I interviewed three applicants for one of my clients last week. Two of them were employees that you would love to hire. Both were currently employed, and requested we not check with their employers, who were unaware they were considering leaving. I asked both when they could start, and both replied, “Most companies require two weeks notice.”
These three people were not jobsite employees. They were estimators seeking jobs as estimators! What was surprising to me was they were responding to a classified “help wanted” ad in the newspaper.
We have professional “headhunters” throughout the United States who are calling estimators and project managers at least two or three times every month. They offer fantastic salaries and job opportunities just to get that individual’s resume in their files. Some of these headhunters do not even have the opportunities available, but will use those potential resumes to recruit a customer that will pay their fees. Most of the offers are realistic. There is no longer any doubt about our critical labor shortages, or what companies are now offering to “buy” employees.
Anybody on “time-of-the-essence” critical path projects knows how difficult it is to find enough qualified craftsmen and foremen to maintain those schedules. With pending liquidated damages and delay claims, most of those contractors are desperately trying to man those projects. Unfortunately, some of them are subsequently overlooking their estimating, sales, purchasing, submittals, change orders, as-builts and OM manuals, as well as the office personnel necessary to get all of it accomplished.
This is why my client had an ad in the help wanted classifieds. His estimator and project manager both had negotiated better offers with another company before they came to him with, “How much notice do you want?”
The tragic part of that scenario is that he would have negotiated a better offer with either one of them. As you might have guessed, both of the “good” applicants I interviewed were already making more than what my client was paying his “good ones” who left.
Although these wages and salary packages are complicated, they all boil down to my basic formula of cost to replace. Every single employee in a profit-making company is worth whatever it would cost you to replace that individual in the area where you do business. Naturally you need to compare “apples to apples” to assure you are getting equal value for equal cost.
Define The Job: Before you begin comparing your estimator’s wage or salary package with cost to replace offers in your area, you need to back up one step and define exactly what functions and duties they perform. The word estimator has many different meanings:
- Webster’s dictionary defines estimator as one who estimates. In many larger construction companies there are individuals with that sole responsibility. Some even have a chief estimator with a staff of employees whose only responsibility is to estimate.
- At the other end of that spectrum is the one-man show or pickup truck contractor who does not have an office staff, bids every job, buys them out and actually performs the work on his jobsites. We call this “kitchen table” estimating, which is usually done after the kids all go to bed and the kitchen table is cleared.
- Some middle-of-the-road companies employ one full-time estimator who only does the bidding (usually with a quantity survey or take off assistant). Many of these estimators use computers and or digitizers. Some have actual on-the-job craft experience, some have construction-related college degrees and some are self-taught.
- The majority of our medium-sized contractors use varying combinations of estimating, purchasing and project management. Defining the role and responsibilities of your estimator is important with any system, but here it becomes crucial. You need to be certain your estimator is willing, able and allots enough time to perform these functions effectively.
Scope Of Work: Our last few issues covered using detailed “scope of work included” job descriptions that are negotiated with each of your management staff. You need them to document each activity they perform, along with the amount of time it requires for a one–month period. This simple time study will readily show you how much of your estimator’s time is spent doing menial tasks that could be delegated to a lower paid assistant.
You may need to reassign some of those tasks to other members of your staff. You cannot afford to have your estimator miss or overlook one little note or item in those bid documents that could cost you thousands of dollars. If you look back over any errors or omissions of your previous bids, I’m sure you will agree it would be much cheaper to delegate some of those menial tasks than having your estimator “too busy to bid.”
With all of this in mind, you need to evaluate exactly what tasks and services you depend on your estimator to perform. Since you are “buying” those services, you also need to establish how much they are worth. Above all else, you need to look hard at what it will cost to replace them in your area with today’s labor crunch.
I’m suggesting this as an option, but for some of you who are in the same boat as my client, it becomes desperation! Your estimator can accept another job, can start his own business, could get sick or even die.
Once you have determined a realistic cost to replace, you should sit one-on-one with your estimator and talk. Talk real and tell it like it is. Use the scope of work with realistic dollar values on each task. Discuss the time study and possibilities to remedy any problems.
Above all else, talk about wages, salary, benefits, time off and perks. My advice is to assume that he or she is already considering an offer from your competitor and you are proposing your counter offer. It is much easier to “buy” them before they even consider leaving than it would be to try to buy them back! — (if they even give you the chance!)
Fortunately, there is more to this negotiating game than just dollars. Naturally, you want to pay and get true market value for your dollar. But you also need to consider and offer any of the flex-time options that would fulfill your needs and their personal “make-a-good-life, not-just-a-living” needs or desires.
These flex-time options are much easier to adapt to office personnel than they are on our jobsites:
- Three-day weekends, with either Mondays or Fridays off.
- Varied work hours to coincide with personal needs, such as babysitting, little league, golf, fishing, appointments and family activities. Your estimators could work from 4 a.m. to 2 p.m., or 2 p.m. to midnight, etc.
- Work at home: You can install a company line, computer terminal and fax machine at their homes and save travel expense, child care, as well as costly interruptions.
- Unscheduled time off to compensate for those extra long evenings required to get out a bid on time.
I’m sure you can easily understand why a good estimator would consider changing jobs to get some of those flex-time work hours. Doesn’t it make sense to have a good estimator want to remain on your payroll for those very same benefits.
Estimating and bidding jobs is a very tedious and critical part of this construction industry. Establishing a valid price on how much labor and material it will require to build a job from incomplete plans and specs requires a lot of guts and know how. If you are fortunate enough to have that person on your payroll, you certainly don’t want to lose him.
I can guarantee you have competitors who are desperately searching for this talent and ability. They may or may not be talking to your estimator, but you should be!