What is the first thing you think of when you hear the word 'currency'?

Most of us are going to think dollars, assets, or and other monetary measures of wealth. 

However, it's vital for companies to understand that when it comes to compensating their employees, dollars & cents are not all that matters. 

Construction companies today are facing growing challenges to attract & retain top employees. We have more & more vacancies opening as more senior members of our industry are moving on to pass the torch to a younger generation that has different priorities for what they want from a company to feel valued. 

In order for construction companies to stay competitive & adapt to meet these changes, they have to find meaningful non-monetary currencies to compensate their employees

In Ep. 4 of our Hot Takes Podcast, I sat down to discuss my best tips & tricks to unlock the value of non-monetary compensation.  

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Podcast Transcript:

Jack:

All right, so, Kevin, thanks for sitting down with us here today. Um, and so, you know, one thing that I know you've written about in the past and is always common, you know, for our projects, a common thing that comes up is the area of incentive compensation, just compensation in general, and kind of the best practices that companies can kind of be utilizing to make sure that they're valuing their employees correctly. What is - in your past or recent projects - what's an area that you feel is maybe one of the biggest, maybe kind of misconceptions or something that, you know, companies are kind of getting wrong when it comes to employee compensation and retention?

Kevin:

Yeah, no, absolutely. That's a great question, and it's kind of a sticky subject because for many people, it comes down to dollars. It's like, oh, I'm paying, my person x amount of dollars per hour. And then we hear all the time, oh, our workers will jump to another company for another $0.50 an hour. Well, then you almost get into a price bidding war between, different contractors going, oh, I'll pay them a little bit more, I'll pay them a little bit more. And with the shortage of workers, it really puts a lot of power in the workers' hands to negotiate their salaries. But at some point, you have to stay competitive, and so you have to get creative with how you are going to compensate your people. And so really, one of the things that I encourage people to do is focus on the non-monetary side of compensation.

When, we talk about compensation, we talk about salary, and we talk about fringe and benefits, and, even fringe and benefits, they equate to dollars. And so, at the end of the day, we say, this employee cost me this amount of dollars per hour, per month, per year. And I try and get past that because, yes, we are going to write paychecks to our workers. And that's great because that's how we pay our bills, that's how we buy our groceries. But there's a whole other side of compensation that I think is very often overlooked and it's the non-monetary side of compensation. It is the things that people are getting in return for their work for a company. It's like I am putting in my time and I'm putting in my effort to this company, and what do I get back from it? I get a paycheck, but what else do I get back? And it's those, 'what else's?' that are they really need to be examined by companies.

Jack:

And so this is kind of an area where when it comes down to a lot of the time, you know, companies might be maxed out on what they can, you know, maybe offer for a salary. And maybe the company also feels like, you know, or the salary might be competitive. Maybe it's like you say, it's not what it comes or, not necessarily always about money for the employee. This is kind of an area that sounds like where maybe a company can really kind of set themselves apart when it comes to, not just finding that top talent and employees, but also being able to retain it and get the most out of them?

Kevin:

Absolutely, absolutely.

Jack:

And so, when it comes to that - another thing you mentioned, kind of a sidetrack, but you mentioned one thing, kind of the shortage as well, maybe of employees. Maybe just kind of wanted to dive into that a little bit as well. You know, is that a trend that you're seeing? Or maybe just tell me a little bit more about that. Is there, maybe a lack of - Is it ... is it a demand issue? There's not enough jobs, or is there not enough people trying to fill the jobs?

Kevin:

Yeah, there's not enough people. And it's very well documented that there is going to be a labor shortage in construction in the years to come. We're already seeing it, The emphasis on people doing things other than going into the trades, and that combined with an entire generation of, older workers, seasoned workers that are so valuable that are starting to retire. And so we're seeing this gap, and it's only going to get worse. And so we need to figure out how to, yeah, bring more people into the industry, but then individual companies need to figure out their own competitive advantage to - how to attract and retain the very best workers that they can. And the shortage is really in the field. It's the tradespeople, people who actually do the work. That's where the shortage is. It's less about project managers and estimators. It's more about, the people that actually do the work. And that's really where companies, need to focus.

Jack:

And so when kind of talking about companies maybe shifting their focus less on just the monetary and more so trying to look at maybe some more intangibles that companies, or, excuse me, their employees really value, what are maybe some good examples that you, maybe in your career that you look back on that really stood out to you, that was a way a company, just a little step that they took that really meant more to you, maybe, than just a bonus on your paycheck?

Kevin:

I think about it in terms of this. People talk about the work that they do. They go to a social event. They're hanging out with friends, they're around a barbecue, and you always talk about work, and people love to be able to brag on their companies. And so, think about it in terms of the stories that people tell around a barbecue. Hey, my company, dot, dot, dot. And so, very rarely will you hear, oh, my company gave me a

dollar raise. Great. So did mine. You know, where it really becomes, a point of differentiation is my company gave me this experience, whether it be, they gave, you know, all the employees a day off to go to a water park with their family. Or they decided that on a Friday, the whole company was going to, you know, do something charitable. Giving the opportunity to give back. It's amazing if you give employees the opportunity to give back how valuable that is to them. Because it's something that, in their heart, they want to do anyway, but maybe they don't have the time, they don't have the resources. If you make that part of their job and part of the value of working for your company, now, all of a sudden, it's like, boy, not only am I pulling a paycheck, but I have the ability to give back to my community.

I remember working with one company, and they took all of their field employees, and over the course of an afternoon, they built bicycles, and then they gave the bikes out to kids in need in their city. And it's like, no, they were a bunch of electricians. What were they doing building bicycles? But let me tell you, that was the story that they were all talking about. They were saying, yeah, my company, maybe they don't pay me quite as much as the guy down the road, but let me tell you what we did on that Friday a couple of weeks ago. We all went to the warehouse and we built bicycles and gave them away. You can't put a price tag on that. And so giving your employees something that doesn't necessarily have dollar signs attached to it, giving them experiences.

Taking care of their families. I remember one company that I worked with, anytime that one of their workers, one of their employees had a baby, they were given, an entire gift basket with baby clothes that had the company logo on it and diapers and whatever. But they also sent like, a care package to the mom. Well, you know, you can't really put a dollar value on that. But that mother, when things got tough, that wife, that spouse, when things got tough at work, she said, but you know what? You want to stick it through because this is a great company and they really take care of us. And to a husband, a company that takes care of his wife is very, very valuable to him.

And so it's that kind of mentality of saying, I'm just not going to pay people. I'm going to give them stories to tell, I'm going to give them experiences. I'm going to give them things that they stand around the barbecue and they say, this is why I work for this company. Not because I make x amount of dollars per hour, but because of what this company does and what it allows me to do as a human, not just as an employee.

Jack:

Absolutely. And so if you were in kind of the position or, I mean, I know of course you're working with companies actually trying to put this into action. What is maybe kind of the first step? If I was a business leader and I was trying to think about how to kind of take that first step into maybe trying to, you know, like empathize with my employees and figure out - because I'm sure it's probably very case by case in terms of what each, you know, maybe group of employees is going to value. Because of course, you know, there's different, you know, every workplace culture is its own thing as well. And so what is, what is that first step or the first step that you take with your clients to kind of try to start to, maybe dive in to figure out what are those, you know, unique value points for my business?

Kevin:

Yeah, no, it comes down to what I call currency. Everyone has a currency, and the currency is not the US Dollar. The currency is, what makes me both feel valued and feel valuable? And so when you put that currency factor on things and you say, how do I make sure that my employees know that I value them? And how do I ensure that my employees feel valuable? What's going to speak to them? And everybody is different.

When you look at two individuals, no two individuals on earth have the exact same currency. A great example is if you have multiple children, you have to handle your children differently because they have different currencies. I know with, with my daughter, you know, she's, she's motivated by one thing and my son's motivated by another. So, I can give them the same list of chores, but how they react to that and how well they do them, is largely dependent on the the reward at the end for them. And it's the same way with. With employees. You need to figure out, is taking care of their family something that's important to them? Is opportunities to give back or opportunities to do charitable things, is that their currency?

For some people, it is dollars. There are some people that, they have a lot of obligations in life, and, they need a big paycheck, and that is their currency. There are some, but most people, that's not, that's not the differentiating factor. For most people, it's the other things. It's the stories that they tell. And so, you can do it corporately, as a company. You can say, hey, we're going to do this for our employees. You can do it for smaller groups of people. We're going to set up this opportunity for our superintendents. We're going to set up this opportunity for our administration staff. But you can also do it on a personal level. And you need to be careful. You don't want to show favoritism, but there are ways, that you can really take care of, even individuals.

I tell this story, but I was bringing lunch out to one of my crews and I had one person on my crew that had some pretty strict dietary regulations, and they were due to his religious traditions. And so I brought lunch out for everybody, and I brought him a different lunch that was ... that met his dietary obligations. It wasn't that I brought them lunch. It was that I took the time to order him something different. That spoke volumes to him. Was I treating him any different or with any favoritism? No, I was - I was bringing everybody lunch. But saying, your traditions are important enough that I'm going to make sure that you're taken care of so you're not left out of lunch ... that guy had an incredible amount of loyalty to me as a project manager to the company, to the organization, because he said they value me. They value me for who I am as a person, not just as an employee. And so if you look for ways to do that kind of stuff, you'll find them. You need to get a little creative, and maybe it'll cost you a couple of pennies, but you need to actively look for those types of opportunities.

Jack:

Yeah. And I think that's really what it comes down to. I mean, outside of just, of course, the compensation part of it, the fulfillment aspect of it as well ... I mean, is kind of what we're talking about when we're talking about the experiences and the memories that you can kind of help them create. I mean, and I think, you know, if you're kind of in the position of a company that's really outside of just making sure that you're retaining your employees, really how you can kind of take it or push them to the next level, really to kind of get the most out of them as well, right?

Kevin:

Yeah, they'll work harder for you. They'll be more loyal. They know that you care about them as people. That they are valued and they are valuable. And everybody wants to be valued. Everybody wants to work in a place where they feel like they're valued. And that comes in ways way more than just a paycheck. But you have to be intentional about it. It's not something that just happens. It's not something that you can pawn off on somebody and say, oh, go increase employee engagement by giving them some perks. That's not what it is. If you don't genuinely care, then it's probably not worth doing. So as business owners, business leaders, you have to genuinely care and you have to express that care.

Jack:

Because, I mean, employees can tell, I think, the difference, of course, right?

Kevin:

I mean, yeah. They're doing this just to check a box. No, that's not what you want. You want it because, man, I love working for these guys. Like, they care about me, they care about my family, they care about our people, they care about the community. These guys care. And who doesn't want to work for a company that has that type of mentality?

Jack:

Yeah, I was just going to say, when you think about just the jokes on LinkedIn, you'll see today about the companies just throwing the pizza parties or whatever, just to kind of check the boxes or whatever the case is. I think what we've talked about here is really how a company can kind of take just not really big steps, I mean, small steps, but intentional steps to really show their employees that they care. And really, that will kind of add up in the aggregate to make a difference for not only the employee, but the work and the company at the end of the day as well.

Kevin:

Yeah. I remember one company I worked with. They did a school supply drive, and so all of the employees could bring their kids in and pack a backpack with all of the school supplies, and they got, all the lists from all the local school districts. And so it's like, hey, what school do you go to? Here's the list of all the things. Now go pick them all out on the tables. Yeah, it costs some money, but, A - the parents didn't have to go shopping for those things, so it was a dollars and cents thing. But, B - the story of, hey, my company set up a store for my kid to go and, quote unquote, shop for all of his school supplies, and he walked out with this backpack that was overflowing with all the things that he needed. And they didn't have to do that, but they care about my kids. That's something that's so practical and so tangible and something that's going to be talked about. And then you have a good employee, and he's got a friend that's looking for a job, and he goes, you should come work for us. This is what our company does. And they don't talk about the pay scale. They talk about the experiences. They talk about the stories. You should come work for us. And so you not only retain good people, but, you tend to attract the type of people that you want, the people who value things that are beyond just dollars and cents.

Jack:

Absolutely. That was kind of the end of my questions. I didn't know if you had any other closing thoughts for us on this topic?

Kevin:

No, it's a ... it's a really important topic to me. Only because, in the construction industry, you know, there's this, this mentality of, you know, we've got a job to do. We just got work to just get down and work. But ... but our industry's changing. We've got a younger generation coming in. And, yeah, we have an industry that requires work Very, very, unique to our world. But at the same time, we've got individuals that are making up our workforce, and the care and concern we show those individuals, I think, is paramount to the success of our industry overall. And so this is an important topic for companies that want to be successful, that want to retain the very best talent. They're going to have to figure out ways to take care of their people, beyond just a paycheck. So, I think this is a topic that's vital for the success of our industry as a whole.

Jack:

Absolutely. Well, again, thank you, Kevin, for taking some time to speak with us here. We'll go ahead and let you get back to it here.

Kevin:

Sounds great. Thanks, Jack.

Jack:

Yeah, thanks for listening. Bye.

- End of Episode -

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