3/10/2020

By Wayne Rivers, Family Business Institute

Construction firms and their owners are good at a great many things, and we've extolled their strengths and virtues in other articles. One thing, however, that contractors are not particularly distinguished at is recruiting, hiring, training, and retaining outstanding talent.

Because this situation is so critical in our industry now, it's time to address some of the pervasive flaws in construction hiring. What are some of the root causes that cause contractors to have weak, atrophied muscles when it comes to recruiting and hiring, and, more importantly, what might they do about it? 

First, what's the downside of a poor hire? It's hard to put a figure on an opportunity cost like this, but talent management firm TEKsystems claims that replacing a terminated employee costs an employer between two- and seven-times annual salary! They also say that hiring and training a new person costs between 25% and 200% of that individual's annual compensation. There are all kinds of similar statistics floating around out there, but the bottom line is this: Getting the wrong people on or off your bus is expensive!

What are some of the reasons that contractors remain poor at hiring? 

1. They often don't have well-developed hiring systems.
   
   
2. Senior leaders devote insufficient time to hiring and HR in general.
   
   
3. Senior leaders have undertaken insufficient training for proper hiring.
   
   
4. The Number One reason: contractors want to “get back to work" and treat hiring and training as necessary evils intruding on their desires to manage projects and get new ones underway.

Contractors dramatically over-rely on the most flawed evaluation tool known to mankind – the unstructured personal interview! The book Sway: The Irresistible Pull of Irrational Behavior by Ori and Rom Brofman details some of the hidden psychological forces that lead usually rational contractors to disregard facts and logic and behave in surprisingly irrational ways. They liken the unstructured interview format to falling in love with a college sweetheart. Their research discovered that objective third-parties (e.g. college roommates and parents) were far better than the sweethearts themselves at predicting a budding relationship’s longevity.

The reason for that is the parents and roommates were "observing the relationships from the outside without new love’s rose-colored glasses. Indeed, across-the-board students were more optimistic about their relationship prospects than were their roommates. Least optimistic of all were the parents. The unstructured personal interview is alarmingly like dating: there is only a small correlation between the first date (unstructured job interviews) and job performance. The marks managers give job candidates have very little to do with how well the candidates will actually perform on the job.”

That's easy to understand; anyone who has reasonable intelligence can do a fairly good job of making a business case for their hire during a 30- to 90-minute job interview. Most interview time is devoted to unproductive and uninformative talking and conversation, and we don't mean talking by the candidate. In so many interview sessions, contractors act as if they need to sell the candidate on their companies versus the other way around.

Brofman and Brofman compiled a list of the top 10 most commonly asked interview questions, and they are usually open-ended ones like "What do you consider to be your greatest strengths and weaknesses?" or "How would you describe yourself?"

These questions simply don't compel applicants to reveal very much about themselves in an honest or useful way. An interviewee is never going to say, “I have a drug problem and I stole from my last employer;” no applicant with reasonable intelligence is going to throw himself- or herself under the bus!

So, what's the answer to poor hiring practices?

First, make getting the right people on your bus your top priority! McDevitt & Street, the legendary general construction firm, went so far as to make their mission statement, “We recruit, hire, and train the best people.” No mention of quality, schedule, owner, or anything else typical of a GC mission. Their focus was 100% on acquiring the best talent and letting their terrific people propel the company forward.

Second, in your interviews focus on facts, the candidate’s specific work outputs, and past examples of work instead of pie in the sky conversation and big picture verbal grandiosity.

Finally, get other people on your team involved! Allow them to observe through their own eyes and comment freely on what they see as a candidate’s strengths, weaknesses, and cultural fit. If it's true that two heads are better than one – and it is – then getting the collective intelligence of other valued people in your company makes perfect sense.

It costs too much time, money, and emotional turmoil to allow your next hire to be a flop. Make getting the best people your focus, apply these three techniques, and save yourself a lot of trouble while simultaneously improving the quality of the people with whom you work.