Lord Adonis has been making headlines recently after telling Construction News he was “not worried in the slightest” about shrinking margins among major contractors.
Adonis, chairman of the National Infrastructure Commission – and a former transport secretary – was speaking after research showed the top 10 UK contractors had made a combined loss of £50m in their most recent results.
Problem contracts have been a big part of that shocking figure and the UK’s biggest contractors will be looking for big projects to get their teeth into to start to reverse their fortunes. Whether Adonis is worried or not, finance directors and chief executives of contractors will want to see their companies back in the black quickly.
However, this may take a little time and some delicate people management. We see this first hand in the hiring patterns of project clients, contractors and consultants. Project clients and consultants are often very busy hiring in the development stage of major projects, when contractors are often quieter. However once construction has been tendered there is a hiring boom at the successful contractors.
In line with this in 2016 contractors were buoyant, and busy hiring, while consultants were quieter. Since Christmas, the tables have turned, with consultancies leading the charge in the hunt for new blood.
The reasons are clear. With major projects such as Crossrail, the Mersey Gateway and the Queensferry Crossing coming to an end and Network Rail at the end of CP5, there are currently more mega schemes in the pipeline than on the ground.
Schemes such as High Speed 2, Hinkley Point C and Heathrow’s third runway are keeping consultants busy and leading to a surge of key roles created to oversee further planning and development.
This is good news in the longer term for contractors as they will naturally benefit when such projects get to build stage in due course. Indeed the Infrastructure and Project Authority’s National Infrastructure and Construction Pipeline, published at the end of last year, set out more than £300bn of investment by spring 2021.
However, about a third of these schemes were in pre-construction stage and, as ever, the evolution of projects will take time. So there is a big challenge facing a gap between one major scheme closing and another beginning.
This is particularly true at the senior level. No-one wants to lose key leaders in the run up to a much needed big scheme.
So there is a critical but delicate people management job for contractor chiefs to undertake. But what is the best way to make sure you keep your key talent during gaps between major projects?
1. Think ahead
The best way to retain top talent during a gap in projects is to hire them carefully in the first place. This means ensuring they are not only challenged and satisfied by the job in hand but possess the ability and flexibility to work across multiple sectors, functions and geographies.
If you have a Project Director who can switch from water to roads, or step out of delivery into a Bid Director role, for example, then you have much more chance of keeping them happy long-term. As long as your company is diverse enough and doesn’t keep talent in silos, it’s possible to keep good people happy when there is a lull in one sector.
2. Special Projects
Giving people a special one-off corporate project such as improving the efficiency of key internal processes or developing a new business strategy can be an option. The corporate project needs to be meaningful and have a defined outcome though to satisfy good people.
Occasionally some members of staff can be seconded into clients or other organisations, boosting their profile and personal development and sometimes strengthening the links between the company and its own network.
Make sure you know your senior leaders well, and speak to them regularly to understand what motivates them and what they are looking for from their career.
Then ensure that you not only keep them satisfied in the short-term but communicate your longer-term plans for them so they are incentivised to wait for the forthcoming role. Make sure they know they are valued and what you see them doing for the company when the market changes.
4. Keep your eyes and ears open
Of course if there is a delay to a major project, the staff lined up to deliver it may consider their options.
This can be a risk but also an opportunity. If you know your market well, you can get in touch with key figures at competitors to see whether you can tempt them away when there are lulls.
Executive search firms such as Newsom Consulting specialise in an in-depth knowledge of the market and the companies and individuals within it. We often know of people whose roles are coming to an end and the type of work that may interest them.
To discuss how we can help you map out your market and make additions to your executive teams click HERE