The War for Talent
Business is good, even robust, for many of the AEC firms on BD&C's Giants 300 list. But rapid growth brings with it recruitment and retention headaches for top executives.
"The No. 1 issue for us is people—finding good, strong people with the right education and training, and being able to retain them," says Thomas Leppert, chair and CEO of Dallas-based Turner Corp. (C 1, CM 17).
The shortfall in talent has global impact, says Carl Roehling, president and CEO of Detroit-based SmithGroup (A/E 8). "The number of licensed architects in the country has dropped dramatically in the last 3–4 years, and the number of people taking the exam has dropped about one-third," says Roehling. "For us to thrive, we need a talent pool to drive the firm." Roehling says competition for staff is particularly acute on both coasts, especially on the West Coast, due to the boom in hospital construction in California.
"When we struggled in the economy of the early 1990s, a lot of people left the industry and didn't return," says Merle Bachman, president of HDR Inc. (A/E 4), Omaha, Neb. "We want to make sure we create that next generation of leadership."
M. Arthur Gensler, Jr., chair of the nation's biggest design firm, says, "There's no question that getting key people is a big issue for us, and for our consultants." He says many engineering firms that Gensler (A 1) works with are struggling to find engineers. "Young people today don't wake up in the morning and say, 'Gee, I want to do ductwork for the rest of my life.' They can't get people, and they can't get the quality ones."
"The personnel shortage is real," says E. Brian Smith, president of careerSMITH, a Newport Beach, Calif., construction and engineering recruitment firm. "But there's no silver bullet to solve recruitment and retention problems."
Smith says firms need to actively recruit at colleges and universities, give new talent interesting work early in their careers, offer responsibility commensurate with talent (regardless of age), and provide mentoring and continuing education.
Get 'em while they're fresh!
Most large AEC firms actively pursue entry-level professional personnel on a regular basis. "We like to bring people in young, train them, groom them, and then put them into positions of leadership," says SmithGroup's Roehling. The trick, of course, is to find the best newcomers.
"It's a long-term effort," says John Mahon, SVP and director of human resources of St. Louis-based HOK Group (A/E 1), the largest A/E practice in the country by revenue, with over 1,600 professionals. HOK has alliances with universities in the U.S. and other countries, participates in career days, and offers internship programs—all standard practices for Giants 300 companies.
But HOK also leverages its brand and size, reminding potential recruits that the firm does a wide variety of projects, including overseas work. "The scope and breadth of the company is definitely a selling point," he says. "It also doesn't hurt that a sports stadium we've designed is on TV practically every Sunday."
Gensler (an editorial advisor to BD&C) says his firm successfully recruits at such major universities as Cornell, Cincinnati, Rice, USC, and California (Berkeley), but occasionally meets resistance at other architecture schools.
"The faculty has a tendency to push students into the signature black-cape or boutique firms, and I don't understand that, because we have so much impact on the world," he says. "They don't recognize that the profession has changed. It's a business with a lot of responsibilities and impact on society, and there are firms like ours that are doing things beyond single buildings. All we ask of the deans is to let us tell their students what it's like to work for a global firm."
Some firms have specific recruitment needs. For Gilbane Building Co. (C 14, CM 6), Providence, R.I., the hardest slot to fill is in "business development"—in other words, sales. "We need people who can bring in the business," says president/COO William J. Gilbane, Jr. "We're all builders, so it's easier for us to build a building than it is to sell the job."
His strategy: Hire successful salespeople from related industries, then train them in "the Gilbane culture." It seems to be working: Gilbane's contracting business increased 284% last year.
Scratch that itch!
Once new talent is on board, the retention process should begin right away. Integrating people into the company culture is critical, says Bob Dinks, VP of human resources for North American operations at CH2M Hill, an Englewood, Colo., engineering firm (including Lockwood Greene, E/A 4) that employs about 14,000 worldwide.
"If you don't have an effective on-boarding process, new people left on their own will become frustrated over time," he says. "That goes for all levels of the organization, even the most senior positions. You'll hurt yourself if you don't have established methods for on-boarding, and people who spend time with new employees."
Greg Surufka, COO of the 300-person Chicago architecture firm OWP/P (A/E 36), agrees. "We have large and small projects, and we give new employees the benefit of that mix," he says. "We don't give them the same jobs over and over."
Retention of mid-level people in some ways is much more difficult to manage than recruiting new graduates, since mid-level people tend to know better what they want from their careers—and the industry is rife with headhunters.
"A lot of companies lose people at 5–7 years out," says Smith. "That's a point at which people start re-examining their choices. Sometimes it's just a seven-year itch, but other times it might have a specific cause. For example, the company might want them to work Saturdays too often, and they want to enjoy their weekends."
Smith notes that all too often companies don't ask their seasoned workers what they want in terms of career development. "Once or twice a year you have to sit down with mid-level people to understand what they want," he says. "Are they willing to travel, to go overseas? Need a new challenge? Sometimes it's difficult to ask the right questions. But it needs to be done."
Don Johnston, VP and general counsel of Chicago-based James McHugh Construction (C 62), says, "It's always a problem to keep your mid-level people. If they're talented, you have make sure they're on track for increasing responsibility. When you have someone that's good, you have to make sure that you use them."
Top executives at the Giants 300 agree that the hardest position to fill is what Turner's Tom Leppert calls the "project executive"—the rising star who can step up and become CEO of a project. "You want an individual who has all the technical capabilities, but also a business sense, because they are in effect running a business," says Leppert. "They need to manage not only your own people, but also others—architects, owner reps, and subcontractors." This requires leadership skills, financial acumen, and a problem-solving mentality, he says.
"It's simply not good enough to be a good technical builder," says Leppert. "You also have to have that sensitivity to the client, to be able to solve problems to lead to success. We don't want our people to be project focused, we want them to be relationship focused."
Identifying that take-charge person assumes special importance when opening up a new office. "When we expand, the key is to get the right leadership in place," says SmithGroup's Roehling. Last year, when the firm plunged into the Twin Cities market, they brought in Rebecca Nolan, a Minneapolis native who was serving as president of the firm's California operations. That office is already well ahead of revenue projections, he says.
But not having the right person in charge can also doom an expansion. "We had an office in the Philippines and it was not successful, primarily due to not having the right people," says Roehling.
Accelerating the learning curve
Professional education can also be a retention tool. Many firms pay for the cost of continuing education courses, travel to conferences, and specialized training. Such efforts are viewed as adding to the employee's expertise and encouraging greater loyalty to the firm. (For more on continuing education, see page 80.)
Old-fashioned mentoring is another tool. Some companies take the less-structured approach. "While it isn't a formal mentoring program, a lot of project managers stay with the same person for a long time, so there's elements of mentoring," says McHugh's Johnston. "It's an informal mentoring program, but it works for us."
Global architecture firm NBBJ (A-2), headquartered in Seattle, has a rigorous in-house professional development program, which it calls Leading Change.
The nine-month program starts with a battery of assessment tools, followed by sessions with consultants and a psychologist, then a three-day intensive retreat to give participants the tools to work on case studies and role-playing. Monthly group meetings introduce new topics or tools; participants also meet with their coaches a few times a month to work through client- or project-related situations. On the last day, teams give group presentations and pass along lessons learned.
"This is our fourth year, and about 100 people have gone through the program," says Brigitte Dillman-Cruce, NBBJ's associate professional development manager. "There aren't any hard-and-fast numbers on retention, but several people have told me they would have left the firm without it—it was more important to them than a raise."
NBBJ also sponsors the "Oregano" program, which sends small groups of employees on two-week architecture tours. Larry Goetz, a senior associate architect who went to Central Europe in 2004, said the trip allowed him to discuss great buildings with people from the firm's London, New York, and San Francisco offices.
"There was a lot of camaraderie," he says of the trip, which took in Vienna, Budapest, Prague, and Krakow. "It definitely strengthened bonds within the firm"—an important retention consideration in firms with widespread offices.
Brian Zeallear, an architect with the firm's healthcare studio who went to Hong Kong and Shanghai earlier this year, agrees. "What's really great about the trip is that it allows you to share in the culture of the other offices," he says.
This year's trip, which focused on urban planning, offered participants exposure to members of the firm's newest offices in Beijing and Shanghai. "It was fascinating to learn about how they do things," Zeallear says, calling the trip "a very valuable experience," presumably one that will keep him interested in staying at NBBJ for some time.
Free trips, mentoring, career development—great! But what about cash?
Within reasonable bounds, money is rarely the deciding factor in whether people stay with a firm. "You have to pay right, but money's usually not the main issue," says McHugh's Johnston. "I can think of two or three people who left us for more money, but then ended up coming back."
H. Ralph Hawkins, FAIA, president and CEO of Dallas-based HKS Inc. (A/E 5), says retention is all about "relationships, creativity, being able to learn"—and values. "We found that some people were not sharing our values, and we had to get rid of them. But there was renewed energy in the firm after we did that." Hawkins says turnover at HKS is half the industry rate for a firm of its size.
Firms also are reacting to demographic and lifestyle issues. SmithGroup's Roehling says the growth in the number of women in the field and the trend toward people retiring later in life are already having a profound impact on firms. "That's going to change the way we practice, and we're going to have to adjust to that," he says.
Many executives are concerned about the stress level of today's work environment. "I worry that everybody is working very hard and the pace is faster," says Bill Gilbane. "The technology is making us all nuts. We'll have a meeting and I'll tell everyone, 'Turn off your BlackBerry!'"
He says Gilbane is trying to reduce business travel as much as possible. "We want our people to go home at night." Still, he says, "I worry big about burnout and the impact on families."
Investment or overhead?
Make no mistake: Recruitment and retention don't come cheap. NBBJ's Leading Change program, for example, costs about $7000 a person.
CH2M Hill's Dinks says it's important to look at recruitment and retention costs in the right way. If you don't have separate HR staff to handle these issues, other people in the firm will have to do it.
"There's no free lunch," he says. "You're going to go through the same steps whether you use a dedicated recruitment staff or your existing staff. A company that uses existing staff is kidding itself if it thinks it's saving money."