The Seven Strategies


In many hot markets, a lack of qualified workers has led to a labor shortage that is driving up construction costs, notes human resources expert Martin Freedland. Hiring, training, and retaining talented employees and subs should be job No. 1 for builders trying to manage costs. Well-trained, loyal team members save money by their longevity and by providing their own ideas about cost efficiencies. Manufacturers are a good source for low-cost or even free training sessions. KB Home works with its suppliers to offer training for subs on how to install new green products and technologies, says Tom DiPrima, KB Home’s executive vice president for Southern California. During construction of its recently completed Double ZeroHouse, KB offered its HVAC partner on-site instruction for installing the home’s PowerPipe heat exchanger that recovers energy from waste hot water.

“The supplier actually installed it with them, then took it back out and said ‘Now you install it,’” DiPrima recalls. After the training, the HVAC company changed its projected installation time for PowerPipe from 20 to two man hours, reducing the cost from close to $1,000 to just $100 or $200, he says.

Building strong relationships with subs can go a long way in keeping costs down too, says purchasing expert Tony Callahan. For example, Garbett Homes’ subs like the fact that the company runs a tight ship on scheduling. It was one of the first builders in the region to employ the non-market-driven evenflow system for construction management, which has helped it obtain better pricing and faster construction times. “A trade is a lot more likely to work through the weekend for a builder that gives him volume,” Callahan says.

In terms of in-house staff, many firms that lost executive-level talent during the recession are looking to hire again. But attracting star employees takes more than just competitive compensation.

“I do hear time and time again, ‘It is not just about the money,’” says human resources consultant Veronica Ramirez. “Employees say they want to work for a builder with clear leadership, a strategic direction, financial stability, growth potential, and a culture that they are proud to represent.”