Bovis Homes have issued an update for the end of 2017 showing a drop of around 10% in total completions compared to the previous year.
This was the company’s response to a peak of customer complaints and negative headlines at the end of 2016.
CEO, Greg Fitzgerald, was brought in to restore order and has focused the business on reducing stock on older sites and part exchange property and rebuilding Bovis’ reputation amongst buyers.
This has slowed the sales rate to under 0.5 per site per week and created a £10m exceptional items line in the annual accounts. The cost is attributable to restructuring, new operational procedures and investment into customer care.
Greg Fitzgerald, Bovis’ CEO, said
“The group had a very disciplined year-end and delivered against all of its financial and operational targets for 2017. There has been a step change in the quality of our homes delivered on completion and I’m pleased to see this reflected in our level of customer satisfaction which continues to improve.”
This is a good news story for the whole sector, not just Bovis. By taking a hit in both production levels and profit in order to address their build quality and customer care issues Bovis has the opportunity to rebuild their reputation amongst customers.
The kind of headlines that the company generated in early 2017 were every housebuilder’s nightmare and led to the CEO’s swift departure. However, any negativity about new builds making national news tarnishes the whole industry. Let’s hope this news begins to reverse that trend.
Persimmon CEO, Jeff Fairburn is about to get a bonus in shares valued at around £116m. He is not alone amongst Persimmon Executives about to get a huge windfall. Around 140 members of the senior management team will be sharing a pot of around £800m.
Is Fairburn’s bumper payday simply the bounty of five years of successful trading or an unintended consequence of an LTIP without a cap?
Given that the the Chairman of Persimmon first asked the CEO to donate some to charity and then resigned we can be sure Nicholas Wrigley knew the bonus would create some seriously negative PR.
His resignation followed that of Jonathan Davie, the Chair of the Remuneration Committee that failed to foresee how lucrative the incentive plan would become.
A Persimmon statement acknowledged the lack of cap:
“The board believes that the introduction of the 2012 LTIP has been a significant factor in the company’s outstanding performance over this period, led by a strong and talented executive team.
Nevertheless, Nicholas and Jonathan recognise that the 2012 LTIP could have included a cap. In recognition of this omission, they have therefore tendered their resignations.”
Redrow has formed an alliance with Coleg Cambria and Liverpool John Moores University to launch a housebuilding degree which will commence in September.
It is the latest in a number of initiatives by large house builders to address the skills shortage. Given that the government is setting ambitious production targets and Brexit is likely to reduce the availability of EU construction workers in the UK the skills shortage is only likely to worsen.
Karen Jones of Redrow said
the company is “working in partnership with further education and higher education providers to develop new pathways that enable recruits to develop the aptitude, attitude and strategic nous to deliver communities at scale”
Despite the headline, this isn’t the first UK degree in house building as any of you with a BSc in Residential Development from Nottingham Trent will know.
However, a partnership between a national house builder and two educational institutions seems like a step in the right direction to provide a long-term sustainable solution to the industry skills shortage.
The one obvious caveat is that the course it is currently only available to Redrow employees which means it has more in common with an apprenticeship than higher education. Opening the course up to school leavers would have a far greater impact on the sector.
House building suffers from a skill shortage. Much is made in the press about skilled site labour leaving the UK as a result of the Brexit – less is reported of the lack of manager and director grade staff with relevant industry experience. But that doesn’t mean there isn’t a problem. Quality staff are in short supply and hard to tempt away from their present employer.
So if you are looking to recruit professional grade staff how can you adapt?
Firstly, get your mindset right for the first interview. You are going to have to work as hard selling your company and job as the candidate is at selling themselves.
Don’t assume everyone knows all about your company and don’t take for granted the candidate has already made up their mind they definitely want the job.
Be prepared. Make notes as to why your company is a great place to work beforehand. How is it different to the rest of your competitors? Make your pitch compelling.
Secondly, focus on the skills that you need rather than job titles on the candidate’s CV. Whilst it might feel like a safe strategy to hire someone who is already doing the job for a competitor you will be restricted to a very small pool of candidates making your chances of recruiting low.
Look at someone stepping up to the position, or coming from a consultancy, a supplier, or self employment or maybe another industry altogether. By doing this you are significantly widening the field and vastly enhancing your chances of filling your vacancy.
Finally, make the best offer you can first time. Apart from the obvious financial incentive, a strong salary offer is a statement of intent. It shows the candidate you really want them and that you make decisions that get results. The chances of them accepting your offer and refusing a counter offer increase significantly.
A low offer with the intention of increasing doesn’t carry these emotional benefits even if you subsequently increase it.