HR – “A potential value machine”
- Written by CP Staff
HR, Human Resources or Human Relations, has evolved over the past few decades into a very dynamic and even more integral part of businesses today. In the ready mixed concrete industry, the work of HR can be carried out everywhere from the owner of a local business to departments with full time staffs of professionals at the regional and national levels. Responsibilities in this area vary by company and can cover employee relations, insurance, retirement plans, safety and environmental management, and other areas.
What is critical, be it part-time activity or the work of an entire HR team, is that value can be found in this area and it can also represent future value for your business. With the brief nature of this article, we will only be able to touch on value relative to employee relations and resourcing, highlighting some of the challenges and opportunities for HR, but rest assured there are additional opportunities in the other aforementioned areas as well.
Rarely is the statement “The most important asset in your business is your people” a misnomer. Frankly, the best of assets are worthless without quality people. There are situations where superior assets have people who are unable to optimize their performance, but even in this situation, it’s about the people. The market today, relative to HR, is interesting, as most companies have “cut to the bone” in all areas with regard to employees, and are still being challenged to identify additional cost controls. Talented individuals who had exited from these organizations have either retired, gained employment in other non-construction related fields, started new concrete companies, moved on to the competition or have been hired in peripheral sectors of our business.
For example, one of my past ready mixed colleagues has moved to the contractor side of our business and is finding tremendous value on each concrete bid for his new company. With his intimate knowledge of how to design and maximize performance of concrete, he is able to squeeze every nickel out of suppliers, as well as quickly move this contractor into self-performing concrete production (setting up plants on job sites). The challenge as you can only imagine is that as the ready mix industry we lost a good one. When asked if he would ever consider coming back to ready mix, the current answer was a quick no.
Another example is the number of drivers who have found what they consider better jobs in the local and long-haul trucking industry, which will ultimately cause a RM driver shortage in a number of areas moving forward. These examples may seem bleak, but they reinforce the challenges we face and why the HR function—currently and in the future—is so vital to the value potential of your business. This is more than just finding bodies to fill roles within your business, it’s about finding and continuously developing talent in each area of the operation to maximize employee value.
Ultimately, we are faced with an even smaller talent pool that given the future market, is relatively empty. Then, in combination, take into account the current poaching of talent from companies (already trimmed to the bone) that had invested in developing talented employees and all of a sudden the employee resource function of HR becomes very serious and very important. The potential value of your future business resides in your ability to attract, develop and maintain the best people. On the good-news front, as an industry, we did develop the Concrete Industry Management (CIM) program, turning out college graduates with foundational skills in our business, and now active in five universities around the country.
The challenge is that even at 100 percent placement of these young concrete professionals, the future gap (2015) is still potentially large. Not all these graduates are fulfilling roles in ready mixed concrete production or management. But if you do hire one of them, it’s important to also have development programs within your business so they gain an even more rounded experience and grow with the industry. This brings up another of the important value roles of HR and that is maintaining an atmosphere of staff growth/development through a number of employee-tracking methods. The key is continuous development of all employees constantly honing their skill sets. Value comes from thousands of good decisions your employees make and the elimination of mistakes and their costly waste of resources.
Whether you are an individual business owner/manager or have an HR group in your business, the role of hiring truly has a tremendous impact towards your future value development in all areas. For example, in sales, are you looking for an order taker or someone who has a thorough understanding of the product, customers' businesses and engineering design to be able to generate additional dollars on every yard sold? In operations, are you looking for someone to fix things or an individual who will drive ultimate efficiency and savings into every part of the business? The list goes on, but it is crucial to define what you’re looking for and to understand you may need to concede in some areas with a plan for development of missing skill sets in order to identify the right talent for a role.
The HR employment process has been difficult on the “downsizing” side, but may prove to be even more so on the rebuild. It’s very important to not just define what you’re looking for, but make sure the process is one you would want to experience if you were going through it. You may not need a specific individual today for a given role, but in the future, they could be just the right fit, so make sure your hiring process leaves a positive impression.
As an example, the same colleague mentioned above, who is now making big wins on the contractor side, went through a cold, mechanical process by one company. Its HR department completely rejected him due to his degree, without taking his many years of experience into account, making the process very uncomfortable. He now is the potential customer with tens of thousands of yards of business to negotiate. Remember, this is going to turn from a buyer’s market for companies with few jobs available to a seller’s market (retention) for talented employees, and this process and how you treat your employees sets the stage.
In recent conversations with a few (currently starving) “headhunters” in the market, they believe their future looks bright with the minimized talent pool and a rising need for skilled individuals in 2014-15.
This poses a whole new HR challenge regarding potential retention of employees. Sure, today the statement “They should just be happy to have a job” holds true, but what about tomorrow? How many of your current employees would jump at a chance for a different situation or more income? How close are you to their true needs? When would you find out someone was drafting them to another team, before or after they left? As we come out of this mire, you do not want to be a company of revolving doors investing in employees only to have them leave. The impact of this is expensive and the effect that it has on customer development can become a challenge for your business.
The market trough has been so long, many may have forgotten what the “normalized” business looks like and the importance of maintaining and continuously motivating employees. As an observation, these issues tend to weigh heavier on the larger companies than the more local operations, whose owners are physically in the business each day with close personal connections to the employees.
For HR, helping identify talented individuals, developing existing personnel, and creating an atmosphere of continuous development in concert with all the other areas of responsibility makes for a truly challenging position but very rewarding. The role of HR is truly a value-creation machine and extremely important.
Next month – “Lean Six Sigma: Is the concrete industry ready for it?”