Category: Employment

References

There must be a fair amount of movement in the construction job market as I have had over a dozen requests to provide references in the last couple of weeks. I do not have an issue with providing them, but I like to be forewarned by the candidate they have given my details as a potential referee.

Usually the reference request is from a recruitment agency and they have a set list of questions. But to me, the most important one is would I employ the candidate myself. I might not particularly like the person but if they have the ability, experience and willingness to be a key team player, then no problem. I never want to hinder someone’s search for employment but if I am unaware they are looking, and give me the opportunity to give them some straight advice, the reference they get might not be what they are expecting. Last week I was asked my opinion on a candidate who had not let me know their intentions and the role they had applied for was completely beyond their capability. They did not make it to interview and I would have told them they were aiming too high.

References are usually sought from someone who the candidate reported to. If I was asked to provide a reference for myself I would do it in reverse. That is I would offer the insight from someone who I had hired and reported to me, from cadet to project manager it makes no difference. Potential employers would not appreciate this tactic but if I were hiring, I would gain valuable insight in speaking candidly to a candidates’ direct reports. They have worked closely with the candidate and know them probably better than anyone. This might give some of my previous hires great satisfaction as sticking pins in effigies of me seems like hard work!

Large or Small Contractors

smb-quality-managementI have had the good fortune to work for many varied construction companies. Ranging from very large international conglomerates to small “mum and dad” businesses. Both types have advantages and disadvantages but which offers the best environment for employees. I started considering this after spending two days interviewing for staff. Not senior people but a mixture of junior quantity surveyors, graduates and others embarking on their careers in our industry. They all had a similar goal to be project managers on large projects within a large construction organisation. They all believed best practice, the most experienced staff and the best career could be achieved within those types of company. The idea of working for a small or medium sized business wan an anathema to them.

When I interview potential staff I look for potential, energy and commitment. I may not necessarily like the candidate, in fact I prefer the candidates who I do not take an instant like to rather the opposite. I look for people who can, in time, do my job better than I can do it. I also have issues with strict selection criteria and believe in sometimes adjusting the role to suit the person.

So, which is better, a small/medium business or the big corporate behemoth. The main attraction to the small/ medium company is employees know what is going on within the business whereas in the large company with it multitudinous layers of management, employees get isolated on projects or restricted within the silos of estimating, finance, HR, IT, or other head office cells. In a smaller company, there are no hiding places and talent and commitment is more easily recognised.

Having worked in both camps it is interesting to look at gross profit, overheads and EBIT. The big end of town with their $100 million plus projects tend to be union dominated, with a small pool of approved” subcontractors which means tendering is extremely tight, with the same major contractor trying to cut their own throats to win jobs with a two to three percent margin. These projects are usually design and construct which means they need to understand that process and have the people on board to manage it. They often do not understand the process and do not have enough experienced people to manage value engineering, control novated consultants, and manage the projects commercially. Added to this is the millstone of head office overheads which the projects must support, including hanging on to staff between projects completing and commencing.  This is compounded by the simple fact large contractors pay their staff too much. At the end of the financial year many large contractors are struggling to make a positive EBIT.

The smaller contractor is not weighed down with union pressure, high salaries and overheads are kept to an absolute minimum. Which means their tender margins are higher and their net profit (we don’t here the acronym EBIT in this environment) is higher. Because their projects are of a lesser value, they turn them around quicker so one bad job is not the end of the world.

My personal preference is the small/medium size business which has several income streams: new construction; small developments, refurbishments and fit outs. These businesses can change direction quickly and the owners are usually heavily involved not just in the business management, but they know their employees, subcontractors and clients inside out.

Into the Unknown

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Well I finally bit the bullet and decided to go solo. I have always relished the idea of working for myself and now I am on my own away from the corporate comfort blanket and all the other nonsense that entails.

Setting up your own business is very straightforward and I have one simple goal, that is to enjoy what I do day to day. It is not about making enormous amounts of money, it is about being happy.

To date I have not canvassed anyone, cold called companies or called upon colleagues and friends in the construction sector. Simply because I have been too busy dealing with clients who have sought me out. There are a lot of distressed projects and many builders and subcontractors who simply need some assistance.

In Australian capital cities there has been a boom in high rise apartment developments. With any boom there are casualties. Developers unable to make final payments to builders because apartment sales contracts have fallen through, subcontractors being strung out by builders, everyone blaming each other for their losses on projects. When you roll your sleeves up and get into the nitty gritty of the problems it usual is caused by companies taking work on without understanding risk and then they employ staff who do not know how to manage risk.

So I get approached to “fix” a project and very quickly identify it is not the project but the way the company is organised to handle projects in the first place.  The project may never achieve its tender margin but sometimes the damage can be reduced. Fixing the business is the key and usually it all relates to the contract that was signed and the way the procurement is managed.

I was hoping to get away from the sixty hour working week in the corporate world but the potential workload may keep me even busier – if I am not careful!

Premdale Consulting 2017

Pastures New

3169262303_de9262f5d8_qWould you sign a job offer without checking the salary package, well I did recently . Was I desperate to leave my employer, no. They are one of the best employers world wide. Had I gone against everything I preach about risk management in construction, no. Had I simply taken leave of my senses, again no.

There were many reasons for, what some would see as a radical course of action, but to me it was simple. I was joining a business where I could make a difference, where i would have relevance and a part in shaping the company’s future. Not just an improvement to their bottom line but a difference to me personally.

The dollars were not important it was the opportunity to work with bright, motivated and like-minded people who matter most. Interestingly after signing I discovered the dollars were a pleasant surprise. But was no surprise was the buzz in the company, the determination to achieve and to enjoy the journey ahead.

Censorship in the workplace

CensorIt is fair to say that almost all bloggers have a day job, but carry out their blogging activities in their own as opposed to the company’s time. But that does not allow employees to blog about certain aspects of the business in which they are employed. But how far can companies go in restricting what bloggers put out on their sites.

Most companies have policies regarding computer usage and confidentiality. But some companies are raising the levels of what an employee can say or blog to a point where they want to vet everything an employee has to say. Often it is an individual manager that wants to control their staff above and beyond what the company guidelines provide for.

So what does an employee do if they are faced with a controlling manager. Simple. If the blog does not refer to, imply, make reference to or in ay way breach the company guidelines, tell the manager where to go. If that results in a stoush and if it is allowed to continue, then it is not the kind of company you want to be employed by. Time to “Ramble On”

So Long, and Thanks for All the Fish

TC 1 and 2Once again I will be bidding farewell to a colleague this week. Not to the great high rise in the sky, but he is off to pastures new. So as always  I will write on the farewell gift card a quote from good old  Douglas Adams the above memorable line.

I have worked with some truly remarkable people over many years, in many countries, on a myriad of projects. But there are only three of them who I have learnt something unique, and the guy who is leaving tomorrow is one of those three. So what makes these three so special? Out of hundreds of people I have worked with, why should they stand out from all the rest.

They are all very different but share some key characteristics: charismatic leaders; very bright and inspirational; but above all their frightening honesty. The honesty manifests itself in how they manage to get individuals to perform better as a project team than they could ever achieve as individuals. They manage this be looking people in the eye and telling them straight what is expected, when they have succeeded and when they have stuffed up.

These days honesty is in short supply. We are bombarded with spin and pseudo reality, employment longevity is often determined not by how good you are at what you do , but by how you fit in. The honest leader is not perceived as the best leader, when in truth he is the leader people want to have supporting them.

So I wish my colleague well in his new endeavour, and the enterprise he will embark upon will be successful and a place where many would want to be.

No Subcontractors Thank You

CranesI recently struck up a conversation with a stalwart of the construction industry here in Brisbane. He had worked for the same company for over forty years. He started out as an apprentice, became a leading hand, foreman, site manager, and now a senior member of the construction management team. So we did what most of us construction survivors do, we exchanged war stories.

A common theme soon developed – most construction companies have forgotten how to be builders. Forty years ago we had a stream of apprentices who were the company’s future. Senior managers rose from the ranks based on ability and experience.

But the key point was that builders used to employ their own tradespeople to carry out the work with a very few specialist subcontractors. Nowadays a project manager is measure on how he can organise a rabble of subcontractors. If he is inefficient and disorganised, it costs the subcontractor. Using your own labour means if you are not organised it costs a fortune. To be organised you need to know how to build.

It could be argued that most construction companies set up a project with the minimum of their own staff, subcontracts out every trade, hire the cranes, hoists, scaffold, and they don’t even own a wheel barrow.

Of course the reason is simple. The client pushes the risk on the construction company, and in turn they push it on to the subcontractor. You cannot back charge your own labour force but it is easy to do it to the subcontractor. This style of project management is run on the same format as a shepherd herding sheep. As long as they are all moving in the right direction, just leave them to it. So the project manager herds the subcontractors and they build it.

This may be the norm in commercial and residential construction but is not the same story in the resources sector. Companies on mine sites tend to employ more of their own labour to carry out what would be subcontract trades. This is mainly due to the control exercised on the construction companies by the mine owners. However, due to the magnitude of these resources projects, there may be several joint venture construction companies who find themselves being treated by the mine companies in the same way a construction company would treat their subcontractors. They don’t like it, because being a subcontractor these days is the end of the food chain, having the biggest risk of not being paid but with all the responsibility that goes into a two hundred page subcontract.

So back to the construction stalwart. He is disillusioned with the industry he has given forty years to, he despises the short slightness of people who won’t employ apprentices, he shakes his head at Google Glass wearing, iPad toting project managers, wants to punch the light out of the Harry Potter lookalike who pays the subcontractors. But he still is cheerful as he can always look at his mark on the landscape that is he can take his grandchildren to see and touch not the jobs he managed but the buildings that he built.

by Gerry Keating

https://gkeating.com/

Hand in your badge and gun

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A project manager mate of mine arrived at his site office last Friday. He was greeted with the normal scene: union delegates arguing about subcontractors having the audacity to employ people who are not 100% unionised; subcontractors with not enough resources; and emails from the client’s representative refusing perfectly valid variations. He had made a decision which would upset head office and may make him a pariah as far as future promotion was concerned. He was taking Saturday off to have a full weekend with his wife.

Although his annual salary far exceeds the “average Australian” if it is divided by the number of hours he works, his hourly rate is less than a site labourer. But he has a passion for construction. That passion cost him his first marriage, drove him to the occasional drink, and evolved him into a dad his children did not know or particularly like. But his passion was a major factor in driving him to deliver project after project for his employer.

As Friday wore on, and the normal dramas of the day were crossed off the to do list, he decided it was time for his daily “walk about. However, as he reached for his hard hat, he received a text from his operations manager. Not a personal visit or a phone call, just a text which read verbatim: “Company ceased trading, get everyone off site, lock the gates, take only personal belongings report to head office immediately”. Yes the company had gone broke.

This has happened to many of us in the construction industry, we end up with broken relationships, heart attacks through stress, and the stigma that goes with having been the PM on “that job, for “that mob” who screwed their subcontractors. Sometimes the bloke delivering the project gets screwed as well.

Now he has to wait and see if he will get his entitlements, find a job, and still keep his passion for his next employer. His comment to me “Well at least I have finished paying child support, I think it is time for a spot of fishing”

So if you are reading this mate, go easy on the Johnny Walker, enjoy the fishing and it may be a good idea to take your wife with you or you might get made redundant there as well, then you will be looking for wife number 3.

by Gerry Keating

Back Home to Brisbane

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Home is Brisbane

Having spent so much time working in different parts of the world sometimes you forget where home really is. Moreover, I have met many ex-pats who may have many assets but have no base – no real home. It is taken me a long time to come to the conclusion that not only is my home in Brisbane but so is my heart.

I have lived in Brisbane since 1989 but have spent more than half of that time either working overseas or in various far flung construction sites in every state of Australia. Coal mines, iron ore processing, commercial building, water treatment plants, meat works, high rise etc etc. Now I just want to live here, no more FIFO, no more cheap motels, airport lounges nor hire 4WDs. OK the construction industry here is on the slide, the boom years are over and over the next twelve months there will be even more builders going to the wall or sacking staff.

Recently I have been asked to head back to Perth, I have been approached to return to Qatar to build football stadia for the World Cup. But I declined, they can keep their money I simply want to sleep in my own bed each night.

Who would want to live anywhere else?

by Gerry Keating

The Three Rules

OK there is nothing worse than unsolicited advice and over the years I have been given lots of it. I may have given it out as well, probably with good intention rather than malice aforethought. But when I filter through some of the nonsense purporting to be good advice, I discover there have been a few gems. This is about the three rules of business and they could not be simpler:

  1. Don’t have partners
  2. Don’t employ anybody
  3. Always use someone else’s money

Yes it sounds a bit twee but if you strive towards these and consider them goals more so than rules, then they have some merit.

Partners

They cause the most concern. People change, people get greedy and before long you end up with a committee style management  were individuals do what they always end up doing, they look out for themselves

Employees.

Who in their right mind would want to employ anybody these days. Unfair dismissal, payroll tax, theft etc. you train them and then they take everything they have learnt and either use it for the next employer or for themselves.

Money

We all know in construction there is a merry go round of clients paying contractors and contractors paying subcontractors. In most cases everyone is waiting to get paid whilst the costs of running their businesses just keep coming in. So we end up funding the very people who owe us money and how do you build that into shrinking margins.

It is a simple task to highlight the problems of standard companies with partners  employees and overdrafts, so what is the ideal business. I reckon one of my good friends has the answer. He buys electrical cable wholesale. The kind that is used in domestic situations. It is sold in hardware shops, it never changes specification, unlimited shelf life and a large amount can be stored in a relatively small area. He has a simple machine which unwinds the large cable drum and winds it onto smaller cable reels, then he has it picked up by couriers and sent out to he various outlets he services. The business consist of him, his machine and space under his house. On delivery the payment goes straight into his account so he is always paid before he has to pay his supplier.

He has no partners to consider, no whingeing employees, always cash positive, earns a very good income and above all – he is happy doing it.