Dee Davis (00:08)
Hi, and welcome to the Management Under Construction podcast. I'm your host, Dee Davis. Today, I would like to talk about people. People are absolutely the largest investment in our businesses and the most important by a long shot. 30 to 50 % of our revenue, depending on your business type, can be invested in payroll alone. Instead of focusing on what payroll and people are costing us, why don't we focus on what we're gaining?
Let's say for example, that you bought a used work truck to support your business. Well, it's a little bit used, maybe it's got some miles on it, it's a few dents, but it checks all the boxes and it's affordable so you buy it. Its job is delivering tools and materials to your job sites. After a couple of weeks, the delivery driver says, you know what? It's not really working quite as well as expected. It needs a tune up. One of the tires has a slow leak.
What is your first thought? Is it that I got a piece of junk that isn't worth what I paid for it? Maybe you start thinking you got ripped off, but then you go, well, I did know about the mileage and that it had some wear and tear.
But I was just hoping that it would come in and run like a superstar for years and years without needing anything. So what do you do? Do you ignore it? Do you sell it? Do you repair it? Do you ignore the less than ideal functioning employee, fire them or train them? Trucks and people aren't the same, but from a business perspective, there's some similarities. They're both expenses on your balance sheet.
but one has a very good chance of appreciating over time, while the other one will never do anything but depreciate. Yet without question, we choose to sink time and money into the asset that will completely depreciate over time, and we ignore the asset that could, with some training and guidance, appreciate substantially. We just kind of hope that the person will magically get better without us having to do anything.
Sometimes it works. I would say maybe even a lot of time it works to some extent, but even if it does work, how much better would that person be if they had the repairs and the upgrades that they need in the form of training? We have a tendency to view our employees as expenses, much like a depreciable piece of equipment, besides being human and therefore very unique and quite difficult to replace,
Your employees are the face of your company. They have the very first contact, the ongoing and day-to-day contact with your clients. They are your face, your brand, your quality, and your productivity. We've talked before about how replacing an employee can cost you two to three times their salary, quite a bit more than buying another truck. Where training and mentoring cost a very small fraction of their salary. When you look at your people,
From a purely balance sheet perspective, we know that labor is our biggest expense and our biggest project risk. So doesn't it make sense that this is where our greatest investment should be? I know the comparison is often made with the military. They train 90 % of the time and execute 10 % of the time.
Well, that's not sustainable for most businesses. We can't do those kinds of ratios. But what if we flipped it and we trained 10 % of the time? You know what? Forget 10%. Let's call it five. Five percent of the time we're going to dedicate to training. A standard American work year is 2080 hours. Five percent of that is 104 hours. Does the face of your company spending 104 hours of training per year
to become better at their job makes sense to you? I'm not talking about training for the sake of training. I'm talking about real useful skills that improve communication, productivity, and performance every single day. regular training for things that are executed on a regular basis are essential to your bottom line and ensures
the appreciation of those people assets. In season one, we had an episode called Into the Fire, where we talk about how we have a tendency to throw new hires or even people right out of school directly into a project with very little, if any guidance, direction or mentorship. Right out of school, they haven't even been taught the most basic things in our industry like...
What is an RFI and how to write one to get the answer that you need quickly? What to do when you get an RFI response that doesn't answer the question, or maybe it doesn't answer it clearly. What is a submittal? How to properly put one together? How to review one for accuracy when it's handed to you? How to put a submittal together to get it reviewed and approved the first time, every time? How to run a meeting? How to take meeting minutes?
All of these things are really basic and we just expect people right out of the gate, right out of school to just know how to do this stuff without anyone ever teaching them. So how do we think they're going to learn? when I ask people this, I usually get one of two answers. They're going to learn by watching others or they're going to get some awesome OJT from the senior people on staff. How's that working out for you?
Watching others doesn't really work because they were never taught either. So they're going to learn, but it might not be in a good way. Senior people providing OJT or on the job training and mentorship is a lovely idea, but I've seen it very few times in my nearly 30 years of doing this. It is not working for us folks because those people are very busy themselves.
Other things we need to be trained on that they never teach you in school and we don't ever get any training for management and supervisory skills, i.e. managing people, effective listening, leadership, communication, how to write a daily report. my goodness, the daily reports I have seen. How to draft a change order, estimating, material and equipment ordering. This is stuff I was never taught.
I just started doing it and doing it wrong. And it took me a very long time to figure out how to do it really, really well. And that's what happens with most of us. This stuff isn't just for the office or the trailer. The field needs it too. I wasn't taught any of these things in school and it took me years to get where I am
Can you imagine how much better I would be if I would have been properly trained on these in just a few hours instead of years of getting it wrong and figuring out how to get it right? What will you gain by changing your perspective on viewing people and their training as an asset instead of an expense? You're gonna get a clearer picture of where your risks and your rewards lie.
You're going to get a shortcut to success that is measured in weeks instead of years. You're going to get an excellent return on your investment. Did you know that there is a 25 to 300 % ROI on training? You're going to get productivity gains, higher profits, more confident and motivated employees that stay in your business longer. I can just hear some of you thinking, what if I train them and they leave?
I ask you this, what if you don't and they stay? For the training needs that you have in your construction or engineering business, contact me at Yellowstone Professional Education.
Thanks for joining us. Please like and share this episode with a friend and leave us a comment or a question. Have a great day.
