ISSUE 3 2023 S O U T H E A S T Merit Shop News from the Southeastern Michigan Chapter of Associated Builders & Contractors What’s Inside Is Your Company Prepared for the Future? Democrats Launch Revenge Tour Operation Workforce Recruitment
Contents ABC SEMI STAFF PRESIDENT/CEO Keith Ledbetter [email protected] DIRECTOR OF MEMBERSHIP John Manor [email protected] DIRECTOR OF SAFETY Drew Maltese [email protected] OPERATIONS MANAGER Michelle Wood [email protected] COMMUNICATIONS MANAGER Kelly Forrester [email protected] VP OF EDUCATION Deanna Morley [email protected] DIRECTOR OF EDUCATION Marissa Downs [email protected] DEPUTY DIRECTOR OF EDUCATION Grace Bonventre [email protected] EDUCATION SERVICES COORDINATOR Kaylee Cohen [email protected] COMPTROLLER Dave Staudt [email protected] 2023 BOARD OF DIRECTORS CHAIRWOMAN Christine Scott, Paul C Scott & Sons Plumbing, Inc. TREASURER Bridget Kewin, O’Donnell Electric, LLC SECRETARY Debbie Starke, LaFemina Trucking CHAPTER ATTORNEY Frank Mamat, Dinsmore & Shohl, LLP DIRECTORS Mark Angellotti, Expert Heating & Cooling Thomas Campbell, Campbell Industrial Contractors, Inc. Robert Clancy, Robert Clancy Contracting, Inc. Stacy Demers, AssuredPartners Frank DiPonio, DiPonio Contracting, Inc. Eric Flessland, Butzel Long Adam Harding, AIS Construction Equipment Corporation Chris Holsbeke Sr, Holsbeke Construction, Inc. Chris Maltese, D.J. Maltese Construction Corp. Brian Misaras, Merlo Construction Byron Muonio, State Electric Company David Schoonbeck, CarbonSix Construction STATE BOARD MEMBERS Luke Beach, Independence Commercial Construction Robert Clancy, Robert Clancy Contracting, Inc. Frank Mamat, Dinsmore & Shohl, LLP Jim Struble, RCI Electric NATIONAL BOARD MEMBERS Robert Clancy, Robert Clancy Contracting, Inc. Chris Maltese, D.J. Maltese Construction Corp. Christine Scott, Paul C Scott & Sons Plumbing, Inc. CET BOARD OF TRUSTEES CHAIRMAN Tad Martin, TMX Contracting TREASURER Jim Struble, RCI Electric MEMBERS Andy Barnum, Lee Industrial Contracting Sean Fisher, Third Coast Electric Paige Levy, Douglas Electric Co. Jeff Campbell, Campbell Industrial Contractors, Inc. 04 12 03 President’s Letter 04 You Can’t Have a Highland Without The Summit 06 ABC Member Helps Bring Upscale Apartments to Royal Oak 08 Democrats Launch ‘Revenge Tour’ 10 Michigan Company Expands Services and Ventures into Recycling and Reselling Aggregate 12 A Day of Prayer Turned to a Day of Connection 15 Arrow Concrete Cutting Hits ABC Milestone 16 Associate Members Form Resource Group to Support Chapter 18 Equal Family Business Ownership 22 You’re Having Talent Problems in Your Company. Are You to Blame? 24 Record Number of Students Graduate from Trade School 26 Operation Workforce Recruitment 28 Upcoming Events Advertising & Design Sales Representative Ronnie Jacko (503) 445-2234 [email protected] LLM PUBLICATIONS (503) 445-2220 | (800) 647-1511 www.llmpubs.com 26 Contact Information SEMCA Office (248) 298-3600 31800 Sherman Avenue Madison Heights, MI 48071 ABC SEMI Office (248) 298-3600 31800 Sherman Avenue Madison Heights, MI 48071
2 Associated Builders and Contractors, Inc.
Southeast Michigan Contractors Issue 3 2023 3 Keith Ledbetter | ABC SEMI PRESIDENT/CEO President’s Letter Follow the money. Last election cycle, the 10 largest Michigan labor unions contributed over $5 million dollars to state Democrat coffers and now that influence is manifesting itself throughout the legislative process. The labor unions are contributing huge financial resources designed to hurt your company. It’s working. What are you doing to help? Sincerely, Keith Ledbetter | President and CEO ABC Southeastern Michigan Chapter IT’S TIME FOR YOU TO HELP!
4 Associated Builders and Contractors, Inc. PROFILE You Can’t Have a Highland Without The Summit The Summit Company Completes High-End Custom Build for Local Community The Summit Company has always let their faith guide them in how they conduct their business. So, it is no surprise that a little “divine intervention” led them to their most recent and ambitious project—The Highland Township Municipal Building. “We were nearing completion on our previous project and really did not see anything on the immediate horizon,” said Tony Dattilio, President of The Summit Company. “I admit I prayed a bit and gave our architect a call to see what his thoughts were. That is when I heard about the Highland Township project.” The multi-million-dollar project involved extensive renovation and expansion to the Highland Township offices and Activity Center. The resulting new look of the building truly captured the community’s spirit while offering state-of-the-art office space and public auditorium for local meetings. “This is by far one of our largest, most ambitious project for Summit to date,” (left to right) Summit project manager, Dennis Evans; Highland Township supervisor, Rick Hamill; and Summit Company president, Tony Datillio stand in front of the finished building. said Dattilio of the seven-million-dollar Highland Township renovation project. “The fit and finish of this project was amazing and gives it a very local feel, with attention to quality and durability. Everything was planned with great attention to detail but also built to last.” Dattilio mentioned the exterior sheeting by way of an example of meeting both aesthetic and durability needs of the project. “We used a solid composite board made primarily of plastic that was stained by Canadian Company, Wood Tones, to mimic stained wood, yet will not rot or weather like it’s lumber alternative,” said Dattilio. “This will dramatically limit the need for exterior upkeep like painting or replacement—that will continue to look amazing for generations.” According to Dattilio, the architect, Lindhout Associates Architects, deserves most of the credit for designing a flawless project. He also credits the tenacious oversite and input of their client through Highland Supervisor Rick Hamill. It was his continued involvement that made the project a true reflection of Highland Township. “This new building will carry the township 50 years into the future and will include cost saving technology to benefit our residents,” said Hamill. “I am proud that we were able to incorporate so much rich history into the design and still feature the latest in technology for our staff to perform their jobs more effectively and efficiently.” The Highland Township Hall was originally built on John Street in 1953 and had The interior of the public entrance to city hall. Framework for the new building is done during the winter.
Southeast Michigan Contractors Issue 3 2023 5 PROFILE served the growing community for 68 years. The Activity Center was added in the 1980s. But soon it became apparent that the Township was in need of more space and additional technology to better serve their community. “We had the resources to pay for the project in full,” said Hamill. “That is probably unusual for many local municipalities, but we had been planning for this eventuality for a while and knew that we would need a new facility to better serve the needs of our constituents. I am proud we were able to do this without raising any additional taxes.” With a township population of 4,000 when the original hall was built in the early 50s, Highland had found itself at nearly 20,000 residents in 2022 and the offices have not expanded significantly. It was time to bring the facilities up to date. During the renovation, Hamill and his team did not miss a beat providing all township services by phone, online or in-person in their temporary “shacks.” The temporary office complex was the brainchild of Hamill, who realized not everything could be done online or via phone. “We bought a number of temporary garden sheds to house several employees during public hours,” said Hamill. “Most were by appointment, and on occasion it was chilly, but served the need to meet and conduct business until our new township hall could be utilized. Truthfully, some of our staff miss those shacks,” he joked. Dattilio is proud of his team and their ability to work with a number of ABC contractors, such as Douglas Electric and Multi Drywall Partition on this project. He firmly believes in working with companies that embrace the merit shop philosophy. “There is a confidence in working with fellow member companies,” Dattilio said. “You have an expectation of excellence and know these companies have been vetted by ABC and embrace the same values you do. A level playing field for everyone where you are judged by the quality and value of your work—who could ask for more.” The completed Highland Township City Hall. The exterior begins to take shape as masonry work nears completion. The old Highland Township City Hall building before demolition begins. The roof, windows and Hardie composite siding get added to the exterior. Highland Township city council has a new place to hold town hall meetings.
6 Associated Builders and Contractors, Inc. PROFILE ABC Member Helps Bring Upscale Apartments to Royal Oak Hazelton Apartments Connects Luxury Living to Royal Oak When Trowbridge Homes wanted to build a multi-story building project in Royal Oak, MI, a call was made to Ronnisch Construction to help manage the build. Trowbridge partnered with local Royal Oak architect, Krieger Klatt to create the A view of downtown Royal Oak from a 4th floor apartment. extravagant design, and together, all three companies got to work. This luxury 5-story, 69-unit complex with zero lot lines will feature a two-level below grade parking area and top of the line apartment amenities. According to Armen Derderian, project manager for Ronnisch Construction Group, it really shows the scope and quality of work that they are capable of. “This project really makes sense for the community it is located in,” said Derderian. “In a city where parking is premium, building a 69-unit apartment building with underground parking is a must. The common areas will feature multiple use for residents and the swimming pool will be a welcome recreation for those living here.” In addition, the proximity to downtown will put everything within walking distance for residents to enjoy. There is no sparing of cost on the finishes for the building and each unit will be 1400 sq feet with ten 5th floor ‘penthouse’ apartments coming in at 1700 sq feet. The project will feature many unique amenities for the guests living at Hazelton Apartments. There will be a 6th floor exterior bar and patio area with a fire pit under a pergola. In addition, a business center, and fitness and yoga rooms will be featured on the 3rd floor. Also, a game area, lounge and kitchen will be on the 2nd floor. “Our partners really put a lot of thought into the design to ensure that residents have access to many of the necessities and amenities that they need for both work and play,” said Bernie Ronnisch, president of Ronnisch Construction Group. “We love getting our hands on elaborate projects Armen Derdian and Mike stand in front of the soonto-be-complete apartment building.
Southeast Michigan Contractors Issue 3 2023 7 PROFILE Armen Derdian and Mike, from Ronnisch give ABC director of membership John a tour of the apartment building. The concrete has been poured for the 2nd story pool. Framing is lowered onto the 5th floor by crane. A rendered vision of the residents’ lounge on the 2nd floor. A rendering of what the outside of the building will look like. like this with a lot of details. Our team thrives with the leadership and expertise to be able to execute Trowbridge and Krieger Klatt’s vision.” The location of the project is really one of the biggest selling points for residents. With such an advantageous and desirable location, The Hazelton provides opportunities for tenants to live, work and play in one of the most vibrant locations in Metropolitan Detroit. “Klatt’s design spares no cost, providing impressive finishes and resort quality amenities throughout. Each apartment home will exceed your expectations,” admits Derderian. “Located in the heart of downtown Royal Oak, this project not only offers an amazing home, but a vibrant new lifestyle that puts you in the middle of the action. I will not be surprised in the least if all of these are taken before the paint even dries on the project.” Ronnisch Construction is headquartered in Royal Oak with an office in Detroit. To get in touch with them, or learn more about their other projects, visit www.Ronnisch.com.
8 Associated Builders and Contractors, Inc. REVENGE TOUR After state Democrats took control of Michigan state government for the first time in 40 years, labor unions controlled the agenda for the first several months of the year, with more pro-union legislation on the way. Labeling businesses as “exploitive” in House legislative committee, Democrats sought to rectify what they see as an imbalance of power between businesses and workers they believe are being taken advantage of. While Right to Work and Prevailing Wage were among two of the most notable changes so far, other union-friendly policies currently being developed are likely to have an even more dramatic impact on Michigan’s economy. California-inspired independent contractor legislation (HB 4390) includes troubling changes to force many new workers to become direct employees. The changes are so sweeping that even Uber drivers and Instacart shoppers could be re-characterized as direct employees. Such new policies would threaten the existence of these emerging technology services, while also harming the construction industry accustomed to outsourcing work to subcontractors. The legislation would also impact companies that share employees with other contractors when supplement their manpower during busy times or try to avoid layoffs during slower periods. Democrats label the use of independent contractors as “payroll fraud,” proposing stiff new criminal penalties and blacklisting for even inadvertent mistakes. House Bills (4399-4401) would ban non-compete agreements. More importantly, the legislative package would require employers to disclose compensation levels of each employee to their work colleagues who are “similarly-situated employees.” Being forced to disclose wage rates of all employees within a company will, by design, lead to jealousy and hostility within the workplace among coworkers. Employers who hire temporary employees through various employment agencies like Tradesman, Aerotek or Kelly Services would be punished under House Bill 4034. The legislation discourages the use of temporary workers, proponents claiming every temporary worker is stealing the job of a full-time worker. State Democrats Launch ‘Revenge Tour’ Progressive causes, labor unions lead anti-business push
Southeast Michigan Contractors Issue 3 2023 9 REVENGE TOUR The legislation requires employers to submit the names and contact information of all temporary workers to other workers on site. This would allow union salts to collect the names and contact information of fellow employees for recruitment or harassment purposes. Temporary worker employment records would be required to be reported to the state, where supervisors previously working for labor unions would get access to employer and employee information. The bill would also prohibit a temporary worker from being sent to a jobsite where a strike is occurring. Restrictions to hiring replacement workers have already been ruled unconstitutional by the United States Supreme Court. The bill would also require the agency to attempt to permanently place laborer in permanent position of the client if client intends to make a permanent hire. The proposed repeal of ABC-inspired legislation called the Fair and Open Competition Act, would allow local units of governments to set prevailing wage rates and force contractors to be party to a Project Labor Agreement in order to do local government work. PLAs often require non-signatory contractors to either adopt union-style training programs or pay into union fringe benefit funds that their own employees wouldn’t qualify for in order to win the construction contracts. Part of the PLA reforms would include requirements for all state contractor laborers to be enrolled in federally-approved apprenticeship programs. Because few non-union trades even have these programs currently available, state highway contracts and municipal infrastructure projects could quickly become union-only. ABC’s trade school in southeast Michigan, SEMCA, would try to create new options to provide DOL-approved training programs for contractors where possible, but the new requirements would create onerous burdens on contractors to take workers out of the field and enroll employees in new formalized training programs. Anti-Business State Legislation At a Glance » Repeal of the Fair and Open Competition Act would force contractors to sign Project Labor Agreements and force many laborers into DOL registered apprenticeship programs that aren’t currently available. » HB 4034 would require significant new reporting requirements and restrictions of temporary workers. » HB 4237 repeals a 2015 law that prohibited local governments from requiring special pay or benefit requirements (local minimum wages) on businesses. » The “Clean Energy Future Plan” requires utilities to shut down all coal-fired plants by 2030 and be carbon free by 2035, despite the lack of available technology to do so. » Independent contractor legislation (HB 4390) would force many subcontractors to become direct employees. » House Bills (4399-4401) would ban non-compete agreements and would require employers to disclose compensation information to coworkers. » Temporary worker hiring would be restricted under House Bill 4034, requiring onerous state reporting requirements. Look up bills and legislative analyses here: ABC Michigan president, Shane Hernandez speaks to the State House on June 22, 2023.
10 Associated Builders and Contractors, Inc. HEADER Since its establishment in 1954, M.L. Chartier, a reputable Michigan-based excavation company, has been a trusted provider of excavation and environmental services throughout the state. Over the years, the company has flourished, with five locations throughout Michigan, diversifying its offerings to meet the evolving needs of its clientele. With a strong commitment to excellence and innovation, M.L. Chartier has recently expanded its range of services, including the introduction of a new venture in 2023: recycling aggregate. M.L. CHARTIER Michigan Company Expands Services and Ventures into Recycling and Reselling Aggregate “This new service allows us to make full circle with the current services provided, by supplying all aggregate needs on their various jobsites,” said Travis Knappins, Business Development Manager at M.L. Chartier. With an aim to provide comprehensive solutions to its customers, M.L. Chartier has strategically expanded its services over the years. Initially specializing in environmental and excavation projects, the company has broadened its scope to include various sectors such as oil and gas, civil infrastructure, site development, hydro excavation, transportation, turnkey rentals, and now, aggregate recycling. Recognizing the importance of sustainable practices, M.L. Chartier has always embraced an environmentally conscious approach to its operations. The new recycling service is a testament to the company’s commitment to reduce waste and conserve our natural resources. The recycled aggregates are carefully processed and thoroughly inspected to ensure they meet the required standards. M.L. Chartier’s business development manager, Travis Knappins stands in front of M.L Chartier’s pride and joy, their clean equipment. M.L. Chartier moving top soil for the construction season. Trucks are being prepped for the season for smooth running. “We focus on every detail of the job so our customers don’t have to,” says Travis Knappins, Business Development Manager at M.L. Chartier. “This exciting new venture provides the opportunity to serve our clients with a more broadened scope.”
Southeast Michigan Contractors Issue 3 2023 11 HEADER M.L. CHARTIER “By recycling topsoil, screened millinstategs, fill dirt, crushed concrete and more, we’re able to remove clean materials from one jobsite and reuse it on another. By repurposing materials, we can offer cost-effective solutions to our customers looking for high-quality product and service,” said Knappins. With the introduction of the recycling aggregate service, M.L. Chartier has opened doors to a wider customer base with year-round service. The demand for eco-friendly practices and cost-effective solutions has been steadily growing, making this new venture a timely and strategic move. By broadening their services, M.L. Chartier can serve a diverse range of customers, including other contractors, builders, landscapers and homeowners, in addition to their current customer base who can benefit from the company’s expertise and other service offerings like transportation and environmental solutions. It’s fair to say that coming up on 70 years in business, M.L. Chartier has stood the test of time but also thrived in the industry. The company’s growth and success M.L. Chartier’s equipment working in the yard. A close-up on the new concrete crusher in the yard at M.L. M.L.’s trucks are lined up ready to haul away aggregate. M.L. has a team on hand to paint their equipment to uphold their high standards. can be attributed to its commitment to safety, innovation and environmental responsibility. “We focus on every detail of the job so our customers don’t have to,” says Travis Knappins, Business Development Manager at M.L. Chartier. “This exciting new venture provides the opportunity to serve our clients with a more broadened scope.” To learn more about M.L. Chartier visit www.mlchartier.com.
12 Associated Builders and Contractors, Inc. “I have been a devout Christian all my life,” said Tad Martin, owner of TMX Contracting. “Gathering for an early morning breakfast at ABC and breaking bread with people of the same beliefs, values and morals is an inspiring start to my day.” On a very early morning in May, ABC staff rushed to the Freedom Room before the sun had even begun to shine to get breakfast cooking for the National Day of Prayer Breakfast. Bacon, eggs and pancakes were laid out for hungry construction workers seeking enlightenment before their day. ABC president and CEO, Keith Ledbetter knew he wanted two things out of this breakfast. The first was to have an open place for ABC members to celebrate their faith and the second was for the Freedom Room to smell like bacon for five days. The event fulfilled both wishes. The National Day of Prayer is an annual observance held on the first Thursday of May. It was created in 1952 by a joint resolution of the United States Congress and signed into law A Day of Prayer Turned to a Day of Connection ABC Members feel a sense of belonging at the first Prayer Breakfast Keith Ledbetter welcomes guests to a faithful morning. PRAYER BREAKFAST Tad Martin leads members through prayer before adjourning.
Southeast Michigan Contractors Issue 3 2023 13 by President Harry S. Truman. The day exists to mobilize the Christian community to pray for America’s national, state and local leaders. With all the current day challenges facing our industry and our country, ABC SEMI is providing an opportunity for people of faith to come together to take part in this occasion in our own unique way. ABC members who attended enjoyed the ability to connect on deeper grounds. Evan Gaertner, senior pastor at Our Shepherd Lutheran Church led them through a prayer workshop, designed to give everyone a deeper understanding of the meaning of prayer. Tony Datillio, president of The Summit Company felt a great connection to his faith and those around him at the end of the event. “I pray a lot for myself, my family, the business and it’s led me through some difficult times. After COVID, we were searching for business and I turned to prayer, which helped lead us to some remarkable projects to work on,” Datillio said. “I feel a lot of people in this room today often do what I do. It was refreshing to come together and pray for the construction industry.” We want to thank our sponsors: Diamond Shine Concrete, Lighthouse Group, TMX Contracting and The Summit Company. The National Day of Prayer Breakfast will be back next year on May 2, 2024. Full tables inside the ABC Freedom Room for the Prayer Breakfast. Pastor Gaertner leads members through the prayer workshop. ABC president and CEO, Keith Ledbetter welcomes ABC members. PRAYER BREAKFAST Folks from The Summit Company, TMX Contracting and Diamond Shine Concrete enjoying breakfast together.
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Southeast Michigan Contractors Issue 3 2023 15 ARROW CONCRETE 40 YEAR Arrow Concrete Cutting Hits ABC Milestone A Company That’s a Cut Above Excellence In the 1980s, payphones lined the streets and local diners, 300-page phonebooks were how you found people, we watched music videos on MTV, hair styles reached new levels and a family-owned concrete business opened in Monroe. Arrow Concrete wasted no time getting involved in local organizations. Shortly after opening their doors, ABC was one of the groups they joined. They were eager to start making a name for themselves Arrow Concrete Cutting President Scott Gedelian stands with their ABC 40th anniversary eagle. We are honored to have had this hard-working company be a part of our membership and look forward to what 40 more years bring. and knew that associations were a beneficial way to network. Owner and president, Scott Gedelian knew if he wanted to put an emphasis on the high-quality level of service they provided, he needed to affiliate his business with owners who had the same goal. ABC was that place. Since then, Arrow Concrete has expanded their business to provide concrete and asphalt sawing and diamond core drilling. We are honored to have had this hard-working company be a part of our membership and look forward to what 40 more years bring. Arrow Concrete provides high-quality concrete cutting services throughout Monroe County. To learn more about the company, visit concretecuttingmonroe.com and be sure to check out the honorable ABC message on the home page!
16 Associated Builders and Contractors, Inc. RESOURCE PARTNER GROUP Associate Members Form Resource Group to Support Chapter One member with a vision ignites momentum in southeastern Michigan A goal in 2023 for one ABC member was to find a way his company and the other associate members could band together to improve the chapter and provide more to local contractors of Southeast Michigan. Kevin Sheridan, director of business development at HRPro, had an idea to create the Resource Partner Group. A one-of-a-kind group where associate members of the Southeastern Michigan chapter could have monthly get-togethers and brainstorm ways they could be a better service to contractors. “I feel there is great potential between all the associate members to band together for ABC,” Sheridan said. “I wanted to connect everyone in this group with the mission to build trusted alliances and to foster professional relationships with the goals to better serve the general membership of ABC.” The group has seen 25% of ABC Southeastern Michigan associate members turn out to previous meetings, but are hopeful someday that number will reach 100%. “I see this group going far in regard to growth,” Sheridan said. “We hope to establish tiered levels of membership to have a Resource Partner Group sponsorship pool for ABC events. Not only are we making a difference in the chapter, but our individual companies are getting a nod at events as well.” Several other members have jumped on board with full support of this group including Jennifer Pinto, sales associate at American Solutions for Business. “I took a chance and came out to the very first meeting in January not fully sure what to expect,” Pinto said. “During that lunch, I made great connections with people who have been with this association for years. It was a great way to expand my circle of connections even more for my business, but also to learn more about the group I want to be a part of. We have a variety of unique businesses in this association and I’m glad to recommend them all.” The group meets monthly with a rotating breakfast, lunch and happy hour schedule. Each meeting is sponsored by a different member of the group and gets special recognition at the event. The next meeting will be in August in the ABC Freedom Room. To register for the event, visit abcsemi.org/events. If you are interested in sponsoring an RPG meeting, please reach out to Kevin Sheridan at [email protected].
Southeast Michigan Contractors Issue 3 2023 17 RESOURCE PARTNER GROUP We want to thank Kevin Sheridan for his dedication to ABC and taking the initiative to help us build it up. Kevin contributes a wealth of experience having held leadership roles in companies ranging from start-up to Fortune 100. Although his background has primarily centered around the automotive sector, he has extensive experience in the IT and high-tech arena and was an integral player in the advancement of modern-day email marketing and its best practices. His ability to identify industry trends and his knowledge of information systems along with both traditional and digital marketing strategies has allowed him to take a hands-on approach to develop business in emerging industries as well has help traditional businesses embrace the latest technologies and practices to stay competitive in a constantly evolving world. As a native of the greater Detroit area, Kevin studied at the University of Detroit Jesuit before earning a Bachelor of Arts from Wabash College which both trained him to think critically, act responsibly, lead effectively and live humanely.
18 Associated Builders and Contractors, Inc. EQUAL FAMILY BUSINESS OWNERSHIP Equal Family Business Ownership By: Jacqueline Kaltz-Coulombe
Southeast Michigan Contractors Issue 3 2023 19 EQUAL FAMILY BUSINESS OWNERSHIP Let’s face it, the transition of your business to the next generation cannot happen overnight. An estate plan, buysell agreements and stock certificates are not going to address all the family and business issues. It takes time and resources to create a well thought out exit plan that considers all aspects of your family and your business. An owner that is considering an exit within the next 3–5 years should start planning right now. Family transitions typically involve emotional and uncomfortable conversations. The kind of conversations that are typically avoided within families. Congratulations, you have decided to start planning the transition of your business to the next generation. But are you planning to give each child an equal percentage whether involved in the business or not? As owners (and parents) do you think you are doing what’s best for the family? Is it what is best for the business? Sometimes what seems equal is not fair. However, allowing yourself the time to work through these without the added pressures of short deadlines will help ensure the decisions made enable family harmony to continue and the business to prosper. It is extremely common, unfortunately, that business owners who want to pass their business to one or more of their children fail to develop a plan. More often, business owners try to develop a plan without first dealing with some of the difficult factors of a family business— the people, including both family members and employees. Also, owners fail to recognize that they are simply not ready to relinquish their ownership, control or involvement in the business, especially for those whose identity is tied to the business. The decisions and conversations that the senior, controlling owners have now, will help the next generation of family members understand why decisions were made and how to move into the future together. Thus, avoiding conflicts that typically arise when the senior family member(s) is no longer in control. When considering the overall exit strategy, it is important to consider and address options for family members that want or need to get out of the business. The reasons are unlimited, but the issue tends to revolve around money and their need for that money sooner rather than later. It could be an owner that needs to exit due to a divorce or an owner who wants to pursue another opportunity. When it comes to the next generation, owners often avoid or delay conversations to maintain control. Worst case scenario, the owners have avoided asking even the most basic questions about the business, such as: Do they want to be a part of the business? Do they want to work at the business? Do you want to be an owner? Not asking these questions can cause missed opportunities, lack of personal planning, or misunderstanding of what is expected within the business. It is important to have these conversations with all members of the family to have a clear understanding of the decisions and how it will affect all parties, especially those involved in the future operation of the business. Once these conversations are had with the family members, the owner can decide whether to bring in a family member or to promote a family member and how it may affect the other family members, employees and the business. The owner will need to answer many questions: Is the family member right for the job? How well does this family member know the employees and the business? Do they get it, want it and have the capacity to successfully run the business? How prepared is the family
20 Associated Builders and Contractors, Inc. EQUAL FAMILY BUSINESS OWNERSHIP member to take on the position and ownership—the good and the bad? The owner will also have to consider how this family member taking a position or being promoted, becoming an owner, will affect other family members both involved and not. How will it affect the owner’s relationship with this family member or the relationship of this family member with other siblings, aunts, uncles, and cousins? Smart owners will establish criteria for bringing family members into the business. Setting the ground rules for expectations and measurables. This is very valuable for situations where there are multiple owners, whether related or not. (Remember, there are other ways to provide (or make “equal”) for the owner’s children that are not involved in the business and will not be receiving interest in the business.) Clearly identifying the key position within the business, having clear job descriptions and establishing a method for tracking value-added and accountability, are highly recommended. Establishing clear rules and guidelines for accountability and reporting methods are equally important. This can be done by creating an organizational chart. Having this framework provides a governing hierarchy where all parties are clear on what they are responsible for as well as what others are responsible for. For example, you have two children and want to each give them an equal percentage of the business because this business has been your livelihood and you want both children to have the same opportunity for wealth. This scenario presents multiple problems among and beyond the many considerations we addressed above. It is common for owner(s) to want to pass on and provide wealth to the next generation. It is essential to the well-being of the business and the family for the owners considering passing this wealth by transferring equal percentages (or interest) to their children to stop avoiding these conversations. If one of the desired goals for the owner is to pass on wealth by giving equal percentage (or interest) through interest in the business, they should ask themselves the hard questions: Why do you feel each child should have equal amounts? Is this because you as the owner, and parents, have made a living off the business? Is it because each child is bringing equal value to the business? Is each child spending equal time on the business? Is the value each child is bringing different? Do the positions that each child will hold lead itself to equal responsibility? What about equal stress? Does each child have a similar understanding of the business, its needs, its product/services, its future goals? Does each child have a passion for the business? Will each child be able to meet the position’s job qualifications, duties and expectations as defined? If this child was not related to you, would they be a top candidate for the job? Would you pay them the same salary? If they are working for the business currently, are they meeting your expectations? Selecting the most qualified candidate to meet the goals of the business for its continued growth and success should be the owner’s primary goal. This should remain true even when the candidates are family members. It is paramount that owners consider the impact on the key employees when deciding which family members will be brought into the business and who will help run the business. Key employees drive your business forward. These key employees are accustomed to working with the existing owner(s) and respect their way of running the family business. Human nature, in general, fears change. The key employees may have concerns about their future security based on the decision you make. This concern is typically addressed if the framework discussed above is followed but we also recommend business owners create a training or mentoring program for family members. We suggest that this training/mentoring come from the key employees. This allows the key employees an opportunity to learn the skills and personality of the new family member. Another common solution is to create an advisory committee consisting of the key employees and get them involved in some of the exit planning and mentoring discussions. Most family businesses do not survive past the second generation. Why is that? Probably because the owner did not address the questions posed above and the most important element of future success—leadership. The success of your business is in large part connected to your employees. Having a plan for this transition and allowing the employees to have knowledge about that plan prevents this fear and insecurity in the future. The more comfortable they are with the next generation and with what the stages of the plan are, the more confident they are It is important to consider the effects these decisions will have on the business, your employees and other family members whether involved or not. It’s time to have the conversations and be realistic. Stop avoiding them. Take control of your future and start planning for yourself, the future of your family, and the business.
Southeast Michigan Contractors Issue 3 2023 21 EQUAL FAMILY BUSINESS OWNERSHIP likely to be in the future of the business. Thus, the owner should consider how the new ownership structure will affect the employees, and how the employee will react to the decisions. As the current owner, your employees are loyal, have worked alongside you and may even feel proud to work for the business because they attribute the business culture to you. Will employees have that same pride and loyalty with the next generation? Will they be proud to continue to work with and for those family members? Whether you as the owner want to confront these questions or not, the truth is, your employees are talking about it. Employees tend to believe there is a lack of leadership when owners are afraid to confront these issues. In the event owners make decisions without considering these issues, the employees may fear the future of the business and jump ship. Owners that have trouble retaining their key employees will generally lose the rest of the quality workforce. Now, the future of the business, its ability to take on work, make profits—is no longer looking good for anyone. Not for the exiting ownership, family members involved or not, and definitely not for the employees and family. Without the future profits of the business, the exiting owner’s goals will not likely be met. This will directly affect the owner’s retirement plans, maintaining current lifestyle, inheritance goals for both family members involved in the business and not, and the plans for the family’s future. So, before deciding to promote junior and/or transfer equal shares to all children (involved or not), deal with these questions. Otherwise, you may be asking yourself: “did my intent of being fair to the family, giving each child equal shares or promoting a family member, actually diminish the future value for everyone? Or even worse, will the business be able to survive?” The more owners the more likely different personalities, different opinions on what the business should be doing, where the business should go, how the business should operate and how much to distribute to ownerships. What about whether the family members get along or will in their future roles? What about how a child spending sleepless nights running the business may feel about sending distribution checks to family members not involved in the business (and likely these family members have little understanding of what the business does, its products/services, customers, employees, etc.). This presents many struggles for the family members that will continue to operate the business. Will resentment grow? Will the operating family member be able to manage all the personalities of the next generation? Is that what is best for the business? For the future of your legacy? The family members become even further disconnected from what is going on, where the business is going, or what the business needs. Yet, this does not mean these family members will not have an opinion. What made the family business so successful when the business first began was usually an all-hands-on deck philosophy. Everyone working for the same goal with the same vision. Yet, when the next generation comes of age, they may have different beliefs, passions or career goals. Most owners want to provide this option to their children, so why would you keep family members that are disconnected from the business as owners, potential leaders, and allow them to have a say on what the future of the business should be. This puts more pressure on the new family members coming into ownership to manage the whole family and that as President or CEO you are also responsible for ensuring the whole family harmony. This is business. Its purpose is to do what you love and make money doing it. Transferring equal shares to your children just because they are your children is not fair to the business. It is not fair to the family members that will continue to operate the business. It is not fair to your employees. Doing this will likely diminish the strength and growth of your business—and your legacy. In sum, the business has been your life’s work. And your work has been and will be a part of your family. A family legacy. Don’t you want to ensure it survives? To ensure family harmony for your retirement and the next generation. It is important to consider the effects these decisions will have on the business, your employees and other family members whether involved or not. It’s time to have the conversations and be realistic. Stop avoiding them. Take control of your future and start planning for yourself, the future of your family and the business.
22 Associated Builders and Contractors, Inc. WORKFORCE DEVELOPMENT You’re Having Talent Problems in Your Company. Are You to Blame? You can’t engage in a very long conversation with a construction company owner without inevitably hearing about their struggles recruiting and keeping good employees. They often complain about the lack of skilled job applicants and conclude this generation of young adults aren’t loyal and are not hard workers. But are these perceptions true or is this just grouching from the old get-off-my-lawn bosses? Recruiting Means More Than Posting a Job Online Many construction company owners suffer from unrealistic expectations. They believe posting an available position on Indeed will result in dozens of qualified and skilled applicants just dying to work for them. They assume that the most important function that will determine their business’ success—skilled talent—can be solved with a primitive passive approach. Consider legendary University of Alabama football coach Nick Saban. While his seven national championships are a natural and compelling tool to recruit blue chip players from across the country, Saban doesn’t assume that the best players will just show up at his door. He and his staff invest incredible time, energy and resources to identify the best players and convince them of why they should want to play for Alabama. Is your recruitment and hiring process a marketing and outreach effort designed to convince the best talent why they should want to join your team, or is it more like a shotgun approach of seeing who will show up when you post a $200 ad? The Best Talent May Not Be Skilled The best long-term employees are often those who have a great attitude and work ethic, yet may not have the immediate job skills. Those people are worth hiring. New employees are rarely plug-andplay. Expecting an abundance of perfectly-aligned skilled talent to walk in the door as soon as you need them is unrealistic. The best employee leaders are those who worked their way up your company ladder, gaining important skills and progressing in their careers within your company. Business owners who don’t have a progression plan for employees to take on additional leadership roles within your organization aren’t really an appealing landing spot for anyone but the least motivated workers. Many companies aren’t investing in their own employee training, but expect other businesses will train their future employees—that’s a poor success strategy. SEMCA instructor Kerrigan Pearce introduces welding students to the equipment. SEMCA carpentry student works with instructor Alex Joshua to get tools for framing.
Southeast Michigan Contractors Issue 3 2023 23 WORKFORCE DEVELOPMENT There’s nothing wrong with recruiting some members of your team from competitors. But if poaching is your primary strategy for building your company talent, chances are you might not be getting the best. If an employee is willing to leave a company who has invested in their training, loyalty may not be among their greatest traits. As soon as the next guy down the street offers more money, is your new employee going to leave you, too? A Quality Workforce Requires Training At SEMCA, we’ve witnessed companies paying their entry-level employees $15 an hour and then not contributing anything towards their training expenses. If the apprentice’s employer wasn’t an active investor in their development, why should the employee stay? They likely won’t. The company isn’t building trust and connection with employees, and then complain there is no loyalty when they leave for greener pastures. What Can You Do To Help Solve Your Skilled Labor Problems? You Should: » Recruit future employees from your network or social circle. » Look for prospective employees who have the right values—hard work and loyalty. Expect to train the proper skills. » Be intentional about investing in ongoing training and development at all levels of your organization. » Pay a fair and competitive wage. » Help employees understand the advantages of working for your company. » Develop your talent from within. Create a clear path of advancement for all employees. » Build personal relationships with your team members. Demonstrate genuine care and concern by understanding their personal needs and challenges. Electrical apprentices learn the foundation of Exothermic welding with Michael from Young and Champagne electric. SEMCA instructor Pete Higgins helps SEMCA student learn how to bend conduit. Year two electrical apprentices bend conduit with SEMCA instructor John Danic. SEMCA instructor Pete Higgins teaches year one electrical apprentices.
24 Associated Builders and Contractors, Inc. SEMCA GRADUATION Record Number of Students Graduate from Trade School On May 21, 107 students (69 electrical, 19 carpentry, 16 welding and three heavy construction) walked across the stage at Jimmy John’s field to receive “Today is a day of celebration and accomplishment. As we gather here to recognize the incredible achievements of each and every one of you. It’s an honor to stand here before you as we mark this significant milestone. The completion of your trade school education, and today we applaud your dedication, your hard work and your perseverance,” said SEMCA chair, Tad Martin in his commencement address to the graduates. their certificate of completion and enter the workforce as skilled trades professionals. Martin, owner of TMX Contracting, continued his address noting that the students sitting on the field, ready for their diplomas, spent hours perfecting their craft and leave SEMCA with the power to make a significant impact in their respective industries. SEMCA graduate Brian Bielski reflected on his four-year electrical apprenticeship, noting the challenges he had to overcome. Bielski said there was a lot more to becoming an electrician than he SEMCA 2023 graduates eagerly anticipate the moments before walking across the stage. Year four electrical students gather with their instructor Vince Cooley (middle/right) after the ceremony. Graduates await the moments before walking on the field. A packed Jimmy John’s stand to celebrate the graduates. Kristina Penix has a mini celebtration walking across the stage with her diploma in carpentry. Over 100 students enter the workforce as skilled professionals Trevor Barndollar gets a picture on the field with his diploma for completing his electrical apprenticeship.
Southeast Michigan Contractors Issue 3 2023 25 SEMCA FALL 2023 APPLICATION OPEN Eric Davidson, Patrice Rink and family accept an honorary degree for RJ Rink and the legacy he has at SEMCA. Fall 2023 Application Open The Southeast Michigan Construction Academy application is open for the fall 2023 semester. The school is providing training in electrical, carpentry, welding and heavy construction. Formal training programs are a great way to upskill your workforce—what’s better, all of SEMCA’s classes are at night, so you don’t lose workers during business hours. ABC members receive a discount on tuition and a 15% discount on tuition for seven or more employees enrolled. Additionally, ABC members looking to hire apprentices are encouraged to reach out to Kaylee (kcohen@ abcsemi.org), SEMCA’s education services coordinator to get on the jobs list. This list is a compilation of SEMCA students’ resumes from all trades seeking employment. It is emailed out twice a month to employers in an effort to fill the jobs available in the construction industry. Program information, training dates and curriculum can be found on semcaschool.org. The application for the fall semester will close on August 18. SEMCA students march down left-field at Jimmy John’s field to officially graduate. Tashas Tribble accepts her diploma in heavy construction from SEMCA chair Tad Martin. thought, but his grit and passion carried him through his training, and he can’t wait to get his certificate. “In this program I’ve accomplished and learned so much from my instructors—I’m ready to take this knowledge and become a journeyman electrician,” Bielski said. “After four years of hard work, I can finally give back to my community by helping maintain and grow the infrastructure.” This year’s graduation ceremony gave everyone 108 reasons to celebrate. One for each graduate and one for a family who turned tragedy into a legacy that will be passed on. Back in the fall of 2019 an eager RJ Rink enrolled in the electrical apprenticeship at SEMCA and within a month, he had a job working under a master electrician. Unfortunately, RJ passed unexpectedly two months into his first semester at SEMCA. RJ’s uncle, Eric, decided they would use RJ’s unused tuition and turn it into a scholarship to help other SEMCA students fulfill their dream. The scholarship was called The Promise Scholarship in Memory of RJ Rink. Since then, Eric and Amy Davidson, and the Rink family have given out $68,000 in scholarships that have helped 57 SEMCA students. This year would have been the year RJ graduated, and to honor the impact his family has made, they were presented with RJ’s honorary certificate of completion. The SEMCA class of 2023 now joins their peers as craft professionals ready to continue building America. Congratulations to all!
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