Aggregate producers, suppliers share insights at P&Q Roundtable

By |  April 19, 2017

Scottsdale, Arizona has played host to the Pit & Quarry Roundtable & Conference on a few occasions, and this year we brought the event back to the desert. Teaming with the Arizona Rock Products Association, the roundtable attracted more than 40 participants and observers, and included a talk by George Reddin, a managing director with FMI Capital Advisors Inc., and a question-and-answer session with Pit & Quarry law columnist Bill Doran.

The two-day event was sponsored by a number of equipment suppliers and service providers. Gold sponsors included Am Cast, CDE Global, Kespry, Kleemann, Philippi-Hagenbuch and REMco.

Following are edited transcripts from the two concurrent roundtable sessions that include two of the topics covered: infrastructure investment and the industry labor situation. Roundtable transcripts on MSHA matters will appear in the May issue and on regulations in the June issue.

TOPIC: With the election of Donald Trump along with Republican control of Congress, what changes do you see on the horizon for the aggregate industry? Trump’s proposed border wall would be a boon to the industry, especially in places like Arizona. Do you think it will happen? How will the election results affect infrastructure spending? Will the federal government look to the private sector to foot more of the bill?

TOPAZ ROOM

MADARA: What Trump wants to do and what he can do are two different things. But I can tell you I saw a level of confidence that I haven’t seen in a long time very quickly after the election. I think there’s going to be a lot of confidence and a lot of people willing to spend money that I haven’t seen over the last four years. So it’s pretty positive as far as what I can tell.

McLAUGHLIN: The environment with the producers after the election was unbelievable. There were a lot of positives. Projects that have been on delay or pushed back for years seemed to come to light. I’m very positive for us manufacturers that the buzz in the industry has really increased.

HAWKRIDGE: There’s certainly a lot of optimism. However, we do have a current infrastructure bill that isn’t getting the funding it’s supposed to be getting. We keep getting a continuing resolution on the budget. So while there’s optimism, I have some skepticism that we’ll actually get the funding due to not wanting to add to new taxes or an unwillingness to commit the dollars needed to get that next level of infrastructure spending.

TRUSSELL: With a Republican-controlled House and Senate, the question becomes what the pay-fors are going to end up being. So while I think the [president] will take a very aggressive stance toward moving commerce and investment in our infrastructure, there will be an interesting discussion in Congress about how that’s going to happen. And it is very important for us to see reauthorization with funding that the seeds grow where we are currently.

LOKEN: Being from Arizona, we are curious what the definition of “building a wall” actually means. We’ve already had severe labor shortages based off of past immigration issues and such. For us, it’s interesting to sit and watch while there is technically already a partial wall down there now.

GARRISON: There’s a large focus with the new administration on infrastructure and spending. Obviously, Trump himself is real big on construction and likes to build things. So I think there’s a lot of optimism in that regard. People are excited about the opportunity that’s there for infrastructure spending and construction starts, housing starts. There’s a lot of optimism, but it will probably take some time before we see that come through.

SWANK: We see the exact same thing. The optimism since the election in the aggregate industry specifically has been more than we have seen since 2010. There’s been a tremendous uptake in the conversations we’ve had with producers, quarry activity, and the actual equipment that’s moving. Hopefully, it turns into more than optimism. It feels as if the trend is there, but time will tell. With Trump having a construction background, he is used to seeing change physically with things. And so I do hope that translates into these infrastructure projects because that’s what he knows. He isn’t a politician. He’s not a lawyer. He doesn’t see change through regulation. He sees it through the manifestation of buildings. Hopefully, we can also see it through the improvement of roads, bridges and other infrastructure.

CLARKE: We are obviously sitting back and watching it, as well. We’re seeing how the market’s starting to change. People are very optimistic about what’s going to come. But we’re all sitting here waiting and wondering. We’re seeing customer activity has definitely risen. But one element for us is, with it being a ConExpo-Con/Agg year, everybody holds off until ConExpo. But over the next 100 days when Trump gets into place and we have ConExpo over and done with, we’ll start to see a big change and a big push onward.

HAWKRIDGE: Our optimism stems from the fact that 2016 actually turned out a little bit better than we had hoped – or for which we had budgeted. There’s certainly energy and optimism due to the election, but there’s also some energy and optimism going into 2017 because of what we saw in 2016 – finishing up a little stronger than we really thought it would.

HANNON: Touching on Arizona specifically, there’s huge optimism. There’s a potential for an outstanding project to come to light. But we’ve all learned that until we actually see it into effect to be very cautious with it. I think we’re seeing that across a lot of the projects in general. Our customers see things going well, but there’s kind of a holding pattern. There’s a tremendous amount of work that’s just sitting waiting for decisions to be made. We’re keeping that optimism semi-controlled right now just to wait and see if some of this breaks loose.

CRAVEN: From a manufacturer’s perspective, we see a lot of optimism. We see a lot of reawakening of proposals that we’ve been talking to aggregate producers about over the last number of months. But I think that there is one item, ConExpo-Con/Agg, and I think we’ll learn an awful lot more between March 7 and 11. I suppose the realist in me is sort of inclined to think that it might be 2018 by the time we really see that investment kicking in, knowing that when we return from ConExpo there’s an awful lot of optimism and new leads to be working on. But knowing how long they take to flush through the system and how many other people will be sitting in the reception of these aggregate producers to talk to them about the new plans, realistically, you’re looking at a six-to nine-month gestation period before a lot of those projects will actually become reality. Factoring in lead times, installation and commissioning periods, it’ll likely be spring ‘18 before a lot of new projects will come on stream.

CLARKE: It’s a long, slow climb. We all came out of that recession and we all held onto our seat pants as the business started to grow. As a company we are starting to grow our business in North America. We’re trying to grow it worldwide. We have a lot of other influences, as well, coming from outside sources, from China, from other manufacturers. I know that’s sort of off subject, but the reality is we’re sort of not sure how that’s going to affect us with the Trump administration with importers coming in. Is [Trump] going to keep manufacturing more solely held in North America, or is he going to keep people from importing products from other countries? That’s something we as a manufacturer are wondering about.

GARRISON: With the personality of Donald Trump, there are a lot of other folks who are already opposing him – not even really knowing what he wants to do. From the Democratic side, you turn the news on every day and there are people talking about boycotting him. So I think one of the challenges he’ll run into, even if he wants to spend a trillion dollars in infrastructure spending, is a lot of people will be fighting him. He doesn’t seem to have a lot of folks on his side. Both Democrats and Republicans are kind of on the fence about some of the things he’s going to propose to do.

REDDIN: The need for infrastructure spending is not new. The reason we didn’t get it the last eight years is politics. Politics is going to play a role here. We just don’t know. And I think uncertainty will drive us all a little bit crazy and make us pause and wait and see what’s really going to happen. But it is going to be political.

CRAVEN: There are things you can control and there’s things you can’t. We focus on the things we can influence and the things we can try and change. We continue to try and build a strong business that puts us in a position to deal with whatever the external environment throws at us. There’s no doubt another recession will come at some point. We’ve just got to make sure we’re strong enough to survive it when it does.

LOKEN: We’ve found the state of Arizona tends to have real highs. We tend to be at the top of residential or [in-demand categories], and then we tend to be straight at the bottom [of categorical demand] when it comes time for decline. So we’ve become very cautious but also optimistic.

HANNON: Dealing with what we control is a huge thing for all of our businesses. And we deal with that daily, right? One thing we’ve all learned through the past 10 years is how to operate a lot more efficiently and control our costs better than we probably ever have in the past. We still are stinging from what we went through over the previous years. So something should change. I think the ability to make decisions quickly [is important]. We’re not going to wait a long time like we potentially did the last time. But right now we’re still working within the [mindset of] adjusting to whatever the economy brings us.

TRUSSELL: When Arizona goes through something like this, we can always backdate. From a regional perspective, we see Arizona coming back. We’ve learned a lot from what we’ve been through. And I think Lloyd (Hannon) is spot on with his comments. We’ve learned a lot from what’s happened. We’ve adjusted for effect. And we’ve seen a lot of change in the industry over the last 10 years. I think we’re going to continue to see that. Going forward, we will treat this next recession a little differently than we have in the past based on what we’ve learned.

HAWKRIDGE: I agree with Lloyd, as well. When downturns are a little shorter in duration, you kind of ignore them and just continue business as usual through it. Then it starts to pick up on the other side and you kind of pretend the downturn didn’t happen. This last downturn was so long that the producers couldn’t ignore it. We did have to change the way we manage our business. So if another recession were to come in the near future, we kind of know what to do now because we didn’t turn a blind eye to the last one. We had to deal with it. We made some difficult decisions, and we managed our businesses through it. And we actually, probably, are stronger now because we did.

YANIK: Specifically, what are some of the big things you had to adjust?

HAWKRIDGE: We had to make difficult decisions to reduce the number of sites we operate, which meant selling equipment, laying off people, closing sites, shifting volume, working with our customers [differently]. Those are the kind of things we had to do because you can’t just continue to run and hope the sales come, because they didn’t. You had to manage costs and cash.

CLARKE: Manufacturers had to do the same. We had to improve uptime of equipment and reliability, and cost reduction, too. It’s kind of funny that as a manufacturer our margins are getting less as the years go on. The volume’s going up, but the margins are getting less because it’s so demanding out there. As a supplier to the producer, we find that over the last couple of years since the recession people are definitely a lot more nervous. They’re a lot more restrictive as to what they’re going to purchase. Before in 2007, it was, ‘Yeah, get me a crusher, a dump truck or whatever I need.’ But today it’s a lot more restrictive. People are more careful with their cash on their balance sheet and they watch what they’re doing. And it’s taking a long time for that to come back around.

RANDALL: When we went through the recession we really learned how to get lean with our company and to make sure our decisions were the right decisions. We learned how to implement programs for our customers through the recession. We looked at our complete vendor list to make sure we had the right partners, as well. I would say we operate under the premise that this could happen again at any time and we need to be prepared for it and not caught off guard like I think a lot of us were.

TURQUOISE ROOM

VENEROSO: We learned from [this morning’s] presentation that on paper we should expect a rollback from the Obama administration’s aggressively regulated approach to the industry and also, of course, a rollback of enforcement. However, saying it is one thing, but actually doing it will take a little bit more effort. Certainly in terms of regulation and enforcement of regulations, on paper this administration should be more favorable for the industry.

Everybody in our industry has their eyes pointed to who’s going to be the next assistant secretary that will run MSHA. We learned earlier that the new MSHA candidate could come from the industry, which is good news. The industry would prefer to work with people who are competent. The worst thing is to work with people who are incompetent, and who are not even from the industry. That makes it impossible because you are talking two different languages. So, hopefully, the fact that we should have an MSHA candidate coming from the industry with experience is definitely favorable to our industry.

Another big thing is the demand for concrete. It’s very positive. Concrete is experiencing a 4 percent growth in the past few years. It’s going to continue to grow.
And then, of course, we have that big project on the border, right? The Mexican border. A lot of people are making a big deal of it, and it is a big deal. It is allegedly a $25 billion infrastructure project. However, in itself, the wall alone is not as big as the proposed infrastructure plan. In fact, the wall alone covers less than 2 percent or even less than 1 percent of the projected demand for concrete if the highway infrastructure plan moves forward.

GOETHEL: We’re going to migrate from an administration that focused on social issues to one that’s probably going to focus more on jobs. I absolutely believe they are going to invest in infrastructure. It could be quite significant. In certain areas where we operate, we have seen a significant increase in volume, but following this election, everybody has got a little spring in their step.

HEFFLEY: Following with what Dan [Goethel] is saying, I think right now everybody uses the term “the Trump effect,” and there’s a lot of positivity around it. After the first 100 days or so, we’ll get a chance to see how we actually get there. I, like Dan, agree that this is a great opportunity to see a lot of infrastructure spending. How Trump and the Republican Congress come together to find mechanisms to fund that is going to be interesting.

One of the takeaways from George [Reddin’s] talk is when he pointed out that we have some catching up to do in P3 opportunities. I’d certainly like to see that expanded upon, as well. I think there’s probably going to be more responsibility put on the states to come to the table. It will just be a matter of getting the funding behind it, but we’re very positive about it and expect a lot of good things.

ALEXANDER: I have not come across anybody who isn’t bullish about the new election, the new president coming in. Whether they like him or not. I know our investors weren’t particularly happy. We’re a $22 billion company based out of Miami and the Miami people were not happy with Trump getting elected. That being said, they’re also financially oriented and very, very excited about what’s going to happen within the industry over the next few years. We think that a lot of barriers are going to be broken down, and I think he’s dead serious about creating more jobs. Everybody knows the best way to do that is through construction projects and infrastructure building. So if you are reading the tea leaves, there’s nothing really in there that appears to be negative other than he’s unproven and you have to see what happens. But I think we’re going to see a lot of a positive impact for this industry.

McGEE: My sense is probably the same as the others. I see my customers having a renewed sense of optimism, probably greater than I’ve seen maybe in the last 20 years. They have a positive outlook on America. It’s kind of the American ethic, if you will, to kind of get in there and get things done.

On the border wall, I think the border wall is going to get bogged down in a political standoff – grandstanding. I think that in California, Governor Brown is already starting. He’s hiring Eric Holder’s firm to basically try to block or delay the wall. They’re already talking about using the Endangered Species Act to try to delay it or basically put a stumbling block on the wall.

So I’m less excited about the wall in and of itself other than it’s a nice political point to play with, and I think the politicians will take full advantage of using it as such. But the points on infrastructure for roads, highways, bridges, ports, airports – those sorts of things – I am fortunate enough to have a job where I travel the world quite a bit. And if the United States wants to stay a world leader, a world player, they have to invest. We have to invest in these things.

I mean, when you look at highways and our interstates that collapse into rivers … when you were growing up, did you think that would happen in America? And we’ve allowed our politicians to do this. And I think this election is basically the comeuppance where people have said enough; we need to take care of ourselves, too.

As far as getting the private sector involved, we don’t know exactly what’s going to happen yet, but that’s what President Trump has stated. We’re going to do it differently than the way we’ve done it in the past, and we’re going to try to mitigate the cost to the taxpayer by having these public/private partnerships and trying to see if we can do something different. It’s a refreshing change to have an administration that says, “Let’s figure out how we can do it,” rather than just saying, “No, we can’t do that.”

SMET: A follow-up question on the general optimism across board: I’d like to hear from the producers in the room. How do you think that’s going to affect your business? Do you think it’s going to put a strain on your business, or is there so much extra capacity that you have today that you say, “No, we’ll just produce more and sell more and we’ll all get rich,” or do you say, “No, we’re going to run into equipment problems, into raw material problems, into people problems”? Where do you think the strain is going to come in the business?

GOETHEL: I think the biggest impediment is going to be in the labor force: finding good-quality people to do the job and training individuals. Millennials, do you want to do this work? I think that’s the biggest impediment I see.

The second impediment I see is you’ve got the federal component from an infrastructure standpoint, and then you’ve got the states. How are the states going to manage that? How are they going to match funds and do whatever they have to do?

ALEXANDER: It’s hard to find good people. It’s hard to find good people in this industry that want to do this type of business. Millennials don’t have the same values and the same outlook as many of us who have been in the industry for a long time.

So, yeah, the labor force participation is very low, but the number of people who want to be involved in our industry is also very low. And so what do you have to do to attract the good talent? You have to make it a good workplace. You have to pay a very competitive rate, and those things are pretty simple, but it’s not easy to do.

The wage rate is an easy thing to fix, but having people feel some ownership and enjoy coming to work every day is a whole different issue. We have operations in many parts of the country, but if you take Texas, for example, which is heavily oil and gas dependent, the oil and gas market has been really off for the past couple of years. And now we’re starting to see a bit of a resurgence.

There’s a lot of optimism with the new president coming in and thinking that we’re going to tap into more of our resources. But, if we pay an average rate of $20, $25 and the oil industry is paying $45, it is really difficult for us to get people.

WHETSEL: I think as far as the producer is concerned, we’ve been holding back a lot of potential for the past several years. Things will begin to look up when your companies are able to actually commit to producing and being able to have that product available when the market is there and ready for it. One of the biggest keys will be eliminating a lot of the red tape that contractors have to go through. They’ll have more money to spend on concrete, asphalt and the labor.

HEFFLEY: Speaking of red tape, that’s one of the improvements we’ve seen in the state of Kentucky. Our Republican governor there who’s one year in has done a lot and actually created a formal program where you can go online and submit ideas and your thoughts on the reduction in regulations in the state. And now with a new Republican legislature in Kentucky, we’ve immediately seen the benefits of making it a right-to-work state just recently and also in some new prevailing wage laws. So I think when you start getting that kind of movement in state legislatures, as well working with what we anticipate on the federal level, it should all be positive for moving this thing in the right direction.

TOPIC: The [president] has promised the building of a wall between the U.S. and Mexico, as well as the possible deportation of illegals. What kind of effect might this have on the industry’s labor pool? What strategies does your company have for finding and keeping qualified employees?

TURQUOISE ROOM

DANNER: The wall is not really an issue for us … the labor pool, the migrant workers. As, you know, most of the larger companies know who are going to do business with them, they have to follow all policies. So most of the big producers, legit producers, aren’t hiring any illegal immigrants anyway. So if they’re going to come, they’re going to come legally. So whether there’s a wall or not, they’re coming the right way. So that’s not going to impact our labor pool.

There are probably some smaller producers that don’t honor those rules and regulations and certainly pick up day laborers and that kind of stuff. They don’t really follow all of the MSHA rules either.

We’ve created a culture now where you are not perceived as good enough unless you are the boss. I say this as a young boss myself. It’s an upside-down funnel. There’s only one president of the company. There’s only one president of the United States, but everybody wants to be that one guy. And we’ve kind of diminished the value of getting a job right out of high school and providing for your family. That goes back to the late ’60s, early ’70s, when the man was the breadwinner.

It doesn’t have to be that way these days, but most families are dual-income families who are struggling to survive. We see college expenses going through the roof. They’re trying to pay for that education. For the older generation, if you came out of high school and you got a job, that was good. If you went to college, that was probably a little bit better and you’d probably be the manager.

But for guys in my generation, if you don’t have a college degree, you’re pretty much not going to be the boss. Now everybody has their college degree. You need to have an MBA if you want to be the manager, right? The college guys out there are just doing basic work these days, and now we’re starting to see that everybody has an MBA. So now you’ve got to go another step. So you need a Ph.D. to be the boss, but then where does the experience come into play?

So I’m hoping we’ll see with the increase in higher-education costs and too many people at the top, that the bottom end comes back into play … where you can come out of high school and you can get a job as a tradesman, electrician, journeyman or whatever, making $20, $30 an hour.

As far as what we’re trying to do to attract talent, we started an internship program. Not that that’s a new tactic by any means, but it’s a tactic we’ve brought down to the high school level where obviously you have to be of legal working age, but in the summer between classes, if you want to come work for us and drive a truck or get on the shovel, whatever, learn a little bit about the industry and see what you can do, it’s a good way to get them in.

We’ve tackled many tech schools and vocational schools back home looking for welders and electricians that have some classes but also have some free time that are looking to support their career. So I guess it’s a little more like an apprenticeship program, kind of following what the European countries are doing quite well.

ROBINSON: I agree with a lot of what he’s saying. We’re similar in the fact that the verification process is so stringent that we’re comfortable and competent we’re hiring legal employees. As far as this generation, the youth, most of the kids know the best avenue is going toward college and getting a degree. I came from being a maintenance millwright in Cemex, then came through a developmental, journeyman-type apprenticeship program. I hire by empowering a young person and investing in him and training, not just with the training that’s local to the site with your foreman, supervisor, whoever it may be, but outsourcing to your suppliers, vendors, Caterpillar, whoever it may be to get them credentials.

When you empower them, it gives them a sense of worth. They feel like they’re progressing. They’ve got a goal to reach.

We’re at market value for hourly rate, being competitive with benefits and everything else. For us, what’s worked on the ones that we have retained is giving them a sense of empowerment that we’re investing in them, even though in their mind they think they’re going to get a $30-an-hour job and they may start out at $18 or $20.

So our tool at our location has been to empower them and truly make sure that they feel an integral part of the team; that they’re a contributor; that when they leave, it does impact us and we want to invest in them.

MELLOTT: We’ve seen a very similar thing. The skilled labor pool is shrinking and it’s aging. So we’ve done a lot of different things. We actually just recently started a journeyman program, and we teamed up with the local vocational schools in what we call Mellott University. It’s a nine-month program that they’ll go through, and it will cover everything from lubrication systems to electrical to applications.

And they go through this whole process, and a lot of our retirees that have all of that knowledge are the actual instructors for these courses. And finding people in the first place was kind of tough because they’re especially younger people. So we advertised positions on social media, like Facebook. And we get a lot of people coming in from Facebook. It’s linked to our online application process.

HEFFLEY: About 18 months ago we started a two-year apprenticeship program on our mobile equipment side. It’s a process in which they have classroom training in our new training center, then they go out into the field for a few months and then come back in and do more. So it’s in and out and it’s over a two-year period, and that’s really been successful. In order to try to find people for that, we hired a full-time recruiter in house that just seeks out people to join that program. So it’s been very successful, and we see it continuing to go on and grow.

VENEROSO: I think there has been a lot of advancement in this industry and it requires a brain. It is not simple work. So we are attempting to market this industry as an intricate and interesting one. So if a young guy wants a challenge or wants to be more in tune with electronic innovations and so on, certainly this is the industry to be in.

ALEXANDER: I’d like to make one comment about the wall. I don’t have any doubt that it’s going to happen. From our personal perspective it’s going to make us more competitive. We have a lot of operations in south Texas where we do everything right as far as getting our permits. We make sure we don’t hire anybody that shouldn’t be in the country, and there’s a cost that comes with that. If we’ve got to pay the prevailing rate of $18 to $20 an hour and our competitor, because they’re not being regulated and know they can get away with it, pays $6 an hour, we can’t win jobs. So as that gets cleaned up, which I hope it does, our profits should increase.

DANNER: One thing we’re starting to see is other industries offering younger people telecommuting, flexible hours, pick your own schedule. It’s going to be fun to see how we compete with that. If Facebook hires somebody right out of college and that person says, “Hey, you know, I really want to come into work at noon and I want to work till 10 o’clock at night,” Facebook says, “Great, do it.”

With us, we tell them, “You’ve got to be there at 5:00 in the morning or 6:00 in the morning.” You can’t have your haul truck driver working a different schedule from your front-end loader guy. And then there’s telecommuting. We can’t quite let you run the front-end loader from your computer at home, at least not in this day and age. Maybe in the future. But these are some of the fringe benefits that other industries are able to offer and that are somewhat becoming the norm. It’s going to be hard for us to compete with that.

CADWALADER: They call that the Google Effect in California. It started all of that, “Come in when you want and work late, and you can go down to the gym right here on campus for a while…” So it ruined the workforce.

GOETHEL: The industry is going to have to adapt to the millennials versus in the prior generations, the generations adapted to the industry and what the job was. We’re faced with those challenges. I break it down into two categories: You’ve got professional people who we are trying to hire, our engineers and so on and so forth, and you’ve got your laborers, operators. And what I see is a big gap between those on the professional side that have the degrees, MBAs, and those that are the operators.

And so we’ve got to figure out what a trade school can do for us to get both of those guys connected, both areas connected. And the industry is not glamorous. We work a lot of hours. Somehow we’ve got to figure that out and get the millennials to come to us.

FRANCELJ: One of our successes has been to go with former military personnel. We really focused on the recruitment of them. They have a good work ethic [and are accustomed] to working in the early mornings. We’ve had a lot of success in retaining those employees in our industry because of the ability to develop them into managers. So I definitely recommend that producers and other companies hire from the military.

MARKLE: As a millennial myself, I can tell you a little bit about what excited me about the industry. That might be helpful to give you guys an idea of what people look for. I came from an engineering background, so I can’t really speak for the labor force, but I can tell you something that really drew me to the company I work for now is the fact that they did seem very modern in terms of their approach to problems. And I learned about all the issues that our customers had and how we solve them.
So if you expose yourselves and say, “These are the problems we encounter on a daily basis and these are the creative solutions we put forward to answer those issues,” I think that’s something that really excites engineers that are younger.

MELLOTT: We’re going on our third round of [the nine-month program]. Every day they do two hours in the class and then two hours of actual hands-on out with the service techs and with the quarry operators. And so it gives them that kind of knowledge of exactly what this job is going to be like.

And then at the end of this nine-month period, if they pass, we have the option to extend them an opportunity to work for us. And we have a 100 percent retention rate so far in the past two years.

GOETHEL: Is this a paid position when they enter into the university?

MELLOTT: It is. Yes.

GOETHEL: So you pay them? You actually employ them while they’re doing that?

MELLOTT: Yes.

GOETHEL: That’s a big commitment.

MELLOTT: Exactly. It’s a big investment. It’s a big commitment for sure, and we also have designated staff for the university.

DANNER: To Justin’s point, you’re in this class. You’ve got some classroom instruction. You have some hands-on. So you get that interaction. And everything we read about millennials, they want to feel involved. They want to feel like they have input.

TOPAZ ROOM

GARRISON: We struggle to get new people into the industry from both sides (manufacturers and producers). It’s very difficult, because people don’t even know that this is an industry and they don’t realize the size of it. As far as getting people in, we work really closely with colleges across the Midwest. We go there. We explain the industry. We explain our products. We try to get people interested in it. And it really lends itself in the Midwest because a lot of the young engineers coming out of school grow up on farms and don’t mind getting dirty. We work pretty close with colleges to bring young folks into the industry, but we’re always looking to bring new people in. Really, the trick for keeping them in is getting people in the right spot in a job that they like to do, something they’re excited and passionate about. It helps a lot. Then, it’s giving them an opportunity to move forward. At a lot of companies, you get in and you’re kind of stuck doing what you’re doing for the next 20 years. People want to come into a company that, on the front end, is telling you there is a lot of opportunity for growth; and that there are divisions so you can move from engineering to product management to other fields.

MORAN: A lot of the engineers who come through Silicon Valley are foreign. They work on H-1B visas, or they’re attempting to gain residency in the United States with a green card. I know U.S. skilled workers have been tough to recruit for a lot of companies in the area, especially with the new Trump administration and the uncertainty on how they’re going to handle policy regarding skilled workers who are coming into the nation. It’s a challenge for unskilled labor, as well as for skilled labor across the country. It’s definitely affecting the way we recruit.

HANNON: We usually put a lot of emphasis on finding those with college degrees. There’s also a huge demand within our business for those who don’t have one. Oftentimes you go and listen to the school counselor, you get to a college and it’s all about the high-end jobs where you can make a lot of money and you don’t have to work hard. Really, in our industry, we need a whole group of people that want to make a good wage but are willing to work hard. And they don’t have to have a special title to be able to do it. We’ve also been trying to take a look at high schools. A person who wants to have a family and make a good living but may not be going to the next level in schooling has an opportunity to have a great career in the aggregate/ready-mix industry.

YANIK: How important is it to be proactive to find these employees?

HANNON: If you take a relaxed approach what you get is a much smaller talent pool. Right? So I think being proactive, reaching out, trying to show what the industry offers and the potential for careers, you find those who really do want to have a career and make a life within the industry.

CLARKE: As a company, we’ve had to change our policy with regard to how we recruit people. Before, it was just a matter of bringing graduates in or bringing guys out of diesel college in and training them up and putting them in the field. We find the millennial wants to progress. He doesn’t want to come in and be a laborer for the rest of his life. He doesn’t want to come in and turn wrenches for the rest of his life. He wants to have certain levels of achievement as he goes through. We’ve actually had a study done on this internally. We’re trying to figure out what’s our best approach and plan to try and make it bigger and better for us. Now, we’re in the process of trying to restructure our internal organization so when these kids come in – whether they’re from diesel college or wherever they’re coming from – there’s a program for them, a structured program, and a development program within the organization.

YANIK: How do others here deal with the prospect of employing the next generation?

CRAVEN: People want a purpose. People want to know the purpose of what they’re doing and the impact they’re making on the world around us. And there are very few industries where you can make as big and as positive an impact on the world around you as this one. If you look at the positive impact you have on the infrastructure that surrounds us, the skills that teach us, the hospitals that look after us, the roads that get us from A to B, all that stuff comes from this industry. The number of new people we have in our industry who come in and after a very short period of time say they never realized how dynamic this industry was is high. Before I came into the industry, the local quarry was just a big, dirty hole in the ground. And if somebody tried to tell me it was a very environmental industry and very safety conscious, you wouldn’t have believed it because the industry never did anything to tell me that. So that’s a failing on our part, I think. That’s something we can work together to address.

ROCCO: When I started in the business about 10 years ago, I never thought about where the material comes from. When I got involved in the business, maybe at that time it was just a job. Now it’s become a career for me. So I think it’s important to present the industry as an exciting potential career instead of just a job, because there’s huge potential for growth. The challenge for us on the East Coast is it’s very difficult to find people who want to work hard outside of the 9-to-5 mentality; people who want to apply themselves, work hard, build something in the business.

RANDALL: We have a partnership with the University of Toronto where we take their mining/engineering class each year and bring them into our company. We get to know them and show them that this business exists beyond the textbook they’re working from. And we’ve seen a real interest from some of these kids as a result.

YANIK: Once you find employees, retaining them is the next step. How do you ensure somebody sticks around?

McLAUGHLIN: We’ve implemented a career goal development [program] and we monitor it heavily. We work with our employees – new and existing – and show them how they can advance in their career. Get them in the door, bring them to your factories and show them you’re a good place to work. Let them talk to your employees and see that there are 20- and 30-year veterans there.

MORAN: I want to pose a question to some of the producers. There’s a trend emerging over the last 20, 30 years. Often, machines can do things cheaper and better than humans can. And so you have a wave of companies who are replacing human jobs with machines. How do you anticipate this trend will move forward as technology keeps up its pace?

HAWKRIDGE: Our workforce has gotten smaller. We are looking at ways to cut costs and be more efficient, but we’re also trying to determine which jobs add value and which jobs don’t necessarily add value. If we’re going to put somebody out there on the end of a shovel all day, what can we do to improve that situation? We are investing in plant automation that eliminates the plant operator who sits there and looks at a dial all day. I think the computer can run a plant better than a person can. A computer will push a plant to its maximum and then shut it off quicker if it thinks there’s a potential plug or stall situation, which, ultimately, makes the plant safer. We are investing and trying to make our workforce a little smaller. We’re usually re-deploying assets when we do that. We don’t want to send somebody home who’s worked for us for 20 years. But as our workforce gets older, maybe we transfer that guy to another plant to fill a position where somebody just retired, for example. We’re kind of using that as a way to help keep a stable workforce. Rather than try to get somebody through the door who we don’t know, we’re trying to move our existing employees around into spots where they can have more value.


Photos by Greg Dunivant

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