Q & A Episode 4 - Hiring the right people for your construction business
Episode #4 | Q&A with Mark D. Williams | Hiring the right people for your construction business
Mark D. Williams shares his experiences and lessons learned about hiring and retaining employees, as well as scaling his construction business. He emphasizes the importance of finding the right talent, providing training, and navigating financial challenges during business slowdowns.
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About The Curious Builder
The host of the Curious Builder Posdast is Mark D. Williams, the founder of Mark D. WIlliams Custom Homes Inc. They are an award-winning Twin Cities-based home builder, creating quality custom homes and remodels — one-of-a-kind dream homes of all styles and scopes. Whether you’re looking to reimagine your current space or start fresh with a new construction, we build homes that reflect how you live your everyday life.
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hello curious listeners I want to share more about CB USA's group purchasing organization as a member there are so many benefits that go beyond earning rebates and lowering material costs one of the biggest perks is having the chance to network and share ideas with other like-minded builders who are on the same Journey as you CB USA's Minneapolis chapter is about to get going and I'm excited to work with some of the best builders in the Twin Cities my friends Katie and Jesse from jcat design build as well as Jamie and Morgan
00:00:26 Moler from construction to style are on board to join and it's going to be great great there's so much more we can do together as a group than we could ever do on our own and I'm looking forward to the opportunities it's going to bring to learn more about the benefits of cbusa and apply for membership go to CB usa. uslearn that's CB usa. uslearn additionally if you want to hear me interview Ryan lip from cbusa that's episode 26 on the Curious Builder podcast probably about five years ago as I hired a few key people I I took a step
00:00:58 back and the people I put in place did not do the job they needed to do they either didn't have the knowledge they didn't have the skill or they just missed things and it cost my company hundreds of thousands of dollars over a couple of years because I had the wrong people in the wrong seats on the [Music] bus welcome to the Curious Builder podcast I'm Mark Williams your host today's Q&A session has two questions that have been submitted by the listeners the first question is when you first started to hire employees were
00:01:30 were they hired for support staff or was their position and income driving higher also how do you retain them between projects when things slow down so this a two-part question and a great question so I first of all should disclaim that I think I'm a very bad individual at scaling a company and hiring people I've been very fortunate to I feel like just get lucky I just have some good instincts on people early on and I just had the right people around me and I didn't put a lot of time or training into my early hires in the
00:02:05 very beginning it was sort of sink and swim I mean first off when I guess when I first started my company I had you know an office manager she was a former Title Company owner and had run the books for several Building Company so it's kind of a no-brainer she knew more way more than I would ever know in fact I her name was Margaret I jokingly told her I think into year one just knowing how capable she was I said if um if you're ever going to retire I need a five-year notice and without missing a
00:02:31 beat she said consider yourself notified um so I think the first thing is finding good people uh for me personally I wanted to sell I wanted to build I wanted to meet with clients I did not want to be running the books I did not want to be writing all the checks I did not want to be you know compiling all the insurance certificates all the things you need to do as a business but that was certainly my first hire in fact I don't know how you run a company without it so I never really did it alone so I think before I even started a
00:03:00 company company I had an employee um because I had to that was how I wanted to do it so how I paid for it frankly I don't even hardly recall I must have borrowed money from the bank to pay their salary and just kind of figure it out you know while while I was going on my first home was a spec home but you know as we as we went along obviously you you're you're building it into your sworn construction statement I mean there's so many things that I did not know early on like the cost of an employee you know I just charged a a
00:03:28 client or let's say I was doing a model home you know I would price um my profit um did not even include my overhead I was not smart enough to even know that I mean if there was podcast back then or Educational Tools or people to tell me that that would have been super helpful um I was definitely losing money hand over fist in those early years um luckily I was charging enough you know and I was you know pretty much just me and and one office manager so my overhead was very low I didn't have a office or anything like that so I think
00:03:56 in those early years you're really Scrappy doing everything you can but after you get past that first hire and you start building you know then really it's about I you know I always thought I could you know basically out sell my way out of overhead so if my overhead got too high I would figure out a way to go sell something another home a remodel you know something to that nature and so that's really how I looked at hiring people is could I afford to because the last thing I wanted to do was hire
00:04:24 somebody only to fire them so you know you mature in your career you kind of make it through those early years and you're not really too smart on what's happening or at least I wasn't and um so I could maybe answer the question maybe at uh let's say 15 years in so 15 years in my company looked a lot different I had four employees project manager uh I think when uh when you go from an office manager and yourself early on I did all my own project managing um you know of course you're just two of us so you know
00:04:53 if Margaret is handling all the book workk then I'm handling everything else so project management you learn a lot that way you meet all the subs you learn all the tra trades you know you're learning kind of everything and then as time goes on it's it's not very scalable it's just you out there and you can't be everywhere plus doing all the things you need to do to get more business so I think I was definitely late in hiring a project manager I think I was always really concerned that I couldn't I
00:05:18 didn't I always thought I could do it probably better and I know a lot of homeown or a lot of business owners do this where we fall into this trap that we think we're Irreplaceable um well shocker you're not everyone's irre able in fact I think the best business owners are ones that completely replace themselves like they're not even in the company they can manage it or check in but if the company can run itself without you like that's a business otherwise you just have a job and I you know someone else told me that quote
00:05:45 once and I and I think that's accurate I think I have a job because if I'm not if I'm not in my company it's not going to run and so I'm endeavoring to build my company now so that it can run without me you know can you take a week off can you take two weeks off can you take a month off could you take six months off you know what are your goals and how do you get there I think that's another way to sort of build your team and your staff so that it not only runs better but also you are not burned withholding
00:06:12 all the answers I think if you also make yourself a bottleneck you know you will be the bottleneck I think becoming aware of where the bottlenecks are in your company is super crucial and if you find out that you are the bottleneck you need to hire somebody and I think that is something that I definitely did not realized to later on my career I wish someone either around me would have said something or I just been self-aware enough to realize that I'm the bottleneck I'm the reason why this company can't grow and I I think that
00:06:41 not every company needs to grow I think you know as a culture at least in the United States we're we're obsessed with scale and with growth because we think with growth comes more money um you know honestly I made more money five years ago than I make now and I was a leaner operation and we had things pretty figured out and for me personally it's kind of this graveyard of once I crossed over four employees to like five and six it was rough I mean my overhead was too high and I've heard that from other
00:07:09 builders that when you try to you know Step Beyond that golf of let's say you know it could be Revenue could be employees but you know sometimes you need to you can't just go up by 30% you have to double the size of your company I've heard before where you know maybe uh from four to six employees was hard but like six to 10 was almost kills you but then once you hit 11 you're super profitable again now you're not adding these people just willy-nilly you're adding them because you've got sales to
00:07:34 back it up um and so I I think trying to figure out you know what your whip is you know your work in progress understanding what your overhead is and really being very clear on your financials uh monthly weekly you know having some kpis key performance indicators of understanding where your cash flow is you know early on on my career I'd say for the first 16 years you know I once a month I would sit down and look at my numbers I would have a very keen understanding of where I was financially and then I think probably
00:08:05 about five years ago as I hired a few key people I I took a step back I'm not saying you don't take a step back but make sure you're still in the no and I took a step back and the people I put in place did not do the job they needed to do they either didn't have the knowledge they didn't have the skill or they just missed things and it cost my company hundreds of thousands of dollars over a couple of years because I had the wrong people in the wrong seats on the bus and you know it took me a year or two to
00:08:31 sort of clear that out and figure it out and realize that my my trust was either um in the wrong place um or I just needed a different uh different Talent set and so I think sometimes hiring people can be really scary because of stories that I just shared I think I think for me personally hiring more people I'm too much of an optimist I think sometimes as business owners we think you know we can build we can Market we can do all these things that we should be able to hire too I mean news flash you can't do everything and I
00:09:02 need to tell myself that every day in the mirror that I can't do everything I need my team I love my team I depend on my team and you know sometimes my clients are part of my team you know because you want them to be your super fans and you want to give them a great client experience well if you are doing everything you're G to burn out and so it just doesn't work um I think for me personally I've sort of decided that um I'm going to have my team hire people for me in the future um about a year ago
00:09:28 we went through some changes and I was doing some Consulting with somebody and one of my key employees um was going to move on and I was lucky that I was working with this consultant and I was just so busy trying to finish some jobs I said I don't have time to even you know interview all these people or look for them I said can you just handle it inevitably that was one of the best decisions I've ever made they vetted everybody they they kind of ran them through the gauntlet before I ever met them I had my team interview him so that
00:09:55 when I finally met him it was like the best of the best and I was like well man if my team says yes if everyone I've had interview that says yes like unless there's a just a massive red flag like I'm going to say yes where in the past I would meet sit down with them I'd have a one- hour conversation with them and i' would pretty much be like yeah I like this person I'm sure they're great I'm sure they'll figure it out sure I'll hire them and basically end up being I hired whoever I just made the best first
00:10:19 impression that is not the best way to hire people and I understand people out there are probably laughing at me and you know that you don't think quite like me but I'm a very trusting person and I give people a lot of attit a lot of um you know aptitude to keep on going and and just to say like you know what I hope you I hope you can uh you can figure it out and I probably value communication and the figured out Factor more than anything else and if you have those two then I'm willing to be patient
00:10:45 and let you learn um I think to scale a company uh the way I look at my peers and how they've done it they do a much better job at training people I used to kind of just hire you know who I thought was A+ talent and I'd say you know it's sink or swim like just get in and figure it out and I didn't really have a training plan it was like I'm busy you know doing the things I need to do I'll certainly sit down with you and explain things but I tended to hire and pay for people that I just wanted to hire
00:11:10 starting pitchers I didn't want to have to bring up through the miners I didn't want to have to train them and you know sometimes that works sometimes it doesn't um I have not truthfully ever hired someone that's you know like 23 right out of school or 19 you know you know coming straight out of the trades or something like that and really develop them and I think that's probably going to be my next hire is a full-on development uh and see if they're a good fit and I think some of the hirers that
00:11:38 have worked out the best for me you know my current project manager is amazing um you know I've been I've known him for 30 years I met him when I was well actually longer than that 36 years I've known him and um he was a longtime framer of mine framed my homes for 15 years and then when he decided that he wasn't going to frame anymore I said well why don't you come and be a project manager so that's a little bit different scenario because he knew every single person that I already knew he worked with all the
00:12:04 trade Partners they all knew him so it was really easy I so maybe one way to hire someone if you're looking to hire somebody is is promote somebody within your um your network already you know if you're a builder you know look to your framing Crews look to your trimming Crews you know if you see someone that's just outstanding you know maybe they're a good communicator and I think this is where it's important as owners that we interact with everybody on the job site could be your drywall guy could be your
00:12:29 wood floor guy you know interact or you know reach out to maybe some of the owners you know I'm really good friends with um you know Anthony Jena from from Alpine hardwood you know maybe if I called one of my key people and said hey Anthony I'm looking to make a hire who would you recommend they also work with other builders and they might know who's looking is there anybody in your team that you know has a lot of potential to you know increase their skill set or wants to do something else maybe they're
00:12:54 really talented and this is just the point in their in their career where you know it's time to do something different different but they have a lot of talent I think that is how I will hire in the future is why am I trying to find a needle and a hay stack you know if you ask your peers if you ask you know those around you in your community you're likely going to find someone that's a great fit plus if these people know you really well they're also going to recommend people to you my last three or
00:13:20 four hires have all been recommendations they've been people that have recommended people that they knew that they thought I should hire and then you take it from there the second part of the question was excuse me the second part of the question was how do you retain people when when things slow down that one is tough I have not navigated that in a way that I just held on to people so I guess twice now in my career and it's actually been in the last two years we were probably late to hiring somebody so we were about a year late in
00:13:54 hiring a fifth person to our company and we were really stressed out for two years we had two huge projects that took our entire team we were probably 110% capacity and but we were very very profitable and so towards the end of that I could just see everyone was burning out I was burning out and like you know what we need to hire more people so I'd say made two mistakes one is I didn't recognize that I needed the employee as soon as I did and two I made a worse mistake is I hired somebody when we were slowing down and we didn't have
00:14:25 it to fill fill up on the back end so you know I hired somebody and it um it didn't work out they lasted for about six months and then our overhead was too hot and you know we lost a few jobs that we thought we were going to get and I just simply had to say I'm sorry we have to let you go we don't we don't have the financial I want to keep the core team together you know I'm sorry I brought you on uh the way we did some of the jobs that we had did not work out and you know we had to let that person go uh
00:14:53 the second one that we uh that we had to navigate for a Slowdown was actually even worse we had three three jobs cancel in a short period of time and our overhead skyrocketed and I had to make some pretty tough decisions on who to let go and it was really hard I care about these people a lot you know they've been with me for you know a number of years and so you just look at man what what do I do how do you go you look a little bit about salary sometimes you look at it you say you know sometimes you think you keep the person
00:15:22 that is maybe the most knowledgeable um or the most experienced but sometimes their salary is also the highest and you think well is an opportunity to give someone who's younger an opportunity to grow and so you know that's how I navigated that particular situation it wasn't easy you know letting people go especially key people is really difficult I do know that you know if you have some key people that you're like I absolutely do not want to let them go sometimes I've I've heard of companies they'll dip into their line of credit uh
00:15:51 and so they'll basically pay their salary with a line of credit you know maybe it's a couple months maybe it's six months maybe it's a year I think what you run into is how long do you go and I think it's important too to to let your employees know what's happening I mean your employees aren't silly they know what's going on they're not dumb and so they see that things are slowing down maybe approach them restructure their deal if it's someone who's really a key person to your industry uh or sorry to your operation and you say you
00:16:17 know what um you know I'm paying you this much a year and we've had a couple jobs fall off I don't want to lose you um could could you maybe work three days a week would you like more time off I mean I think that would be a very you know mutually beneficial thing they might you might they might surprise you they might say you know what I actually would like to take some time off or I would like to spend more time you know maybe it's four day weekends and you know what would what would that do for
00:16:41 you that would be amazing opportunity um also I think you know just asking the question then and then being quiet ask if they have ideas I think sometimes as owners we think we have to come up with all the solutions on how to keep our people but I think honestly ask them I think they're going to be a great resource this episode is brought to you by Alpine hardwood flooring they've been our partner now for over a decade installing all our wood floors on all our new homes as well as our remodels and on a personal level Adam and Anthony
00:17:09 Jen aaot of the owners are just absolutely amazing people they've been so supportive of my career as well as doing anything we need to make sure that our clients are happy and they work so well with our other vendors and trade Partners at not only protecting their product but also ensuring everyone else's looks great so if you're looking for a wood floor or for a refinish I highly recommend Alpine hardwood flooring okay the next question is how do you scale a company and when do you know it's time to scale again I'm not
00:17:38 sure I'm the best person to answer this question because I've chosen not to scale I found it you know bumping into that glass ceiling for me has been very difficult but in talking with other builders I think if I was to scale the way I personally would do it is I would try to load up on some pre-sales so I would probably not do the speck home thing in this version because I'm borrowing even more money to make it happen personally I would be more debt adverse so I would try to go sell a few pre-sales and if I could get four or
00:18:05 five jobs into preconstruction and I know I've got things happening I think this is where really understanding your work in progress your whip and also understanding where you're currently at and so let's say you have you know a handful of people that you've sold design jobs you've priced them out and you're ready to go and you're saying well I can start this house in about four months because I've got other projects in que that's a great time to go hire somebody you've got a three to four Monon window you've got the
00:18:33 pre-sale you've maybe even asked for down payment uh and now you can go out and hire let's say a project manager or a site manager or project coordinator to come into the office and you're going to probably work them with a more experienced uh project manager or someone else on your team to kind of train them in or you know maybe it allows you the time to train them in yourself uh sometimes you might have a remodel that you could have uh you know a new hire run while you're waiting for a new build but I guess I would probably
00:19:01 solve it by trying to go get some pre-sales make sure I'm filling up my funnel on the front end so I have um so I have all the you know essentially the deposits from the clients and the future bills that are signed contracts and then build the team out around it I've always personally felt that I want to get the sale and then build the team around what is needed versus build a team and then try to go find a sale I I don't think that I would be too risk averse to try try it that way I think once you have an
00:19:28 operation running like I know another Builder that talks about you know he's not concerned about you know 24 and 25 or even 26 you know he's selling three years into the future and so he's worried about 27 or 28 well I think if you are that sophistica of a builder and if you're thinking that long term you are in a great position to really look at your staff and say okay I've got two years where I can bring on a person and train them on to meet this future capacity or if you see sales starting to dwindle
00:20:03 and your funnel starts to dry up you can lay people off let them go and much earlier and not have it hit your bottom line that affects everyone or again you can make that decision as a business owner and say you know what um I'm gonna approach them and say do you want to work part-time do you you know is there would you be willing to take a pay cut or do you want to restructure your contract because we see a Slowdown in the future and so I think that's just having an honest discussion with your
00:20:30 team sometimes I would say it'd be a blessing in disguise sometimes you know Contracting a company can be a blessing you know sometimes you have people on your team that you're loyal to and you care about them deeply personal personally I know I have and it really it really in some ways um it disguises their abilities on what they can do you become so attached to them as people that you sort of lose perspective from a business approach and so as tough as it is and as hard as it is there is definitely a um you know a silver lining
00:21:02 sometimes in a Contracting Company sometimes being forced to let people go through um you know through tightening of budgets or a down economy allows you to sort of reshuffle the deck and you know kind of get some new Talent some new blood and sometimes it can re-energize your company and other times it can be really challenging I think navigating those downturns is as challenging as navigating it when everyone is too busy and so you know reminded of this old adage that you're either busy trying to get busy or you're
00:21:32 busy being busy but either way you're busy and so I think stress comes in a lot of different forms I don't think scaling is easy I don't think downsizing easy I mean just owning a business is really difficult and so I think you know being honest with your employees is probably the best advice I would have to this question invite them in invite your confidence your other business owners you know reach out to other builders and ask them you know you know what recommendations do you have but at the
00:21:58 end of the day you have to make the decision what works for you and you know and what works um you know for the employees that you're bringing on so hopefully that was helpful if you have any questions you can always uh reach out to us directly at the curb Builder podcast.com we have a place for questions we also now have a onetoone uh Consulting segment so if you want to uh just have a one-on-one uh period of time for one hour to ask anything you want we're happy to do that as well and we hope you to see you next
00:22:25 week we're happy to announce that on August 1st Mark Williams Custom Homes and the joy collaborative are holding a charitable event at one of our past Builds on Medicine Lake if you're interested in raising money to help out children with disabilities there's over 66,000 Kids in Need in Minnesota alone we'd love for you to attend details can be found on our website the curb Builder podcast.com or any of our social channels we hope to see you there additionally if you want to hear more about the joy collaborative please
00:22:53 listen to Episode 34 on the Cur Builder podcast we're excited to announce that we've opened up another curious Collective for the last year we've had the Curious Builder Collective we now have the Curious Builder Collective for designers the first ones will be happening in September all the details are going to be on our website we have 30 spots available half of them have already filled We additionally have eight spots left in the Builder Collective if you're interested in getting together in small groups of nine
00:23:19 with local Minneapolis based Builders and designers in separate groups and talking about your business talking about your Brands asking those questions that you wish you could ask another business owner then this is the place for you details can be found at the Curious Builder podcast.com the podcast has now been running for the last two years and it's because of people like you that are listening to the podcast spreading the word that our audience continues to grow as our audience continues to grow and we're up our
00:23:45 production costs things are getting quite expensive one of the ways that you as listeners can help uh support the show is head to our merch page our shop page on the Curious Builder podcast.com you'll see that we have three different offerings now we have a shirt that we partnered with Harish on we have a hat from BOGO that I use for ultra running it's also just incredibly sweat resistant so for any of you guys are outside in the sun working the hat looks great but it's also extremely resilient
00:24:09 to sweat and then of course our Hive notebooks these notebooks are amazing I was given one a couple years ago and I've fallen in love with it uh the paper's made out of stone it's waterproof it's tearproof it's amazing so if you like what you listen to if you appreciate the show and the content that we're producing please head to the shop page you know buy a notebook buy two give some to your employees give some to the guys in the field really appreciate [Music] it thanks for listening to the Cur
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