On February 15, 2005 an online forum was held at BuildTalk.com with Frederick C. Hornberger, Jr. CPC, president of Hornberger Management Company, a board member and senior-executive search firm in construction. Frederick brings a wealth of experience and expertise to the BuildTalk Career and Recruitment Forums. He is recognized as one of the first pioneers to bring executive search to the construction industry, and has achieved many awards for his expertise in senior-executive recruitment.
He is also recognized as an authority and acclaimed speaker on the subject of “Construction Executive Retention,” having produced some of the most sought after research studies and retention surveys in the industry, including his Annual Construction Executive Retention Survey highlighting the “Top Ten Reason Construction Executives Leave Their Job.”
Excerpts from the interview are published below.
What will the construction job marketplace offer construction executives and employers during 2005?
Our “11th Annual Construction Executive Retention Survey” indicates that 2005 will be a good year for construction executive job opportunities. Over 1,000 construction executives and CEO�s were surveyed during the course of 12 months. 13% of CEO’s (employers) stated they were planning to increase their executive workforce in 2005, up from 11% in 2004. 27% of executives indicated they would be looking for new jobs in 2005, up from 24% in 2004.
With the presidential election over, the economy is predicted to continue its cycle of expansion. Overall our survey identified mostly positive responses from CEOs regarding business conditions for 2005, which basically means increased corporate investment and the addition of executive personnel.
Are there any changes taking place in 2005 regarding construction executive pay?
Our survey indicates that contractors on average increased their salary budgets 3.8% in 2004 with expected gains for 2005 to break the 4% margin. This would be the first time in 11 years of conducting this survey where salaries increased over 4%. Bonus levels for 2005 are also anticipated to rise marginally. We found many CEO�s were moving away from the traditional annual pay raise in favor of increasing the amount of money set aside for bonuses, which are continue to become more performance based.
What are the primary reason construction executives leave their jobs?
Usually we find that the number one reason construction executive�s leave their job has to do with the relationship they have with their immediate supervisor. However this year more construction executives changed jobs due to a “Better Job Opportunity.” We believe this is a short-term reflex by construction executives whose careers have been stymied due to the economic downturn following 9/11. Many executives stayed in their current jobs longer than they otherwise would have and are now more confident given the recent economic growth and political stability in the job market. The expectation this year clearly indicates that executives want to get themselves back on track with their careers and pay.
Why isn�t pay the primary reason construction executives leave their jobs?
Typically executives earn enough pay to cover their basic needs and desires. As long as executives believe their pay is competitive and fair, their job moves are usually focused around personal and career fulfillment. In general, most executives look to career challenges, better job opportunities, good working relationships with supervisors and peers, greater job autonomy, more job enjoyment and greater meaning over pay.
Based on your retention studies, how can contractors defend against competitors who try to recruit away their best talent?
The best defense and retention strategy for an employer is to treat their employees better than they treat their customers. Although market conditions and external factors remain similar for most contractors, executive turnover rates vary dramatically which are usually based on internal factors within contractors. Our surveys consistently indicate the primary reasons executives choose to leave their job are due to internal factors within their firm pushing them out, rather than alluring job opportunities outside their firm pulling them out. The good news for employers is these internal factors (such as improved supervisor relationships, better pay, greater job challenge and autonomy, etc.) are usually well within their control, placing them in a strong position to improve their executive retention.
What types of positions are contractors looking to fill in 2005?
Our firm specializes in senior-executive searches, so I cannot speak competently on the professional level and mid-management searches that comprise the bulk of construction positions that will be filled in 2005. However, at the executive level we expect there to be an increase in presidential and CEO replacement searches due to the economic challenges of the recent past. The Sarbanes-Oxley Act of 2002 and the attention brought upon contractors regarding their financial matters continues to create demand for CFOs with strong tax, cash flow and reporting experience. We also expect an increase in CTO (Chief Technology Officers) and Executive HR positions as technology and talent recruitment/retention solutions offer contractors a competitive advantage.
What advice do you have for emerging leaders who are seeking career advancement into the construction executive ranks?
Emerging leaders should develop specific one year, five year and ten year career goals that have concrete plans to achieve those goals. They need to be strategic with their careers, and remain be on the road of transition seeking out opportunity until they arrive where they are headed. If they cannot receive the opportunity they seek internally with their current employer, they should consider outside job opportunities, which statistically prove to be better paying. It�s important to take risks that will accelerate one�s career, develop a good performance record and maintain an impeccable reputation for quality work and unquestioned integrity. Success breeds greater success, and opportunity will usually find you. However it also doesn�t hurt to know a good recruiter.
What advice can you offer contractors who are looking to hire a new CEO?
Hiring a new CEO is a gamble. Even a talented candidate may not fit into the corporate culture or perform as an employer might expect. Make sure you hire the best recruitment firm and the very best talent you can afford. The cost of a poor hire can be catastrophic to a firm. We have never had a contractor complain about how much they paid an executive or a recruiter when the executive proves successful.
What geographic areas offer the best job opportunities in 2005?
If you want to track construction job opportunities simply track which cities are growing the fastest. In general, construction executive demographics tell us “baby boomers” are retiring at unprecedented rates and looking to the warmer climates, that offer affordable housing, low crime rates, and improved amenities such as health care facilities, golf courses, restaurants, entertainment, etc. Las Vegas, San Antonio and Orlando are good examples.
What executive employment trends do you see for 2005?
We are entering a new genre in construction as executive demographics continue to change. Our surveys indicate that more woman and minorities are entering the construction marketplace at the executive level than ever before, and we see this trend becoming more pervasive in the future. Technology, telecommuting and flextime will continue to be major factors in construction recruitment and employment. Programs emphasizing executive retention, training and background checking will continue to increase. HR will continue to move more into strategic roles with contractors while more administrative HR functions will be replaced with more affordable software and outsourcing solutions. As an example, we found 23% of construction firms� outsourced HR activities in 2004 that weren�t deemed a “core competency.”
About Frederick C. Hornberger, Jr. CPC
Frederick C. Hornberger, Jr. has been an executive recruiter in construction for over two decades, and has achieved countless awards and successes for his expertise in construction executive search. His biography can be found at https://hornbergerusa.com/.
Established in 1996, BuildTalk.com, has been recognized as the premier networking center for construction executives and employers who wish to collaborate on the subjects of employment and recruitment through online forums, chat, instant messenger or video conferencing. It is owned and operated by Construction Executive, LLC. the nations leading career management and outplacement firm for USA executives in construction.