Bracing Your Business for Bust Periods
Right now, we’re in the middle of a fantastic boom period in the construction market; new projects are kicking off left, right and centre, and jobs are plentiful. However, we all know that the construction industry is one of peaks and troughs. Due to the project-based nature of the industry, for every boom there is an equal and opposite bust. It’s important to protect yourself from the havoc this can wreak on your workforce, and be prepared for the inevitable sea of changes the New Zealand construction industry experiences. Here are a few of my favourite tips to ensure your best prepared.
While the cyclical nature of the industry makes it easy to become reliant on short-term fixes, this type of workforce planning has its drawbacks in the long run. Ideally, you want your workforce to be made up of a core of permanent staff whose primary goal is to keep the business operational, who are then supplemented by contractors who provide specialist skills in key areas, or support your team when workload necessitates it.
When the focus isn’t on short-term solutions, you can take more of a long-term outlook when it comes to hiring. While going for the candidates that have room to develop rather than the perfectly qualified ones off the bat may seem counterintuitive, it can be extremely productive. Hiring a person based on their potential can garner huge rewards for your company if you help them to reach it. Giving someone with less experience a chance will build employee loyalty. It also makes it easier for you to focus their development around the core capabilities you require, as well as your company’s values; things they will then pass onto others when they become leaders within your business.
The other side of figuring out which employees you want to help support and develop long-term, is identifying which employees are worth supporting through the tough times. Businesses don’t want to funnel their time and effort into someone who is going to jump ship at the first opportunity, or a person who has the skills but who is detrimental to team spirit and company culture. Assess your team regularly and ensure you have performance management standards in place so that you have a measurable framework to compare people within.
Looking at strategies that have worked for other organisations or even industries gives you an insight into how to maintain your workforce in the long term. Sometimes you need to get creative, just because it’s unconventional doesn’t mean it won’t work. It’s important to keep an open mind, you never know when and where you’ll find a hidden gem.
Take Advantage of The Contract Market
While I did say that shrinking your contract workforce is a good idea during a difficult time, there is also another side to this. Due to their specialist skillsets, contractors can be extremely useful, especially in the short term. It’s likely that different specialisations will be required for different projects, so rather than keeping someone with those specialisations on permanently and paying for skills that may not be used frequently, hiring a contractor to fill in the gaps can actually save money in the long run.
Don’t Discount International Talent
There also the matter of the international talent market. There are good candidates with great experience beyond our shores, and in an increasingly competitive construction market, it’s useful to keep an mind to sourcing talent overseas. Lots of companies in New Zealand are recruiting from the Philippines or the UK, and here at RobLawMax we have helped many organisations to recruit top construction talent from those markets.
While this generally comes at a cost, and isn’t advisable in a down time, you can still extract long-term value from these workers if they’re with you during or approaching a bust period. They’ll have been through ups and downs in the industry before, and their experience will mean they know how to get your business through a tough time. That experience can also be used to your benefit your team long-term by providing mentorship to others, passing on their knowledge to newer or younger members of your business and setting you up for success.
Construction is an industry of ups and downs. Inevitably a boom in the market is followed by a bust period. If you’re looking for ways in which to prepare yourself for the trough that follows the peak, and ensure your workforce is secure, contact us to see how we can help you build the right workforce mix.