The shortage of skilled craft workers in construction has been perhaps the top story of the current building boom in Portland. Insufficient manpower has already led to rising costs of public projects, and its full effect likely won’t be understood for years.

But the problem doesn’t stop with employees in the field. With construction work now abundant following a deep and debilitating recession, general contractors say it’s difficult to recruit and retain the best office talent, and their best subcontractors are stretched to the breaking point.

Headhunters are prowling LinkedIn on behalf of clients willing to pay above market rate –bolstering a client’s workforce as much as it weakens the competition. Reportedly, several exoduses from top firms have occurred in the past year – the result of new, out-of-state ownership, or scandal at national offices. In some cases, things have gotten nasty.

Home/office

There are two worlds in construction, Hoffman Construction vice president Bart Eberwein said – the field and the office. Workers in the field are critical, he said, because they make up the vast majority of a company’s workforce, as well as perform the actual building of things. The reasons for the craft labor shortage are deep-seated and cultural. The tightness in the market for top office talent is similarly complex.

The pipeline for estimators, accounting professionals and project managers seems solid, Eberwein said, according to graduation rates in relevant college majors and his experience in the Portland market. Hoffman has a strategy of hiring primarily young people and trying to keep them as long as possible. But the workers emerging from college today aren’t like earlier generations.

Loyalty is different for millennials, who’ve faced a more mercenary professional landscape and wages that have more or less been stagnant since the 1970s. This has led young people to see themselves more as “free agents” increasingly willing to jump ship.

“Most people used to be impressed at career fairs when you’d tell them they’d be able to stay until retirement; now it’s not the same,” Eberwein said. “Now you know that if things don’t work out, you can always move to Austin or something.”

To keep its office talent, Eberwein said, Hoffman tries to provide three things – freedom, respect and money. Hoffman doesn’t have a human resources division, in part so employees are treated like individuals, he said.

“We instill loyalty by giving people a heck of a lot of rope,” he said. “We give them the freedom to grow into their own strengths, and learn from their weaknesses. You don’t see a ton of people get fired. We take the long view and make it attractive to stay a long time.”

More than a century old, Hoffman is Portland’s largest builder, with about 600 salaried personnel and around 1,500 hourly, primarily union workers at any given time. Eberwein admitted that having downtown offices in Portland and Seattle is also crucial in landing top young talent.

Darin Stegemoller, vice president of JE Dunn, agreed. His company, the eighth-largest construction firm in Portland (according to local billings), last year relocated to a thoroughly modern space in the Pearl District. The new office is a far cry from the former, in the industrial North Columbia neighborhood. There’s now a palpable buzz and new, creative energy, Stegemoller said.

“Location is key,” he said.

Some of JE Dunn’s younger employees have been up front about their intention to work for a few years before taking time off to travel the world. Ultimately, it will be years – even decades – before the company reaps the benefits of its current corporate practices.

“Loyalty’s really determined over time,” he said. “That’s the real litmus test.”

Matt McClenaghan, 29, has a friend who was fired from his first job out of college for having a beer at lunch. On a Friday. His birthday.

That company is a major investment firm in Portland. It’s the kind of place that McClenaghan said he never wants to work.

“You want to work in a place you’re proud of, a place you want to show your friends,” he said.
JLL, with specialization in tenant representation, works at the edges of the building industry. It pays particular attention to cultivating a stress-free office, said managing director Matt Newstrom. It recently moved into an ultra-sleek space in the trendy Brewery Blocks district. The move was partly due to its commitment to employee retention.

Sub-plot

Though many building and development firms focus on fostering an enriched office culture to retain skilled workers, much of their work around town is ultimately performed by subcontracted and union labor, which is another beast entirely.

Western Partitions Inc. of Tigard is among the busiest subcontractors in the Portland area. It installs drywall, plaster, steel-stud framing and other interiors/exteriors. With regular work at Intel, Nike and other large commercial projects, WPI lately has been quite busy in Portland, according to Mike Roach, who founded the company 45 years ago with his wife.

“In the Northwest there was a lot of pent-up work stalled by the recession,” he said. “Now it’s humming like the mid-2000s. It’s kind of dumbfounding it’s so busy. The architects are busy, and they’re hiring, so you know it’s going to keep going.”

Being a big subcontractor during a building boom presents unique problems. Roach said GCs get a leg up on hiring the best talent emerging from college. WPI does post job listings (accounting professionals are especially in need), but the problem is that everyone else is also looking to hire. The company has resorted to using a headhunter to fill open positions, Roach said. Some new hires have been lured to Portland from outside the area, while others have come from local firms. But often, Roach said, the process works the other way around, with cold calls coming from competitors’ employees who are interested in greener pastures.

“Word gets out,” he said. “Then people start to call you. It’s unfortunate that it happens, but what are you going to do – not hire them?”

Along with worrying that their best workers will be snatched away by competitors paying above market rate, subs can be undone by pressure to say “yes” to the general contractor. Word is, one sub was recently undone by work at Intel, growing too fast too soon.

That’s why when a recent Nike project experienced delays, WPI decided to walk away to keep its cash flow regular, Roach said.

“We had to pass,” he said. “We didn’t want to, but we had to do it.”

One advantage WPI has over smaller subs is four other regional offices, meaning it has a little more leeway to shift resources and draw in talent.

The building boom has allowed companies large and small to become choosier with their workloads, Eberwein said.

“Everybody knows that you’re only as good as your rĂ©sumĂ© and your relationships – why set up yourself for failure with a C team?” he said. “My view as a general contractor is that there were a lot of lean years, and so you want to make hay while the sun’s out. The temptation is to make as much hay as possible to make up for the lean years.”

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