As senior employees and managers approach retirement age, they could potentially take their “back in the day …” experience and skills with them as they leave. This naturally puts pressure on the company to ensure that its remaining workforce has retained some of that knowledge as it moves forward. Add to that the challenge of the volatile COVID-19 environment, and contractors and HR departments are facing fluid and complex workforce and management challenges.
Many of the most successful electrical contractors are finding ways to retain and preserve the institutional memory of retiring employees. But ECs need to address unpredictable problems as they arise.
On Jan. 1, 2020, Rosendin Electric, San Jose, Calif., transitioned to a new leadership team. While it could have led to a massive loss of experience right before the coronavirus pandemic hit, the retiring senior executives remain active board members to mentor the new leadership. Those former executives helped grow the company from a multimillion dollar company in the 1980s and ’90s to the multibillion dollar company it is today, said Lisa Vere, Rosendin’s vice president of quality and training. During that time, they navigated the company through a number of economic downturns, so their experience has served the company well over the early months of 2020.
“Under their leadership, the company put several crisis-response processes and procedures in place,” she said, adding that this has been invaluable for senior managers because they ”provide context to why certain things are the way they are.”
In the recession fueled by the coronavirus pandemic, electrical contractors have faced the problem of meeting payroll demands while ensuring profitability after projects were paused, delayed or canceled.
Contractor management and HR departments need a long-term strategy as they make their hiring and layoff decisions, and they must be flexible in how to keep their older workforce—and its valuable knowledge—for the projects and changes ahead, said Tony Lee, vice president at the Society for Human Resource Management (SHRM).
Prior to 2020, electrical contractors focused on finding new electricians well-versed in the latest technologies and with versatility to change with the market. But there is no replacement for the experience that older generations gained day in and day out on the job.
“A lot of companies were dealing with brain drain and trying to backfill, to find people who could train with these guys,” Lee said.
When COVID-19 hit hard in March, individuals who were nearing retirement reevaluated their situations. Some older workers have opted to hold on to their jobs a little longer, perhaps to protect their retirement. Others who were laid off elsewhere are seeking re-employment. For those workers who were furloughed, whether they return is a matter of personal choice and circumstances. That means the measured approach of hiring and retiring has been turned on its head.
Talent shortages are lessening, and questions instead can focus on finding creative ways to keep staff on payroll when revenue is limited.
Some ECs already have programs in place to ensure a smooth transition of knowledge as retirees leave, and those programs are as important as they ever were.
For example, New York contractor E-J Electric Installation Co., has frequently transitioned experience and knowledge as leadership changed hands within the business for 121 years.
“From a personal standpoint, this has also happened for the past three generations of Mann family leadership,” said Anthony Mann, E-J Electric president.
The key for E-J Electric to pass along valuable experience and knowledge, he said, has been leadership development and mentorship, “as we move forward into a new economy, with new technology.”
For instance, more than a decade ago, the company developed and implemented an internal leadership development program. This year-long program includes staff from the field, engineering, operations, project management, estimating and business development. Selected senior leadership members are assigned to coach key personnel on skills such as leadership development and technical aspects of the business.
“This allows the transferring of knowledge from one generation to the next,” Mann said.
The company also leverages a 14-year-old mentorship program. With this model, emerging leaders in the company are paired with experienced professionals.
“Both our leadership development and mentorship have become the cornerstone of our business,” Mann said. “E-J encourages and facilitates the sharing of knowledge; without this, we would not have the leaders of tomorrow.”
Those programs can help a contractor navigate recession economies and times of growth, but the immediate challenges require some flexibility when it comes to hiring and personnel management as well.
For example, Lee said, employees approaching retirement may want to stay with the company longer than originally planned and can offer their talents on a regular basis to transfer the knowledge.
However, even in unprecedented times, choices made today need to be thought out in the long term as well. The 2020 recession is creating challenges now, but companies still need a strategy that looks three, five or 10 years ahead.
“It’s a skill that the CEO relies on HR to do,” Lee said. “Looking out a year, looking out five years. They need to ask what services are going to be important and match the workforce to meet it.”
The knee-jerk reaction, of course, is to ensure that the bills can be paid now and reducing payroll expenses is the easiest way. But Lee pointed out that companies need to be careful who they lay off. Some may carry with them valuable knowledge the company can’t afford to lose.
Not every furloughed worker returns, Lee said, as many start job-hunting. In the long term, that can be a loss for a contractor’s experience and expertise.
“That addresses the other issues,” he said. “If you can’t make payroll because business is down, research says don’t lay people off. Ask them if they are willing to work for less to get through this.”
Lee gave one example: management may say, “Instead of us laying you off, how about 20 hours a week?”
Potential retirees may be willing to accept a temporary pay reduction, especially if being offered fewer hours.
A healthy company uses a balanced approach.
“We are extremely thankful to have so many tenured employees at Cupertino Electric (CEI) who bring immense value to the company,” said Talin Andonians, chief people officer at the San Jose, Calif., company.
But that’s only half the story.
“We also have newer employees who bring a different perspective and can work closely with established employees on ways to elevate the proven strategies that have made us successful,” she said, adding that a lot of institutional knowledge needs to pass along as leaders depart. “But it’s just as important to focus on improving and advancing new ideas so that we can stay efficient and competitive.”
CEI leverages a formalized annual development program that about 15 top field leaders attend with regular courses, lectures and lessons learned. For office employees, the company is launching an online comprehensive learning management system (LMS) that includes a mix of custom content created to onboard, educate and grow employees in their roles.
“We are fortunate to have several retired employees return in estimating, engineering production and technical training roles [serving as consultants],” Andonians said. “This has worked well for us because our departing employees can transition from a full-time role and our current employees get the continued benefit of their insight and knowledge. “
She pointed out that ECs rely on experienced professionals to quickly identify the small issues today that will create big problems on a project tomorrow and to effectively communicate project cost and scope changes without alienating customers.
“These advanced skills usually come with years of experience, credibility and a deep understanding of project dynamics,” she said. You can’t shortcut that kind of knowledge.”
Since the COVID-19 shutdowns, CEI and other contractors have experienced lower productivity on job sites due in part to increased safety measures and more space required between workers, all of which can significantly affect schedules.
“That means schedule management is critical right now, so having experienced professionals in the field who have a track record of success delivering on time is critical,” Andonians said.
Rosendin Electric also administers several programs that use the knowledge and experience of senior executives, including those approaching retirement, Vere said. These programs include the Leadership Academy, where young, high-potential individuals get the chance to interact with and learn from senior executives.
“We also have a master’s program in which we invite retiring executives or those newly retired to develop content and teach in their area of expertise,” Vere said.
The experience of the older generation is of absolute importance and relevance, Vere said. And while the construction industry is evolving in its use of technology, “the way we put buildings together in the field has not changed substantially. Many of these senior people understand not just the ‘how’ we do things but the ‘why’ behind it.”
That is valuable information for younger generations coming up in the industry, which should be retained.