October 2018

by Gregg Schoppman, FMI

Hiring talented individuals has become the latest in a long line on routine challenges for many business leaders. “We just can’t seem to find great people …” Whether it is exhausting the new channels of social media or tapping the old relationships in the recruiting world, firms have made it a full-time job to increase the capacity in their personnel pipelines. Too often, the pull of “just in time” labor seems to take precedence, short circuiting the need for process discipline and strict adherence to higher standards. The cost impact of a poor hire can be felt in many forms:

• Cost overruns—Labor inefficiencies, rework, cost mismanagement, lost change orders, poor collections, no billings, etc.
• Customer impact—Customer attrition, customer mismanagement, personality conflicts.
• Cultural misfit—Internal friction, morale depletion.
• Lost expenses—Training costs, “learning costs” (routine mistakes that a newer associate might make the first time).

In the end, hiring a manager that fails to make the cut can result in costs that may be double to quadruple the simple sunk costs of that person’s salary. This should enough to scare anyone to avoid hiring anyone, but the reality is that bringing on new assets is essential to every business. While hiring is only one step in the human capital cycle, it serves as a gate mechanism and should be approached with diligence and discipline.

Personnel Strategy

It is imperative that a firm answer its own personnel strategy. For instance, what is its approach to human capital? For instance, does the firm approach its talent needs through a greenfield, farm system model replete with rookies or does it tend to source personnel with industry free agents. Many firms most likely use an amalgam of these to supplement their ranks. While sourcing hardly appears to be a major cruxt, it will affect the overall approach to which a firm then develops its talent. For instance, the training and development program that a firm should institute for seasoned free agents should be drastically different than one for rookies. Figure 1 is a simple illustration detailing the potential curriculum of each group:

The main theme in the second column is the inculcation of this talented group into the firm’s philosophy and culture. While their building construction skills are commensurate with their industry tenure, there are more ingrained behaviors that need modification.

The other element to examine is the connective tissue between the firm’s corporate values and those of the individual. There are plenty of firm’s that simply adorn their office with placards espousing values but that is where those values end. Firms would be better suited to ensure alignment in their hiring models. For instance, Figure 2 depicts a scenario that demonstrates a stricter alignment:

Most of the elements are intuitive. There are probably few examples of firms that seek out someone who is dishonest. The challenge comes when evaluating a talented candidate to ensure alignment. How does a firm hire for honesty, short of connecting a candidate to a polygraph? One avenue to explore is the deeper use of questions that are focused on areas specific to core competencies. Rather than the perfunctory “Tell me about your work history …,” questions dial into these attributes. Such as “Tell a time where you had to truly demonstrate innovation.” However, superficial questions become the go-to playbook, especially when disciplined hiring goes out the window.

Competency-Based Hiring

Competency-based hiring is hardly new. In fact, Michael Lewis, author of The Undoing Project, explores this concept in everything from the NBA Player Draft to analyzing talent for the Israeli military. Firms wrestle with how to drive the right questioning to gather meaningful results. For instance, asking a candidate to detail their vast experience is very tangible when compared to asking them how they solved a difficult negotiation. The entire hiring philosophy needs to be flipped on its head, as shown in Figure 3:

In fact, the top line should be maintained but simply serve as a filter to get to the next level of screening. For example, assuming a project manager has the applicable level of experience, the interviews focus on the intangibles. To do this effectively, the firm must define success for each position within their firm. What does the best project engineer/manager/superintendent exhibit daily that makes them successful in OUR ENVIRONMENT? See Figure 4.

With the core competencies defined, a firm can now articulate the right questions for each interview:

• Project Engineer:
  • Intellectual Curiosity
    • Why did you get into the construction industry?
    • How do you keep yourself stimulated?
    • How do you keep up on new trends in the industry?
  • Self-Starter
    • What type of manager do you require?
    • What motivates you in your work life?
    • How do you keep yourself motivated when doing tasks that might not be the most “glamorous”?
  • Solution-Oriented
    • Tell me about a project you recently completed (at school or work) and what were you solving for.
    • How do you manage projects in your personal life?
  • Flexible
    • Describe a time where you were pulled off a project only to start a new assignment.
    • Describe a management style that frustrates you.

Ultimately, the competency will dictate the rationale of questions. In some cases, there are no wrong answers but seeing how the candidate responds will provide a brief glimpse into potential sticking points. On the other hand, if a firm was hiring for a “Design-Build/Conceptual Estimator” and the candidate failed to exhibit a comfort level with a competency such as “Dealing with Ambiguity,” the answer might be on the table.

Skill Testing

Construction organizations have begun to add various testing to their cadre of tools. DiSC, Proscan, Myers Briggs, Predictive Index, etc. provide firms a new dynamic with which to gauge personality fit. However, how many firms use these tools to ask the right questions? For instance, in the case of a “Dominant” superintendent, should the following questions be added to the process:

• Describe a situation when a subcontractor or tradesperson let you down.
• How did you handle the last time you had rework on a project?
• How would you define a successful project manager/superintendent relationship?

On the surface, a dominant superintendent might be exactly what is required but evaluating the magnitude and depth of that dominance might ensure a cultural match.

Additionally, best-of-class firms are now considering other forms of testing to ensure there is capability matching competency. For instance, as is inspired by firms like Google, there is a higher value placed on the use of case studies:

• Scenarios—Placing the candidate in a routine situation that carefully examines how they solve problems—e.g. Your project is behind schedule and it has had two straight months of margin erosion. The customer has asked you to price an additional scope of work. Describe the strategy and tactics of how you would manage this project moving forward.
• Skill Testing—Whether it is a math test for superintendents or a small mock presentation for a business development manager, the firm can grade raw skill in a safe setting.
• Critical Thinking Experiments—Much like Google, implement critical thinking skill testing. This becomes less about their answer—which in many cases is irrelevant—and more about HOW they solve problems—e.g. How many golf balls will it take to fill Wrigley Field in Chicago?

In the end, the filters and tools abound when it comes to securing the right talent for an organization. However, it comes down to a willingness to adhere to the process and discipline to stick by the results the process yields. Many firms become fixated on a candidate for all of the wrong reasons and they look back at the wake of disaster it caused. There will be plenty of challenges in the hiring process and plenty of lowers slipping through. However, the onus lies on the firm that simply uses the “fog test” to screen talent.

As a principal with FMI, Tampa, Fla., Gregg Schoppman specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. Prior to joining FMI, Schoppman served as a senior project manager for a general contracting firm in central Florida. He has completed complex and sophisticated construction projects in the medical, pharmaceutical, office, heavy civil, industrial, manufacturing, and multi-family markets. He has also worked as a construction manager and managed direct labor. Furthermore, Schoppman has expertise in numerous contract delivery methods as well as knowledge of many geographical markets. He can be reached at (813) 636-1259 or gschoppman@fminet.com.

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