Construction Informer

What started as a very localized practice has now gone global so when you hear the term outsourcing today, most often it is in reference to “off shoring,” or sending the work abroad. Outsourcing however is still widely used on local levels by many different sized companies. The flexibility they gain is one of the biggest reasons they go for outsourcing.

Construction companies often have their payroll outsourced. They might also have accounting and other back office functions outsourced.

But there are areas, that during times like these, it might also make sense to outsource. Some construction businesses may not want to take on the inherent risk during lean times of hiring an employee for a particular function when they could use outsourcing and avoid the long-term commitment. In construction those kinds of functions might include the estimating of certain portions of projects. Those estimates are then pulled together in-house so you can maintain control of proprietary information.

Safety is another area where outsourcing can not only free up employees, but can also help to move safety to the forefront. Equipment maintenance outsourced to a local company that specializes in that work will often help to improve the maintenance schedules on the equipment.

Creative managers are looking at their operations in total and seeing where they can gain flexibility and save long-term expense by outsourcing. The net result does more than help the bottom line – it also improves efficiencies. But the contracts are the keys to making sure those things happen.

Phil Britt at insideARM writes how critical the contract phase is and lists the potential downsides:

The primary risks for the contracting firms are over-paying for services; dissatisfaction with service delivery; misunderstanding items or services included or excluded in deal; adaptability of the contract as business needs change; and provider inability to perform.

All of which are better dealt with BEFORE the deal.

Promoting from within a company carries a lot of benefits. Current employees already have an understanding of the company culture, they know the ropes, are known (both their good points and not so good points), and the paperwork already exists. So assuming the person isn’t really a better candidate for firing there is some basic stuff there to work with.

The trick is to find the right method for advancing them. A promotion usually carries with it more responsibility and often means the person will begin supervising others when they may not have been doing that before. Short of sending them to a management course one option is to use on-the-job coaching.

Coaching actually happens spontaneously in construction all the time. Whenever a supervisor explains a new technique, or a seasoned co-worker evaluates the finished task of a junior worker, there is coaching going on. In the case of grooming someone for a promotion however coaching is made into a more formal process with plans on how it will be accomplished and with the establishment of some evaluation criteria so progress can be qualified and quantified.

Choosing the coach is of top importance. The coach will undoubtedly spend time on tasks and how to accomplish them but since the individual may very well need to become more sophisticated in how they communicate and view things the task itself may be the smaller part of the equation.

It wouldn’t be unlikely for a coach who is preparing a seasoned lead carpenter for the role of superintendent to be getting into areas related to communications, ethics and discipline. Not that the carpenter hasn’t been involved in those before, but they will now be involved with those things at a totally different level. Relating to subs on contractual items, dealing with bank representatives, and a host of other new communications situations will be necessary. So the coach needs to be someone who is well seasoned and has the patience to take the time needed to not only tell the person how things need to work, but also demonstrate how it is done effectively.

And that is one of the major advantages of coaching your people to their next jobs – they actually get to see the expected behaviors in action.

Read more in Part 2 tomorrow.

Until the day arrives when we are free of income taxes it only seems fair that everyone should pay their fair share. There are those who believe that income taxes are illegal and they can cite chapter and verse of the story of how this illegal tax came into being and persists to this day. Some of them will then tell you that they just quit paying them. Some in construction will tell you they only work for cash. And you can find contractors who will hire people for cash and claim those people are independent contractors.

In a way the contractor who does that is operating from a point of advantage over other contractors who hire employees although they will often tell you it is simply that they are more efficient and that the marketplace rewards those who find less expensive ways to do things.

All of this flows along smoothly under the surface until the day one of the so-called independent contractors falls off a roof. Once some lawyers get done chasing the ambulance to the hospital (notice I wrote some lawyers because some will, but many won’t) the first name on the suit will be the property owner’s and the second named will be the contractor. In the end, less expensive has turned out to be more expensive for all three. At the dawn of the New Year in Illinois, according to this report, not only will the state be enforcing the law but others will be able to file their own suits against alleged violators for up to three years following a violation. That means contractors are going to have to be on their toes and make sure their subs stay current on their workman’s comp and unemployment insurance policies. Overall though it means that contractors will need to use the IRS test on all functions where they use independent contractors and make sure the person really is an independent contractor.

The headlines on this topic continue to increase especially in the light of the rising shortage of labor as more Mexicans stay home due to inhospitable conditions in the U.S. I think 2008 will be a banner year for activity in this type of enforcement across the country and that can only mean increased construction costs on the labor side.

When I was building custom homes I always had my eye out for the employee with that little something extra. This might be expressed in many ways but usually they were more inquisitive, more enthusiastic and more positive. I used to have a saying I’d share with every new person who walked in the door: “If you’ve got a good attitude then that’s 75 percent of what you need.” Sure, it’s important to know a bottom plate from a stud, and yes you have to know how to properly use your tools, but all of those things can also be learned pretty easily. Attitude is different.

People come to us with all different kinds of attitudes that have been developed over long periods of time from many different kinds of stimuli. I always try to remember that if I had the same experiences and role models that someone with a bad attitude had, I’d probably have a bad attitude too. We are really much more than just ourselves. We are walking talking composites of many other people and we have put together our personas mostly by chance.

How do you take a bad attitude and make it a good one? If I knew the answer to that I’d be on Oprah. But when it comes to working with people you are always going to be dealing with attitudes, after all these attitudes are reflections of who they are so the attitude is going to be right there, out in front.

Probably the most troublesome attitude for a manager to deal with, and for that matter everyone else too, is a negative attitude. Negativity left un-checked permeates the culture of a business and before long as you catch snippets of casual conversation you hear a constant rumble of negativity. Eventually it gets deep into the work and then you’ve got a real problem.

It’s telling that it is more popular to make negative observations about the work place than it is to make positive ones. When was the last time you heard someone at the coffee pot say, “Boy, I just couldn’t wait to get here today!” So any manager has a real challenge in trying to turn around negative workplace cultures, but the place to start is with the individual. If we all just stopped participating in negativity it would probably go away. One person can be the catalyst for change.

In the meantime, no matter where you are in the hierarchy of your organization you should consider that it is just as easy to see the positive as it is the negative. All it takes is adjusting your focus.<

By its nature construction is fast-paced and those who manage it are chronically overworked. So it’s no wonder that things like performance reviews, mapping plans for advancement and employee training are often just simmering away on the back burner waiting for that miraculous day when the schedules clear and allow people to spend some time on them.

Over at SuccessFactors they spend a lot of time on the people equation of business and they use an inspiring new word for these “human resources” – talent. In their white paper, “Wasted Human Capital: The Looming Talent Management Crisis in Corporate America,” they analyze and draw conclusions about how well America is managing its talent. The report card isn’t very good.

Seventy-two percent of respondents were not very satisfied with the performance review processes in their companies. In three out of five categories related to organizational goals employees faced challenges and more than half of all employees had a hard time meshing their personal goals with the company’s and in tracking employee and departmental progress toward goals. Worse, slightly more than half of the respondents thought fewer than half of the employees in their companies were compensated or rewarded on their performance and on achieving goals.

I read the report and I’d sum it up by saying that if you want your company to be successful at making sure it has the right talent at the right times then you should be focused on:

• Aligning employee and company goals;
• Developing employee talent;
• Motivating employees; and
• Keeping employees, especially by offering pathways to advancement.

You also have to absolutely make time to do these things.