Recruiting and hiring are two different things.
Welcome to builder nuggets hosted by Dwayne Johns and Dave young. Hey, our mission is simple, build freedom. We are a couple of entrepreneurs turned business coaches who have dedicated ourselves to helping our builder remodeler clients create the most rewarding businesses in the industry. My co-host Dwayne has been a successful builder and remodeler for over 30 years. He's seen the highs and the lows. From the beginning though, Dwayne has been on a quest to find a better way to run a contracting business. In 2016, he found that better way. That's how I met Dave, a lifelong entrepreneur and visionary who measures his success by the success of those around him. He reached out one day with a formula on how to transform my business and the rest is history. Since then, we've teamed up to help hundreds of contractors like you build better businesses and better lives. Now we've decided to open up our network and share our secrets so we can start moving the needle with you. It's collaboration over competition. Each week, we bring together industry peers and experts who share their stories so that we can all build freedom together.
(01:09): It's one of the biggest topics in the industry today, Dave, how to find good people, everyone's competing for talent, but who's doing it right. Our guests today are Duane. These guys have cracked the code on how to reach top construction professionals all across north America. In a six part series, we are going to lay out the myths and the truths of what you need to do to win the talent race
(01:28): Offices in California and Hawaii contractor, staffing sources, services, every market in Canada and the U S this has been their specialty for over 35 years. All Sandeman is a business coach. Who's dedicated his life to helping builders find great people. And Earl is Stanford MBA with over 30 years of building experience together, we're going to help you grow your team. Welcome Paul and ed. Thank you.
(01:47): Thanks for having Yeah, Paula, you've been doing this for a long time. How It reminds me it's actually 45 years. Do you know? I hate to admit that, but it's true. We'll go back and walk us through how it all got started. I mean, this is so timely right now, and we're going to dig into why this is so important, but before we do that, it's always great to hear about how you came to be an expert in this field. And then ed, we want to hear how you got involved as well.
(02:14): Well, I mean, I have been your business coach for 35 years, right? Basically helping residential contractors and being 2 million in probably 20 million, 30 million and about four, four years ago. Or so the biggest problem I had was I could do the marketing side. I could build a business side, but we couldn't find any people. That was the biggest problem. How do you find talent? So I did some research and found a really good assessment program, found a really good applicant tracking system, which automates the whole recruitment process and the software wasn't much, it's like five, 600 bucks a month. So I went in and I asked, okay, why don't you guys use this? So I gave the tool to my contractors, right? And it's sort of like giving somebody a backhoe who want to follow instructions, right. Failed, miserable, because they don't have a time. They didn't do it.
(03:05): They thought it was a great idea, but they didn't do it. So I started this company about four years ago and I start, okay, you don't do it. I can do it. I hired one guy to start off with and said, we'll do it for you because in recruiting, you've got to be on it every day. You can't like, you know, we give people a lead and they call him back like a week later that doesn't work all the good talent's gone in 24, 7, 24 hours. So what we realized was that we needed to do the for them because they literally don't have the time. It's like no time for time, man. Right. So the key is, if you're going to do this, you've got to have the best equipment, the best technology and be on it every day.
(03:43): And you touched on something there where it's, these are our clients do like this amount of business. Who are your clients? What's tell us about the range of who you guys help out in this with us. I would say our smallest client is husband and wife team, or maybe just many needs a carpenter. That's probably the smallest. Most of our clients do between two, probably and 10, 15 million. We have a couple of large clients that do a hundred million. And for that client, we found him probably 200 carpenters in the last four months, but he frames 50 houses a week. It's a big company.
(04:23): Yeah. That's another level. And, and how did you get involved in in this? What, what attracted you to this problem that the industry had and the opportunity to work with with these business owners? Yeah.
(04:37): Well, Paul and I have worked together for what seven, eight years, I guess, really as business coaches. And I started working with Paul and I also give presentations under the name of the Zen builder is particularly focused on homeowners because that's really been, I've been an owner's rep for custom homes for 20 plus years. But, you know, it was really in working with Paul and, and doing our coaching together with contractors. We just realized that that was the biggest fundamental problem that most of our clients had, was finding talented people and building their staff and that they were really hamstrung limited in their capacity and their ability to really function and operate their businesses because of, of staffing issues. And so we figured, well, let's create this company to be able to, to address that. And it started again with just really working with our consulting clients. But after a while, we realized that we had such an impactful, important thing. We, we opened it up to the entire residential construction industry
(05:40): As proof of how important and impactful it is. You guys were sharing with me earlier that just in Q3 alone, you've had 50% growth in your business. So if you were ever looking for proof that it's an important piece right now is, is certainly the time. What do you think led to this? And what, what do you think most people are doing about it?
(06:00): Well, I would say what the pandemic didn't help out much, right? Because the paying damage make basically increased the demand for construction with people, either, you know, feather to the internet or building a new, right. So it pushed the industry and they have supply chain issues, but there's also labor issues. So before the pandemic, it was not easy to find a good project manager or carpenter or whatever. After the pandemic, that's gotten really hard because those people are in demand. And the other issue that has come up is that what happens is labor rates have gone up disproportional to what people are paying their current staff. So let's say I'm paying my project manager 100 grand a year, right. And I'm in San Francisco. That same guy this year was 130,000, which means I'm underpaying everybody that already works for me. So then I've got the whole dilemma of how do I bring new people in paying them more than people that have been with me four or five years.
(06:59): Yeah. And we're going to dig deeper into some of this stuff. You know, you guys in building this business and combining your experience, your coaching and everything that you've learned by being leaders in this industry for so long, you've really uncovered six myths that hold contractors back from success. I was thinking about them as you have the point and counter points on your website, and we're going to go through them in a second. I kind of look at it as the six truths as well. And it depends on how you're wired, which one you focus on or how you look at it. But bed walk us through the six myths that you guys have developed. Give us the list.
(07:36): Okay. So the first myth is only recruit when you need someone, which some ways makes sense, right? Why would you recruit for someone if you don't have a position in your business, but we'll tell you why that's a myth. The second is that employees are expensive. You know, gosh, well, the more employees I have, the harder I've got to work. And, and, you know, because I got a higher overhead, the third myth is, you know, how hard, how difficult can it be with recruiting? We can do it ourselves, right? We'll just post a couple of ads on indeed and ZipRecruiter. And why, why do we need to hire someone else? We can do it ourselves. The fourth one is that, you know, we're in a very specialized industry. You have to hire people with industry experience. You know, you can only hire from within the construction industry.
(08:20): And we have found, especially since the pandemic, that that's, that that's a myth. That's just not, not true. The fifth one is you need to hire fast and fire slow. And a lot of people are doing that right now, but the truth is you should be doing just the opposite that you should be hiring slow and firing fast. And then the sixth and final myth has to do with the project mentality that we have in the construction industry, right? Everything we work on as a project and every project has a beginning and a middle and an end. And oftentimes contractors approach recruiting in that same way. And they think that it's a project and it comes to an end, but that's a myth. And the reality is that recruiting never comes to an end. You should, you know, you'd never, you never stopped recruiting. It's a, it's a process. It's not a project.
(09:09): If that comes to an end, your business has probably come to an end. Well, that's a really good list. And I'm sure there are a lot of people out there who are in hearing this know that they have fallen into we'll call them tracks or have, have bought into these myths before, or maybe have proliferated them in their own head because some of these things exist because that's the way the industry has been conditioned. A lot of that is that it is, is because of that and has been developed that way. So it's going to be fun for us here, as we unpack each one of them and dig through them and everybody can challenge, you know, is, is free to challenge whether they believe that or not. After, after hearing your, your take on it. And it will be a great deep dive as we go through all of them.
(09:53): And in this episode, we're going to kick off the first one. One of the questions we get asked a lot is what is the ideal time to look for a new project manager? You're balancing workload. You're looking at your schedule. You're trying to figure out when do I need to bring somebody on and like, Hey, I'm going to need to, like you talked about earlier, I'm going to need to post an ad in, in March. Cause I got this pipeline building up. So let's kick it off with episode one here, a deep dive, only recruit when you need someone who wants to handle that,
(10:26): I'll take a shot at that. The thing is, you never know who's out there. I mean, you don't know, maybe your competitors never one project manager for whatever reason, decided he doesn't want to work there. You don't know when that moment happens. So if you're orange recruiting, it's like having a net or that you know that the line in the water, if opportunity comes along, that'll be there. And it's a very low cost when you think about it. So I think the reason you need to recruit all the time is because you never know what the talent pool is and when the right perfect, person's going to show up.
(11:04): Yeah. You know, like when I explain it to contractors, I use a football analogy and you know, if you look at any good football team, they don't just have a first string quarterback. Right. They've got their second stream was just this, this weekend, right. We had a few Jamis. Winston went down. So if the saints didn't have a, a backup quarterback, they would been in trouble. And you never really know when you might lose someone. When you're project manager, you know, their spouse maybe gets relocated, especially during COVID and they're, Hey, we're, we're moving. Or, you know, a lot of people are, are re-evaluating their jobs and their positions. And so you should always be building your bench, always. You can, if you've got your first string players, you need to have your second string, your third string players, because you never know when you're going to lose one of those
(11:54): And ed, I, you know, I'm glad you brought up the football analogy there. Cause I think about it, you know, in that situation where you lost your quarter quarterback and you know, the men, maybe you lost the backup and God forbid, you lost the third guy. Well, if you get in that situation, you're going to scramble and you're going to run out and you're going to hire somebody. Correct. You know, whereas recruiting is what are those NFL and other sports teams doing behind the scenes, constantly recruiting. And I think as builders, remodelers, we're recruiting in the sense when we're building our sales pipeline, we're constantly doing things to market to get out there to make sure that we've got runway projects coming in. And that's, I think the mindset that's missing from the hiring standpoint, you know, in recruiting is way different than just simply hiring. So it'd be great if you guys can touch on that a little.
(12:35): Well, it also helps prevent what I call raised by black male, especially when there's a heavy demand. So what happens is your project manager comes into you and says, you know, it's not my idea, but my wife said, you know, I've got an offer here. It's five more bucks an hour. I really like you guys, but you know, happy wife, happy life. I guess if I don't get five more dollars, I'm going to have to leave. Which is very frustrating because you can't give into that because it sets a really bad precedent. But at the same time, if you haven't got a plan B you're between a rock and a hard spot,
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(13:29): Another way I explain it to and for a contractor to understand is it's kind of like your pool of subcontractors, right? Any good contractor, doesn't just have one electrical sub they've got their, their main guy that they give most of their work to. But especially now with things being as busy as they are in the construction industry, you need more than one sub in each tray, right? So same kind of thing. Even if you've got your, your star project managers that you've got on staff, you need to have some backups. You need to have other people that can be there. And it doesn't mean that there's some of them may maybe actually hired in your company, but the other could be, you've just got, you know, two resumes sitting on your desk of people you've talked to in the last 30 days that you think could be really superstars when, and if you need them well,
(14:13): That's the when. And if you need them is so different in developing the relationship. And Dwayne touched on it a second ago, when he said recruiting and hiring are two different things. You shouldn't always be hiring. You hire when you need somebody or before you need someone. Or if you find the right person probably compels you to hire them early and find work for them. Their recruiting is the act of developing a relationship and making it be known that you want to have interaction with people and give them the opportunity to learn about your company. And you get the opportunity in return to learn about them, to see if there's a good fit there. And that just should be happening all the time. We, we, Dwayne and I joke around. It's like, if you compare it to recruiting for clients, nobody ever says, oh, I've got enough.
(14:58): I've got, well, sometimes they do, I guess in today's market, maybe, but I'm going to turn off my marketing because I've got clients right now. And when those projects are done are just about done. I'm going to turn my marketing on again and then see if I can find clients. Like, why would you not continue to project who you are and develop relationships with the best talent in the industry so that they want to be a part of your team. It's just, it makes no sense. So when, when you guys laid this out for us, it it's, it's so clear that the path that, Hey, develop this mindset and you will continually improve the team that you don't have yet, which is cool. And when you think about it, your team is arguably more important than any client you're going to have. So it takes a little bit of future thought. It takes some effort, some leadership on your behalf, but when you see builders that are good at this, what are they doing to have this in place? And we're going to talk about outsourcing and all that sort of thing too. But what aspects of this are builders good at? And what aspects are they maybe not good at? And what are some best practices? You guys,
(16:12): One of the things is it, I can't think of any successful company in north America. That's not always prepared, whether it's Costco or Starbucks or whatever. They're always looking for good people because they realize they're only as good as their team. And that becomes a primary function of that business is always building your team and always looking for 10.
(16:37): So do you think we just discovered myth number seven, where there will be people saying, yeah, but those are great big companies. They're all over. They need people all the time. There's some reason they're successful, like to say success leaves, clues, right? And we worked for contractors. It has to do with building your culture and building your identity in the community, right. That that's a place everybody wants to go to work for because they're great guys, ladies, they build a great product. That's a real place I want to be. And so if I get the opportunity, I would just love to work for AB construction because they're the best in our community. And I, my goal is to go to work with them eventually and be good and FFL actually hire.
(17:22): Isn't it, isn't it amazing how your team shows the world, who you are, your, your, your team, your talent are your company and they are the best magnet. And yes, that's why people want to go and work with those big companies. I was kind of putting you on the spot there a little bit with that challenge. The reality is, is if you don't want to grow at all, then you don't need to be marketing or recruiting all the time. You're probably just to stay a sole proprietor because it's probably just going to be, to be any company that wants to grow any company that wants to insulate against the risk of losing someone or creating a bigger magnet is going to want to do this. It doesn't matter where
(18:04): I would take contention to. Even if you don't want to grow, you just want to get better, right? Because everybody has that worst employee, not bad enough to fire a gun and good enough to keep, right. There's always the bottom 10%. And so as a company, even if you say, I want to do 5 million, I never get, want to get any bigger. I want to have 15 and boys, that's all I ever want to have. Don't you want your team to get better because the better team you have, the more fun it is to work. The more I've been doing this for 45 years and the number one problems that all contractors have are not great. Employees are not great clients. If it wasn't for employees and clients, this would be an easy industry, right?
(18:44): Having that pool of talent to pull from whether you're large or small, it just means that you're doing something about it on a regular basis. You're not waiting to be reactionary. You know, look at it as from a safety standpoint, you're not going to put your safety plan in place just before the accident happens. You're doing it. It's preventative. You're thinking long-term. And I think that's one of the struggles I think with recruiting, first of all, most people don't like doing it. They don't want to do it, but if you look at it that way to break it up into, you know, how can I make this smaller pieces? Whether it's something as being outsourced or whatever, but it's constantly going on. Cause it takes a while too, right? I mean, you're not going to recruit generally. You're not going to recruit quickly.
(19:20): Well, what used to take long takes even longer in this current situation, right? Because there's a high demand and low supply. So we say, give us at least three months to find somebody. If you're lucky, the other thing is the longer you have to find the person, the more chance you have of finding the right person. What happens a lot of time for contractors is they get a big project and oh my God, I'm in big trouble because I don't want to buy it and manage it. And I hire the first warm body that comes through the door. And that's very expensive because nothing can cost you more than the wrong guy or girl working for you. That's a disaster. And so you haven't got the pool and you haven't got that. You're not considering your most important thing is to build your team. Then you're just reacting to whatever demand you have. And it's not a good approach.
(20:14): So when I think of recruiting and I'm thinking of it at the beginning here you know, I think of it as putting together a plan for all of this other stuff and probably all these other myths that we're going to touch on here. But what at a high level does it look like? I mean, what, what is putting a recruiting plan together? Look like
(20:31): We're sort of a big EOS van and skilled unit putting the right people in the right seats. So first you have to decide what all the right seats are, right? And you have your, you know, when you're for your find your clinic and your planning, and then once you have the right seats and you've got to find the right people for the right seats and you, you build your organization in my opinion, around the right seats, not about the people, but unfortunately, a lot of construction companies, the right call personality driven versus process driven, which means they mold the company to meet the personalities of the people that work for them versus process-driven when they create a process and they find that people that are best at that process. And when you have a personality driven company, it goes all over the map. But the totally depends on who works for the company.
(21:23): That's a really good point. Dwayne, your point about a plan is, is such a good one because when we talk about how you create a rewarding business, how you reduce risk and create value in your business from day one, there's any element that you don't have a plan for. There's a little bit of risk. And if you do have a plan, there's a heck of a lot of value. And it's something that you can hone and develop as you, as you grow. And somebody else can come in and operate in and understand exactly what to do with it. So it's, it's recurring. And that plan may be something that you execute, or it may be something that you bring in an expert to execute for you. And we're going to talk about that. That's one of the myths that we'll talk about in a, in a future episode is who should do what and when, but it's where you find your people, how you get your people, how you attract your people is key to growing a rewarding experience and having a valuable business that runs better with less of your time. More of a self managed business.
(22:32): One of the things that people way underestimating, you might call it cultural fit, right? The person that say you're all born again, Christians or a Buddhist, or you're all, whatever you are, right? You're all Provax on effects. Doesn't matter. The person has to fit the culture because even though they may have a talent, they may have the experience. If they don't fit the culture, it's not going to work. And a lot of people underestimate how important cultural fit is. They just say, oh, he's got the experience. We're just hiring. And that's not true without a culture fit and you're in trouble.
(23:05): And the opposite can be true too, or limiting in that somebody feels they have a culture that they want to protect and ensure, which is very smart to do. That may be one of the reasons they think that they have to do it themselves because they may not trust somebody else to convey their culture adequately because it is so valuable. So the opposite can have an impact as well. So really, really important stuff there.
(23:33): You know, I, I wanted to kind of bring it back to a little bit more of the practical matter of it, which is oftentimes contractor will tell me, well, so let's say I'm not actively looking for someone. How do you even interview them? What do you tell them? You know, do you tell them that you're looking for a position? I don't want to be dishonest about this. And you know, we tell them, no, you you'd say, look, you know, right now, w you know, we don't actively have a position, but I'm always looking for great talent. And if you're interested and willing to spend the time, I'm willing to spend the time to interview. And that does a couple of things. First off interviewing and recruiting is a skill that you have to continually practice. So by setting up this where you're talking or interviewing, say one person a month or two people a month, you're improving your interviewing skills.
(24:25): You're learning how to be more effective. Second, you're setting a benchmark for yourself. So you have an idea of when a candidate comes, how to evaluate them relative to the other people you've talked to. If you wait until you need someone, and then you're just interviewing people, how do you compare them to what else is available out there? So that's the other reason to be ongoingly interviewing. And I think even in today's market where, you know, there's clearly less candidates available than there are jobs available, then we'll still talk to you. Even if they know that you don't actively have a position, particularly if it's someone in your market and you have a pretty good reputation, you say, Hey, look, you know, Jim, why don't, let's just get on a zoom call for a half an hour tomorrow. And just kind of hear more about you, because also you never know when, you know, Jim, two months down the road gets, you know, disenfranchised with his current employer or his boss changes. And if you've just interviewed him, then it gives you a good reason to be able to, to, to talk to someone about that
(25:25): In your business. It's probably one of the worst spots to be in is the reactionary when it comes to hiring. I think about it the most like the rebound boyfriend or girlfriend, you know, we've all had the rebound hires, you know, something's happened and you've had to do something quick and something, one part of your brain tells you, you need to fall in love with this person when you've done none of the groundwork, you've done none of the real recruiting and getting to know each other. And that's why you've got to take the time, got to have that pipeline of people. It makes it so much easier because you don't feel pressured into hiring at that point. You know, you've done your due diligence, but again, that takes time and constant nurturing, right?
(26:00): I would say if I was going to give one advice, you know, for 45 years and a hundred thousand hours of working with residential contractors, the most important thing that anybody does as a residential contractor is create and manage a great team. There's nothing more important than,
(26:19): Yeah, it's the team that delivers the experience. It's the team that delivers your unique team experience. And that's what your clients are going to remember. That's what they're going to remember. And again, getting back to this whole magnet, what the rest of the world is going to see and how you attract better and better, a higher levels of talent and, and grow a more valuable business. And let's face it. You know, freedom of relationship is a great freedom to have where you're only working with the clients that you want to work with. You're only working and hiring the team members that align exactly with your mindset. That's how you create your unique experiences and your identity in the workplace. So this becomes something that's at its very core. One of the key elements to growing a successful autonomous business. So
(27:06): When it comes to the lifestyle of the owner, how much vacation they can take, how to respond, what's your life like owning a construction. If you have the right team, there's no better career out there. You've got money. You've got time. It's an awesome lifestyle. If you have the wrong team, it's the worst career in the world career. It's a job. It's
(27:30): The worst job in the world because you can't trust anybody. You can't ever take any time off. And usually not don't make enough money. So there's nothing that makes, And nobody's happy in that situation because you're not United and where, in, where you're going and what you're doing with it. Everybody has treated everybody else as a commodity or as a master and servant relationship. And it's just, it's not going to work, but you're right. There's, there's freedom. That's created for the owner. And we, we talk about this all the time. It's about building freedom, but there's also a freedom in working for a successful company where you're not treated like a commodity. You are able to put your spin on the business. You're able to see the impact that you're having on the company. You're valued for what you're doing. And that creates freedom at every level where everybody is, is elevated. So thanks for sharing those strategies with us. Dwayne, any last words or, or thoughts before we wrap up myth? Number one here? No, I was
(28:26): Just going to say myth. Number one, only recruit when you need someone. It's just as straightforward as it can be. And really I think get your head around. What do you have to be doing on a regular basis? It can't be something you just,
(28:37): Once in awhile, it's gotta be ongoing. If you want to learn more about Paul and ed and the services they provide, you can visit www dot contractor, staffing source.com or hit us up@ourcontactpageonbuildernuggets.com. And we can make a personal introduction, be sure to join us next week for episode two in our six part series on the myths of hire.
Hey, thanks for listening. Dwayne and I love hearing from you. Your stories are inspiring and your challenges can be overcome. Got a cool tip? Idea for a show? Problem that you haven't been able to solve or maybe just struggling to figure out what you need next and where to get it. We can help. Hit us up at BuilderNuggets.com and start building freedom.
