Ask a real football fan which National Football League (NFL) head coach holds the record for the most career wins and the name Don Shula comes up very quickly. In fact, he led the Miami Dolphins to the only perfect season in NFL history! Explaining his win record, he simply stated, “The one thing that I know is that you win with good people.” Years ago, I worked with a very smart turnaround manager who really knew how to get things done. In our meeting one day, he shared a secret he had been guarding for years. Being unsure of the response he would get, he spoke in a low tone with calculated rhythm when he said, “I only hire people who I believe are smarter than I am.” He was a consistently successful manager who understood your people are not the main thing; they are everything!
In turnarounds, there is good reason to pay careful attention to staffing as it must govern everything from your contracting strategies to the timing of your turnarounds and even most of your logistical decisions. For instance, an example of how staffing would drive contract strategy is you wouldn’t award a time and materials con-tract where you are directly responsible for the management of the project unless you have sufficient competent staff to oversee the work. When it comes to the timing of turnarounds, you wouldn’t jeopardize the quality of your turnarounds by stacking them in a time frame when you knew it would be overly difficult to get the workers. Neither would you staff up to levels above what your parking, transportation, tents or units can accommodate. The holes in your staffing plans are where a lot of the money leaks out.
Another area that should be considered is the ratio between direct and indirect employees. I have seen far too many projects where foremen had so little to do they were bored and lethargic. Often, supervisory personnel, who are listed as an indirect, will strap on tools and perform direct labor craft tasks for hours or days at a time, while still charging the supervisory rate.
Sometimes, project man-hours become heavier than necessary with a resulting heavier-than-necessary staffing plan because owners sometimes allow contractors to bring in and oversee their own planners. It has been my experience contractors generally do a fair job with their estimates and plans, but you have to admit no matter which contract type you are using, there is benefit to the contractor for the hours to be as generous as possible. If you want to keep a tight rein on staffing, you may want to allow a contractor to bring in his own planners only if the contract type is lump sum and you have a good review and approval process for the plans.
A topic that often surfaces in the staffing discussion is what the right mix is between embedded company employees and supplemental contract staff. Some advantages of using permanent employees include 1) permanent employees may, in some cases, have a certain degree of higher loyalty because of a sense of ownership, 2) they may develop more intimate knowledge of the facility, its personnel and practices since they typically are focused on only one facility and 3) owners have a better idea of who they are dealing with and what their skills, strengths and weaknesses are.
The advantages of using contract employees include 1) contract employees often have a broader perspective on best practices since they are being exposed to multiple companies and multiple sites, 2) they are often more specialized and more skilled than permanent employees, 3) they often work more productively than permanent employees since job retention and rehire are directly dependent on their consistent productivity, 4) they are often more flexible to change since they experience significant change with every new assignment, 5) most of their training costs typically came out of someone else’s budget, 6) they are not draining your payroll budget when you don’t need them and 7) it is so much easier to dismiss them if they are for any reason not a good fit. The debate no doubt will continue for years to come, but for now, companies seem to be trending toward having fewer permanent employees and supplementing more with contract employees regardless of whether you are discussing capital work, turnaround work or routine work.
For more information, contact Mike Bischoff at (281) 461-9340, email sales@tamanagement.com or visit www.tamanagement.com.
