This story was originally published in Builder.
Like objects in your vehicle's side view mirror, one solution to one of home building's biggest problems right now--a scarcity of "next generation talent"--may be closer than you think.
Hopes that team leaders and innovators of home building's near- and longer-term future may feel an inescapable tug of a residential construction management career in some of the nation's construction sciences programs at colleges and universities, may be a pipe dream. Or not. What's curious to think about though, is that may be entirely up to you.
That's the conclusion Randy Birdwell--a former executive, owner, partner, and trusted advisor of home building companies across a three-plus decade timespan--reached. After a vaunted career in the field--including 13 years as president of Houston-area builder Emerald Homes, through the time that D.R. Horton acquired Emerald in 2001, and subsequently, almost five years as D.R. Horton regional president, followed by just-shy of 13 years at the strategic and operational helm of Gracepoint Homes--Birdwell decided to pivot.
Or, didn't exactly decide. More like, had an epiphany: Maybe the blend of institutional knowledge, business cycle experience, and habit of motivating people could find use in an entirely new context. End one career, perhaps, and kickstart dozens of new ones.
So, Birdwell this past July signed on as Homebuilding Industry Director at his alma mater Texas A&M University, College Station, Tx., with a mission to inspire, motivate, educate, and launch college seniors into the ranks of home building's up-and-coming leaders-to-be.
Now, well known and much talked-about these days, construction has a shortage of labor capacity--men and women with skills in the building trades, or among producers and distributors of building materials. The latest data illustrate. Average ages keep trending upward, and more skilled construction workers are aging or getting injured out of the industry than are entering the ranks as reinforcements, by a long shot.
Equally dire, however, and less visible to the public, is the home building and residential development business community's talent challenge: the fact that so few of today's bright, entrepreneurial, business-minded, high-potential young individuals choose home building.
It's not just workers on the job sites that are holding back the building industry from producing more homes at higher productivity levels, it's the lack of job site supervisors, community managers and directors, division leaders with construction, business, finance, real estate, marketing, and technology chops who could double-down on productivity at a time nothing is needed more.
So, Randy Birdwell chose a next chapter that focuses on just that. And it all started with one of the few things Birdwell tried in his life that, since graduating from Texas A&M with a BS in civil engineering in 1978, he found he was really not good at: Retirement.
"I tried it twice," Birdwell says. "I got bored."
During the latter attempt--after deciding to exit Gracepoint in 2017 as chief executive--he decided to have a home built by College Station, Tx-area custom home builder Keith Ellis. It was Ellis who'd had connection to Texas A&M, and who sparked Birdwell's epiphany moment.
So, Birdwell--who not only stepped in as Homebuilding Industry Director, but also was tapped as George Seagraves [a fellow former D.R. Horton executive alumni] fellow--spent this past summer designing a curriculum for a "Residential Capstone," management track course for Aggie seniors.
"We divide the class into five-person teams, each of whom forms a virtual division of a volume builder," says Birdwell. "They name their companies, produce a logo, and get to work on creating a business model."
Student participant teams acquire a piece of land, develop it, generate a schedule, produce a market study, select a product line-up, cost it all out, and deliver a business pro forma complete with cash flow analysis, unleveraged internal rate of return analysis, cost of capital, and a thorough series of margin forecasts.
"The final outcome is a business plan our students present to a virtual board of directors, which consists of friends of mine who are executives at a number of the home building companies," says Birdwell. "We've taken to hosting teams at the house on Sunday afternoons for strategy and operations sessions, and these kids get it, they're amazing, competitive, and focused. It's a blast!"
What's come clear in the process, however, is a distinct bias many Texas A&M students have toward commercial construction rather than residential construction science and management programs. Birdwell notes, anecdotally, that fewer than 10% of Texas A&M's construction-bound students set out on a path toward residential construction management education and careers.
"I think the commercial construction business community has done a much better job of telling a clear story and showing the value proposition to young prospects," says Birdwell. "We home builders have done a very poor job of making residential an appealing career pathway."
The big differentiator that accounts for the gap in appeal between commercial and residential?
"Compensation," says Birdwell. "Many of the commercial entry-level construction management jobs are straightforward with their salary and comp offers, whereas the home builder jobs come with complexity, conditions, and questionable triggers. The pay may wind up being as good as a commercial construction job, but it doesn't come across that way when there are so many circumstances and conditionality to the offer in home building."
Birdwell's career goals now focus on trying to develop talented men and women--at a raw materials level--who will evolve into the presidents, ceos, and management level executives of home building's enterprises in the future.
So, as all builder firms of all sizes model their businesses, generate forecasts, allocate resources and investments for 2019 and beyond, the question is this: Is land the be all and end all of your investment strategy as you look forward? Or might talent be an equally appropriate high priority for investment?
This story was originally published in Builder.
