Construction Informer

There is a whole topic related to employees that gets little attention in many construction circles. Why, how and when do we invest in our people.

The header to an article at Workforce Management sums up the realities of spending on employee training and development:

Companies expend a great deal of energy in establishing programs that eliminate waste, with the goal of reducing costs and ensuring consistent production of quality products or services. Many companies have also focused on reducing costs by lowering headcount or outsourcing work to lower-wage environments. But little is said about investing in people to exploit their talent and creativity. How many companies actually have a ‘human capital investment program’ that spends even a fourth of a normal capital program?

Imagine investing as much in our people as we invest in other areas of the business. The writer goes on to point out that the average manufacturing company will spend 5-10 percent of revenues on capital investments, but not even one percent on employee training and development.

Dr. Deborah Fisher contrasts numbers from the Construction Industry Institute and the American Society of Training and Development to illustrate the gap that exists in what people believe should be an acceptable spend on employee training and development:

The American Society of Training and Development (ASTD) recommended 62 hours per person per year the last time I checked, a value which converts to about $3000 if you use a standard burdened salary rate of $100K. The Construction Industry Institute (CII) at the University of Texas at Austin is a conglomerate of owners and contractors in the construction industry. They recommend the equivalent of $1750. As you can see, these are higher than some actual values, but lower than others.

But of course you have to ask yourself that if you were going to spend $1500 per year on each employee for training and development, just what kind of training and development would that be? There are many opportunities to get training for people that will improve their job knowledge and skills. But for those employees who have expressed an interest in moving up the ranks there are also many options for getting them enrolled in courses that help them learn people skills, leadership skills, and management skills.

For construction, and so many other U.S. businesses, the coming years are going to require a lot of creativity. Once all businesses have thinned their ranks and are running at optimum efficiency just how are some going to differentiate themselves? Who is going to have the next thought that occurs outside the proverbial box? It could be one of your employees but perhaps only if they are exposed to concepts they might only get from training and/or development.