All too often companies cut investments in people development and talent management when times get tough. It’s an easy cost to point out and reduce, especially as many construction firms have increasingly complex budgets and operations. Yet, this can threaten the future leadership of your company since emerging leaders won’t have the opportunity to acquire necessary skills to take on new management positions.
As outlined in our 2020 FMI Leadership and Strategy Survey, Leading Through Business Cycles: Lessons Learned from E&C Executives, downturns can create opportunities to invest in attracting, developing and retaining top talent. FMI’s research shows that those who continued to allocate funding to people initiatives experienced higher profit margins post-recession compared to other groups.
Furthermore, many emerging leaders and future executives in engineering and construction weren’t in executive or leadership roles during the last downturn—and have mostly led through tremendous growth. Put simply, as we head into 2021, young and emerging leaders may need to acquire new skill sets in order to lead through uncertain and possibly turbulent times.
“One of the things I wish we had done in the downturn is invest in people,” an industry executive said. “We are paying a price for that right now; we are constrained in terms of number of skilled leaders. In a future downturn, I hope we don’t overreact. We need to have plans in place. The last downturn was bad; I don’t want to brace for the apocalypse, but we must be agile enough to react either way. I don’t want to overreact and let a bunch of people go that we end up needing. Instead, I want to keep the crew steady and invest in those people.”
This is a people industry
In our most recent AGC/FMI Risk Survey, 80% of respondents said their biggest challenge was the limited supply of skilled craftworkers. In addition, the lack of field supervisors was second on the list, with 44% of those surveyed saying it was a risk to their operations, underscoring the importance of having a strong leadership pipeline in place.
Those companies that kept top talent and invested in training during the last recession wound up on the right side of the ongoing competition for skilled leaders. Instead of just letting people go, they came up with creative solutions for retaining their key players, including reducing salaries for top executives in order to retain and develop star employees.
Investing in people should be part of your strategy
If your ongoing learning and development efforts are average or poorly connected to business objectives at hand, why not cut them? The challenge is that learning and development activities, which are closely tied to the business (and where it is headed), take more time and effort.
But the payoff of connecting your business strategy with your training strategy is immense. You’ll create a pipeline of leaders who understand planning, strategic initiatives, and the importance of investing in your people and company. It’s critical to look at your leadership training holistically and implement a long-term plan for success.
That’s where FMI can help. Our Leadership Institute offers the essential skills needed to lead a construction firm now and in the future. We offer the course in-person and virtually, as well as onsite at your facility to create an experience that best fits your development needs. We’re here to help you make sure your emerging leaders have the necessary skills to take your business into the future. You can’t afford to stop investing in your people. Contact us today to learn more about how we can help.