Many find the day-to-day experience of the construction industry to be uniquely challenging, rewarding, complex and, occasionally, infuriating. Witnessing interpersonal negotiations and conflict resolution efforts between trades while working to manage on-site issues helps to quickly develop an appreciation for teaching self-leadership and communication skills to every employee. Regardless of the technical innovations used to transform the built environment, the inherent nature of the work ensures there will always be components of the building process which require excellent use of collaboration, conflict management and critical thinking skills. Soft skills (or people skills) mastery is not only integral to project success and increased productivity, but also fundamental to building a leadership bench.
Equipping a workforce with soft skills to improve productivity is further supported by data recently released by researcher and global leadership authority, Dr. Joseph Folkman. Folkman found that manager ratings of individual contributors with top quartile hard and soft skills outperform employees with below-average soft skills or below-average hard skills by approximately 90% and 84%, respectively. Folkman also measured employee performance ratings at over 91% effective when both skills sets are present. The potential impact on labor costs and productivity from applying this research could be profound.
Addressing a Leadership Gap
When considering employee training initiatives or leadership development goals, this research, and its potential for long-term impact on our industry, is important. With the United States construction industry job growth projected to reach 8.55 million by 2026, 41% of the current construction workforce retiring by 2031 and a 5.9% unemployment rate impacting external competition for skilled talent, deferring to a “time in the seat” succession-planning model or the perfunctory professional communication training will simply not be sufficient to meet future construction leadership needs. Your business needs a succession plan that addresses the realities of unemployment rates in the industry.
According to a study from global leadership consulting firm DDI, 55% of chief executive officers consider the development of next-generation leadership to be their biggest challenge, and only 11% of human resources (HR) respondents report having a strong bench with which to fill leadership roles. Further, current industry constraints from material pricing and logistics, owner-transferred risk and skilled workforce scarcity only serve to compound the impact of a widening leadership gap. As organizations seek to refine labor costs in the office and in the field, proactively coupling both technical and soft skills training will serve to concurrently improve productivity, increase engagement and create leadership pipelines for the future.
Admittedly, putting this research into action can be more difficult for some organizations than others, especially so soon after COVID-19. Those with sufficient financial resources can easily access many reputable consulting organizations, both outside of and within the industry, which specialize in leadership development initiatives and soft-skills training. For organizations in this space, these provide an excellent option and can manage the full-cycle process of analysis, design, development, implementation and evaluation.
Conversely, smaller organizations may find it difficult to commit full resources to such an initiative, no matter the understood value. For those in the latter group, there is still a benefit to be had by starting with what you can do today.
Communication Is Key
Leadership competencies are often categorized into areas such as self-awareness, integrity, innovation and effective communication. An exceptionally beneficial place to begin is by improving employee communication skills. The return on developing this soft-skill throughout the company is great, as on-site conflicts and office-to-field (and vice versa) communication remains difficult, even when utilizing new technologies intended for the seamless transfer of information.
Improvement in this area alone has the potential to positively impact productivity and performance exponentially. How many overtime-heavy emergencies might have been mitigated through clearer communication? How much lost time or employee turnover could have been avoided from conflicts stemming from disrespectful comments? With turnover costs per employee estimated to exceed 50% of salary, the financial commitment for communication skills training is far less than the potential loss that a lack of training could create.
Consider a recent Project Management Institute report, which found that in construction projects with minimally effective communications, only 52% met original goals, just 37% of the projects were completed on time and fewer than 49% were completed within budget. Further, it’s been reported that ineffective communication results in annual productivity losses of $26,041 per employee while leaders with effective communication skills produce a 47% higher return to shareholders over a 5-year period. Regardless of the scenario, every organization in every industry, from top to bottom, will benefit from improved employee communication skills.
Leadership Is the Future
Without a one-size-fits-all solution, each organization must align their own HR and employee development activities with their unique capabilities and business goals to ensure their continued competitive advantage. Beyond the option of utilizing outside experts or specialized consulting firms, organizations desiring to develop initiatives in-house can find extensive leadership resources through partnerships with graduate research HR and business programs, the Association for Talent Development, and industry groups like the National Center for Construction Education and Research, Construction Management Association of America, Associated Builders and Contractors, and the Construction Industry Institute, based at the University of Texas.
In the safety realm, it is readily accepted that enhanced behavioral training impacts efficiency and productivity, lowers risk and improves outcomes in the field. Similarly, employee development initiatives designed to improve competencies and change behavior without addressing and cultivating soft skills is like trying to use a hoist without a cable — it just doesn’t work that way.
Current and future workforce needs cannot be fully addressed if there is no acknowledgement of what researchers have shown. The behavioral science behind leadership development applies whether the goal is to cultivate a craft professionals’ pipeline, supply a leadership bench, change safety culture or improve diversity, equity and inclusion efforts. By embedding soft skills and leadership development into industry access points and at all levels of an organization, the results will be measurable towards sustaining a high-performing industry workforce.
Ultimately, if the purpose of strategic human resource efforts is to significantly impact the bottom line through improved individual and organizational performance, a more comprehensive view of talent management is one solution our industry needs.
Aligning initiatives like leadership development to business strategy and utilizing a research-backed approach will yield maximum returns on the investment for employees, organizations and the industry.