Builders have by necessity become masters at finding property in places where land is considered hard to find. Increasingly, though, home building executives are coming to grips with another hard reality: The limited supply of land is no longer the only shortage the industry is facing. Exponential growth is creating a chronic need for new managers—from community sales management positions right up through the ranks. It's not just an issue of recruiting more managers, builders say. It's also a matter of finding a new generation of supervisors that can manage the complex and often highly specialized work necessary to make high production home building divisions ever more productive.
“Just imagine a typical neighborhood that requires two to three field managers and two sales agents per neighborhood,” says Steve Nellis, vice president of recruiting for Centex Homes. “Today, we have over 500 neighborhoods. That's a lot of bodies.” And the number of communities is growing 20 percent a year or more for many top builders. Then there all the other positions needed to support that growth, from land acquisition specialists to quality control engineers.
As a result, companies are struggling to find and attract quality talent that meets the industry's continually emerging needs.
That was never more evident than at January's International Builders' Show where across from the convention center, at the Las Vegas Hilton, hundreds of managers from 15 home building companies—working from elaborate display booths stocked with giveaways and decorated with balloons—were sifting through more than 600 students, hoping to find future leaders for their respective companies.
The massive networking event was part of this year's annual Building Careers Job Fair (BCJF). Demand for space at the job fair was so great this year that the Home Builders Institute (HBI), which hosts the event, is negotiating for more space at the 2005 show—hoping to accommodate up to 30 companies.
“We're getting more participation from companies all the time,” says Page Browning, HBI's director of academic services. “In the past we had to call and solicit [builders]; now they are calling us and asking to be involved.” Indeed, builders are rolling out the red-carpet treatment for job candidates; the same treatment typically reserved for potential buyers.
The Daunting Demand Clearly, big builders have only to look at their five-year projections to see the magnitude of the recruiting job ahead of them. In the race to grab market share, many of the top 25 builders have committed to growth plans that would have them double in size in the next five years, if not sooner. Though mergers and acquisitions will significantly factor in builders' growth plans, senior planning executives recognize the most successful builders will be those that do the best job recruiting top talent. Their task is formidable.
At Centex, for example, approximately 25 percent of new employees are hired into sales and sales management positions. Another third fill roles in construction and construction management, which includes ancillary services like fieldwork, estimating, and purchasing. The remaining 42 percent are divided among land, finance, Internet Technology, and marketing roles. Nellis estimates that his company will be hiring more than 15,000 people in the next five years, and, assuming that the top five builders will have similar needs, these companies alone could be responsible for more than 100,000 new industry hires by the end of the decade.
The most likely candidates to fill these positions: new or soon-to-be graduates from construction management or business and construction programs. According to Clint Ooten, director of human resources for Hollywood, Fla.-based Technical Olympic USA, the caliber of students participating at job fairs is increasingly more sophisticated in both the construction and business side of the home building business. “As the building industry has become a larger part of our economy, universities are offering more and better classes on the industry. Students are also becoming more advanced in marketing themselves, as many of them may have three to four internships under their belt before graduation—and possibly multiple degrees.”
Nellis views these students as the next generation of managers for the industry. “Twenty-five [percent] to 50 percent of the graduates in construction management programs are going to go to high production builders in the next five years,” says Nellis. “Between [Centex], Pulte, Ryland, Hovnanian, Lennar, D.R. Horton, and KB, we're all recruiting,” he says.
In 2003, Pulte Homes hired more than 600 students. “This year, we will exceed that number and hire about 1,000 students,” says Renee Belanger, a human resource project specialist at Pulte. Centex took 50 managers to the BCJF to conduct interviews and is currently negotiating with 25 candidates from that event alone.
When it comes to college recruiting, builders are working hard to ensure that their efforts pay off. Representatives from several large builders sit on an advisory board that serves the Student Chapter Program of the HBI. According to Browning, as companies realize the emphasis that needs to be placed on finding key personnel, they have become much more active in the organization, getting more involved in planning and events. “These companies aren't just showing up at the job fairs. They're working to make sure the events have value for everyone,” she says.
At Pulte and other large builders, the college-level recruiting programs also involve presentations on campuses, career day initiatives, participation in local or university level job fairs, and information night events. Pulte also invites professors to spend some time at the company. “We bring them in and give them a chance to experience our culture,” says Belanger. “It's very powerful.”
Expanding Horizons In spite of their progressive efforts, it's clear that all the top builders can't fulfill their hiring needs by fishing from the same pond of construction management students. Instead, builders find themselves casting a wide net to snag good managers from other disciplines and industries. “In order to meet the demand, we're open to bringing in people with unrelated skills,” says Joanne Freeman, vice president of human resources for Centex. “The ideal person is someone that can manage well.”
Ooten says successful employees are those that act as business managers first, then develop an understanding of their discipline. “We want people who know how to manage their associates and direct reports,” says Ooten. “They are proactive thinkers who know the numbers and are always open to new ideas and best practices.” While most companies focus on developing their recruiting systems internally, they continue to review good candidates that are presented by professional recruiters, especially when they are filling upper management or executive-level positions.
Centex has had some success with an outgoing military placement program—last year hiring about 50 employees through this avenue. While most candidates have a degree from a two- or four-year school, it's rarely in construction management. But they bring soft skills to the table. “They have the management, discipline, and work ethics that we're looking for,” says Nellis. “They just don't know what a two-by-four is.”
Internet recruiting is also bringing in some talent with a fresh perspective to the industry. About 10 percent of TOUSA's 2003 hires were culled from job postings on the Internet. Utilizing Web sites such as Monster.com, builders find they can reach a diverse batch of quality managers to fill Internet Technology, finance, sales, or land positions.
In 2003, the HBI even launched an online job board specific to the industry at buildingcareers.hbi.org. Another service available to builders is bigbuilder jobs.com. According to Nellis, who last year brought in 150 hires via the Internet, “I don't care what their degree is in. If they are a qualified manager, I can test their passion for the home building industry.”
Regardless of academic degrees, experience, and management skills, integrating a new breed of worker into today's high-production environment has its challenges. Often new hires can't adjust to the high-production demands. Developing time-management skills and managing inspections, regulations, the trades, and customers can be daunting.
“When people are working for a smaller builder, they do five or 10 units a year,” says Nellis. “Then they come to a high-production home builder and then need to do five to 10 units a month—sometimes they can't handle it. It shows in their performance.”
Savvy home builders are addressing these issues by placing increased emphasis on employee retention, training, and mentoring than they ever have before. However, for many builders, turnover rates remain high and anticipating all the resources needed in a decentralized environment is proving to be difficult. Some human resource directors admit that they aren't as empowered as they need to be in order to tackle today's diverse hiring needs.
The task ahead won't be easy. “We have to start developing these people ourselves,” says Nellis. “When I say ‘we' I'm talking about the industry. Each company has to develop good training programs and develop people internally. If we can focus on retention and reduce turnover, then that 15,000 number [of new hires] maybe gets cut in half.”
New Job Openings As the home building industry continues to evolve and companies grow more complex, builders are finding a need for a whole new generation of jobs—and a new breed of workers to fill them. Among some of the non-traditional jobs and job titles builders may be recruiting in the industry over the next five years are:
Position: Six Sigma “Champions”
Responsibilities: Working in a regional position, this candidate will train employees in Six Sigma principals, act as a champion of internal projects, and track the results. Overall objectives include decreasing costs while increasing quality and customer satisfaction.
The Ideal Candidate Will Have: Six Sigma Black Belt status.
Why The Job Is Important: As Six Sigma quality control and training become more widely recognized within the industry, the value of these principles will play a more powerful role in managing operations. “We need to be able to get the most and the best from the people we have,” says Joanne Freeman, vice president of human resources for Centex. “Managers need to have an understanding of the big picture, realizing that any change has a ripple effect.”
Position: Compliance Director
Responsibilities: Overseeing and managing the effects of compliance issues as they evolve.
The Ideal Candidate Will Have: The demonstrated ability to work with internal and external auditing teams to develop appropriate guidelines and programs.
Why The Job Is Important: The Sarbanes-Oxley Act of 2002 requires management to affirm in writing their responsibility for establishing and maintaining adequate controls and procedures for financial reporting. Many rules and definitions, however, are subject to interpretation; and meeting the requirements has become a huge task. “I can see that there will be a need to develop a position like this when we feel like we understand all the ramifications and details,” says Clint Ooten, Technical Olympic USA's director of human resources and administration. “At that point, it becomes an in-house issue.”
Position: National Supply Chain Manager
Responsibilities: This national position will be able to leverage national contracts and increase margins as well as manage a team of division-level purchasing people.
The Ideal Candidate Will Have: Experience that demonstrates success.
Why The Job Is Important: Developing a “global” perspective on costs and logistics is critical as the importance of leveraging national contracts grows.
Position: Vice President Of Land Acquisition Or Vice President Of Due Diligence
Responsibilities: Acts as chief liaison between corporate executives and land banks. As regional personnel secure land deals, this “relationship” position is responsible for supervising and completing due diligence and presents deals to an executive committee.
The Ideal Candidate Will Have: Strong relationships with land banks and their executives.
Why The Job Is Important: As the importance of land banking grows, a heavy influence will be placed on creating deals. In order to maintain a healthy balance sheet and grow at the volume the industry predicts, this position will become imperative.
Position: Corporate Joint Venture Controller Or Joint Venture Finance Specialist
Responsibilities: This specialist will be responsible for managing the nuts and bolts of developing and maintaining joint-venture deals. As the gatekeeper of the process, this person will examine the pro-forma financials, determine the scope of the arrangements, and ensure that everyone meets commitments on both sides throughout the term of the venture.
The Ideal Candidate Will Have: Experience with joint ventures.
Why The Job Is Important: Although joint ventures are not new to the industry, many believe there will be even more emphasis on these arrangements in the future.
CORPORATE CALLING According to a recent poll by Workforce Week Management, (www.workforce.com) these are among corporate America's future hot management positions: