
It used to be that I could tell a superintendent that we need 10 more men on Monday and they’d be there. Not now.
There are strategies, however, that enable us to meet schedules and complete jobs on time.
For instance, if a job is straining to stay on schedule and the reason is not our fault, we might ask to be compensated to work overtime.
Or we might load a given job with crew from other jobs for a day to blow out some phase of work. Usually a construction manager’s superintendent will excuse us from his job for a day—especially if we’ve kept him happy to that point.
We’ve resisted using labor subcontractors for manpower. More often than not, they don’t have the culture of safety and quality and service that our hourly people have. And they typically require more management than our long-term in-house employees.
Then there are weekends that provide time to catch up on work or get ahead—but at a cost—that being overtime which eats away at profit.
So the owner/manager’s challenge always is to have enough work for the employees and enough employees for the work. That’s tough.
I’ve heard that the airlines overbook a flight, anticipating that there will be some no-shows and still have a full plane. If all the booked people do show, the cost to the airline might be an overnight in a hotel and a meal, which are potentially less cost than the fare. So we take on more work than we can do with the available manpower, anticipating that a job will be delayed, and then we still keep our people busy. If all the work starts when we’re told it will, we can compensate by ganging the job with employees from other jobs.
It’s a constant challenge. There are organizations that are working to bring more people into the construction field. They are targeting middle and secondary schools and community colleges and military veterans. There is still a perception that construction is dirty work—standing in a muddy ditch with a shovel.
The truth is that construction has become highly technical. While there is still a lot of hands-on work in the industry, the advent of computerized modeling of buildings, prefabrication of building assemblies, drone technology and similar other modalities make the construction industry highly challenging and satisfying.
—Rob Aird, President, Aird Incorporated, Frederick, Maryland
Basically, when the backlog is full for their timeline, the bid goes out with a 25/25% markup. Not many takers at those prices, but it keeps our hand in the mix.
As we all know, there are only so many qualified tradesmen in given disciplines in a given market area. When work is scarce and desperate competitors are bidding projects at cost to sustain volume, one must either modify the business model, such as exploring the business environment in other market areas, or lay low, so to speak, until viable projects become available. We have found that by reminding our clients that the level of quality that we have historically provided at competitive values has served them well in terms of sustaining their reputation with their clients, we are able to maintain a reasonable workload. Most of our clients can be categorized as companies steeped in tradition and of high integrity. Our business model implores us to secure work for our core group of qualified tradesmen; it is rare for us to reach beyond that sphere of security. Hence, our balancing “act” is rooted in a disciplined adherence to our business model.
—Howard F. Hopson, Owner, Hopson Specialty Systems, Forty Fort, Pennsylvania
We have had to come up with numerous "new tricks." The most important one is that we have made the conscious decision to meet internally about manpower on a daily basis as there are so many moving parts and the demand is so high. The requests for manpower on new and existing jobs is coming in at a rate that none of us have seen before. In meeting daily, we have had to make group decisions that had everyone's buy-in and not just our general superintendent. This way we can get out in front of the communication with our customers to help them understand that we are managing our resources and we will take care of their needs as soon as we are able.
—Scott Bleich, Owner, Heartland Finishes and The Heartland Companies, Des Moines, Iowa
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