Jeremy Knauff presenting to a group of entrepreneurs for the Florida Small Business Development Center
The construction industry has went through significant changes lately, including improvements in technology, increased worker safety, and growth. Entrepreneurs in the construction industry have endured challenges over the last decade, but trends look to be changing in 2017. The ups and downs of this industry—of any industry, are an expected and natural phenomenon within a free market economy. What wasn't expected is the current difficulty in finding enough quality employees to sustain future growth.
One part of the problem is because unlike some other careers, time on the job site is required to learn a trade in the construction industry, making it time consuming in order to develop a skilled workforce. Also, many aren’t willing to wait around through to down times within the industry.
Another issue is that many Americans today seem to have bought into the false belief that physical labor is beneath them. This is especially ironic since many jobs in the construction industry offer significantly higher salaries than many white collar jobs that require a degree.
Optimism about growth within the industry is becoming more widespread lately, along with an understandable concern about the ability to find enough reliable employees to support that growth, according to the largest trade organization within the construction industry. Steve Cona, CEO of the gulf coast chapter of Associated Builders and Contractors, a 22,000 member organization made up of professionals in all facets of construction, explained “Nearly 21 percent of skilled construction workers are 55 or older, and 29 percent are 45 to 54 years old. We're not replacing those people fast enough. Because of that, ABC and its members are investing over a billion dollars in workforce training. We need high schoolers and veterans to help fill our skills gap.”
These changes and concerns are clear to the businesses that support the construction industry also.
Jeremy Knauff runs a digital marketing agency that specializes in the construction industry, and he has noticed some dramatic changes over the last 12 months. “After the collapse in 2008, business owners in the construction industry became very cautious. That’s understandable because it destroyed a lot of companies, and many of the companies that did survive have spent the last several years just trying to hold on. It’s been a rough ride for a lot of hard working business owners, but we’re seeing a lot of signs that there’s a big turnaround not too far off.”
Knauff’s statement is not an exaggeration. According to the US Census Bureau, construction spending plummeted by over 787 billion dollars following the collapse, and has only recently returned to pre-collapse levels. This industry was the hardest hit, losing a staggering 1.8 million jobs, but as 2017 seems to be reaching her stride, we’re starting to see a light at the end of the tunnel.
“Last year, a lot of companies in the construction industry were still trying to hoard cash to insulate themselves from a prolonged recession, or even worse, another dip. This year, more of them are coming off the sidelines and investing in both marketing and new employees. They’re gearing up aggressively for growth, and it’s putting them in a position to start seizing market share from their more conservative competitors.” Knauff added.
It’s a sound business strategy. Conserve cash during the down times, then invest heavily just before the market starts to boom. Having the right timing is tricky, but companies that nail it are often richly rewarded with profit and market dominance, while companies that wait too long are left fighting over the scraps. It can make or break a company.
Obviously, marketing plays a huge role in growth, but an often overlooked factor is staffing, and that is an essential factor.
Knauff continues, “We've achieved dramatic results in terms of increased exposure and revenue for clients through our digital marketing efforts, including web design, search engine optimization, and social media, but all of that is wasted if they don’t have the staff to properly serve their customers. If you can't serve your customers, you start falling behind on deadlines, losing profitability, and disappointing them, which leads to bad reviews and no referrals. It gets a lot more expensive when you have to constantly find brand new customers because you burned the last ones.”
After hearing from many clients about their challenges in finding quality employees, Knauff knew there was a simple answer. The construction industry needed reliable, trustworthy, and dedicated employees, and there was one group of people who fit those criteria precisely—that was veterans.
Knauff, who served in the Marine Corps infantry, says “Veterans, especially those from the combat arms, are accustomed to taking initiative and are certainly no strangers to hard work under difficult conditions. We’re talking about the kind of people who typically hold leadership positions 5-10 years before their civilian counterparts, make life and death decisions on a daily basis, and perform heavy physical labor in 125° temperatures with no shade. This makes them ideally suited for success in the construction industry.”
Due to the physical and mental challenges they've overcome, it's no surprise that veterans tend to thrive in the construction industry. Veterans treat accountability almost like a religion because in the military, mistakes often mean someone dies. Accountability is drilled into them from the first day of boot camp to the last day of service, and for the vast majority, it sticks with them throughout the rest of their lives. It covers obviously critical details, like always keeping your rifle nearby, all the way down to seemingly trivial details like packing enough clean socks.
Knauff continues, “I think most people can understand how keeping your rifle within arm’s reach enables you to return fire in the event of an attack, but the little details matter just as much. Let’s say you go out on a mission and forget to bring enough clean socks. This may seem like no big deal, until you realize that you’re moving around on foot all day with 70 pounds of gear or more. If you don’t change socks frequently, this chews your feet up, and once that happens, you’re combat ineffective and you’ve just let your platoon down. Now they’re a man short, and that can make a huge difference in a firefight.”
This level of personal accountability is extremely valuable in the construction industry where a seemingly small mistake could have significant cost and safety implications. One such example is the Manhattan crane collapse that killed 7 and injured another 24 people.
“When a construction worker does something the wrong way, it’s easy to cover it up to save time and money, and unfortunately, that happens quite often.” says Gil Livingstone. “As a forensic architect, I’ve seen a lot of mistakes that have cost building owners a significant amount of money, and in some cases, have even resulted in a loss of life. Often, it’s simply due to negligent construction practices that could have been avoided. I’ve also noticed that veteran-owned contractors—especially ones that hire fellow veterans, tend to have far less of these issues because of the level of personal accountability they hold themselves to.”
Many growing companies in the construction industry have started to realize this, and as a result, are now focusing on hiring more veterans. Tri-City Electrical Contractors, Inc. was one of these companies. When company president Jack Olmstead expressed a challenge in finding enough reliable employees to support his rapid growth, Knauff introduced him to a fellow veteran, Josh Billingsley, who had founded a recruiting company after a career in recruiting spanning nearly two decades between the Army and the private sector. This connection quickly lead to Tri-City committing to hire 100 new employees—with an emphasis on veterans, throughout 2017.
Jack Olmstead presenting to a group of Tri-City Electrical Contractors, Inc. employees
Companies that want to hire veterans have a tremendous pool to select from because of military downsizing. Over the last few years, the US military has been reduced to pre World War II levels, forcing a lot of highly qualified people back into the private sector. This creates an amazing opportunity for companies that want to hire dedicated, hard working people, but it presents another set of challenges; where do you find these veterans, and more importantly, how do you decipher their cryptic backgrounds?
Billingsley comments, “I’ve met with many business owners lately who specifically want to hire veterans, but they don’t understand how to translate certain military skills and experience into civilian qualities. It’s not quite as straightforward as looking at a civilian resume because there are a lot of hidden skills and experience that people outside of the military won’t recognize. For example, most employers don’t realize that a candidate who served as a squad leader in an infantry platoon often possesses more direct leadership experience than the typical mid-level manager in a Fortune 500 company because he was responsible for every aspect of the lives of roughly 12 men. This leadership goes far beyond tactical proficiency, which is a significant undertaking on it’s own, to include administrative, health, educational, career, and financial matters for each member of his squad.”
Olmstead adds, “Our challenge was twofold. One part was finding enough qualified applicants who were willing to work hard, and the other was finding applicants who didn’t have a substance abuse problem. We generally don’t have those challenges with veterans because they are a different breed of people. They show up on time, work hard, and they don’t cause problems.”
Jon Spivey, a Navy Veteran who runs USA Mobile Drug Testing of Atlanta explained why. “It’s not that there is no illicit drug use within the military, however, it is extremely low compared to the civilian population. This is due to two factors; a zero-tolerance drug policy, and most military personnel simply aren’t willing to endanger or let down their fellow service members. That mindset doesn’t go away just because you get out of the service. It’s part of your character, it’s who you are.”
According to the National Institute on Drug Abuse, just 2.3 percent of military personnel were past-month users of an illicit drug, compared with 12 percent of civilians. Among those age 18–25 (who are most likely to use drugs), the rate among military personnel was 3.9 percent, compared with 17.2 percent among civilians.
Spivey went on to say that construction companies he works with throughout Atlanta try to hire veterans whenever they can because of their work ethic, accountability, leadership, and the fact that they are less likely to have substance abuse issues.
“We have a lot of veterans returning to the private sector and our economy is starting to gain momentum again, so I think the trend of hiring veterans is only going to increase. A lot of my clients in the construction industry have been expanding over the last two years, and knowing that they have an influx of reliable, effective employees who can enable them to scale up makes them a lot more comfortable doing so.”
The fact that veterans are four times less likely to engage in illicit drug use is a significant factor in the construction industry because there are a lot of dangers on the job site. This is true even in states where marijuana has been legalized, regardless of whether it's for medical or recreational purposes. Especially for construction jobs that require large vehicles or equipment regulated by the Department of Transportation, as federal regulations require a zero tolerance policy.
Where can employers find veterans to hire?
As veterans are transitioning out of the military, the best way to locate them is to identify the Transition Assistance Program centers across the country. Every day, hundreds of service members attend these classes in preparation for reentry into the private sector, and nearly all of these programs allow employers to freely post openings to their job boards, and will usually allow a representative from your company to speak to their classes. (This will usually require prior coordination with program organizers.)
Professional networks focused on the military and veterans communities, such as RallyPoint and Sandboxx are another effective way to contact veterans. With over 1.1 million registered and verified military and veterans, RallyPoint is currently the largest verified military network, and every veteran listed on the site has already provided documentation to prove their service. LinkedIn also boasts over 2 million service members and veterans.
If you don't have the time to conduct a search yourself, you could even connect with a recruiting firm that specializes in helping employers to hire veterans. The two biggest advantages with this option is that these recruiters already understand exactly how military experience translates into civilian skills, and they are actively tapped into the veterans community.
They key to success, as an employer trying to hire veterans, is to understand the correlation between the skills veterans have acquired during their time in service and the skills needed by their company.
To keep up with Walter’s journalism you can follow him @GentlemansHall on Twitter