Labor Shortage? Not if You're a Builder of Choice™

By Charles C. Shinn Jr., PhD
Founder, Shinn Builder Partnerships

Many industry publications are talking about a construction labor shortage. Even though we concur, the proposed solutions are global and require efforts and initiatives outside the operations of the home building company. However, each builder can successfully control and implement certain solutions in their companies to overcome the shortage of labor in the market.  

We have been coaching builders for years that they represent a fraction of the total number of houses being built in whatever market they are in. So clearly, there are more than enough trades to build however many houses each one is building. 

The challenge is how to get your local trades to want to work for you as opposed to another builder. The answer is simple and complex at the same time: Become a Builder of Choice™. 

You achieve Builder of Choice™ status when suppliers and trades want to work with you over all the other builders in your market. They will send the best crews and give you the best price. This can be worth 5 to 10 percent in lower costs compared to your competition. 

To achieve the Builder of Choice™ status from trades and suppliers requires hard work and a commitment starting at the top. We have identified six traits that must be present to achieve the Builder of Choice™ status.

1. A well-managed organization with strong consistent policies, procedures, and rules. 
Start with clear trade and vendor contracts spelling out the obligations of the parties in plain language, including scopes of work, clear expectations, and work rules. Make sure job sites are ALWAYS ready, organized, and clean. Provide detailed, accurate lot-specific plans, which will lead to accurate purchase orders. A complete start package and a reliable schedule are also critical to maintaining a well-managed field operation. Finally, always honor the terms of your contract, including paying on time as agreed. 

2. A team-building approach that incorporates the trades and suppliers as members of the team.
Once under contract, trades and suppliers are NO longer independent. They are responsible for building quality homes for your customers; treat them as team members and stress the interdependence of the trades. There should be a WIN, WIN, WIN, WIN relationship for the builder, trade and supplier partners, tradesmen, and staff. Team building helps everyone function as a unit, increasing morale and building trust and mutual respect for each member of the team. Ask the trades for the same crews to achieve consistency, reduce training requirements, and facilitate team work.

3. A motivational environment that provides a positive work environment.
You must put yourself in the trades’ and suppliers’ shoes; create a culture of no-blame, encourage initiative, and set high performance standards. You must allow trades to discuss what demotivates them and then make adjustments to correct the working environment.

4. Leadership to guide the team to successful results.
The leader of an organization needs to be professional, honest, and always show a positive mental attitude. Leaders need to be approachable, have fair and consistent expectations, be active listeners, and deal with incompetence firmly. Leaders must have high levels of integrity.

5. Communicate, communicate, communicate.
You can’t do it too much. Make sure verbal instructions are clearly understood by having the listeners repeat the instruction in their own words. Hold construction meetings; however, they need to be short, to the point, and issue-oriented. Utilize technology, such as web portals and texting to facilitate communication.

6. An organized construction process to insure a consistent construction flow.
Organization will facilitate implementation of even flow and help coordinate the flow of material and labor. Have an adequate supply of trades and suppliers; trades and suppliers will want to work for you.

The benefits of becoming a Builder of Choice™ are many; better performance by trades and suppliers, less management effort, higher morale, higher quality, on-time deliveries, lower costs, higher profits, and most importantly NO SHORTAGE OF TRADES AND SUPPLIERS!

Next month, we will talk about the role superintendents or field managers play in becoming the Builder of Choice™.