Engineers from the Las Vegas and Reno areas gathered recently at The Stirling Club for the monthly Industry Focus Roundtable to discuss pressing issues in their profession. Connie Brennan, publisher of Nevada Business Journal, served as the moderator for the event, which included topics such as: staffing and recruitment, training programs and internships and the development review process. Following is a condensed version of the discussion, which began with introductions.
Dwayne Miller: I’m the principal electrical engineer and the chief operating officer for JBA Consulting Engineers. Our biggest challenge is staffing. It’s tough to locate good, superior talent. Las Vegas is a tough sell because the cost of homes has gone up. It’s not as easy to attract people here as it used to be.
Tom Harris: Harris Consulting Engineers is celebrating 22 years in business. We do mechanical and electrical engineering, specializing in HVAC, plumbing and electrical systems, with the majority of our work in Southern Nevada. I concur that finding, recruiting and keeping talent is the most serious issue we face.
Michael Pullen: Nevada By Design is a civil engineering firm, and we also do staff augmentation and support services. We just hired three new people and we’re a little nervous about how they’re going to adapt to our community (Las Vegas), because we are a much different city than any other in the United States. When people come here, sometimes it’s difficult for them to get used to it. Finding people, keeping people, attracting people to our organizations and getting the work done is very critical.
Mark Hedge: I’m a principal at Lochsa Engineering. The staffing issues are of utmost importance, but we also have to ensure that we have adequate work in the future. My concern is that the escalating price of land is starting to affect people, and they can’t afford to buy houses. We need to start building homes for the market and the masses.
James Duddlesten: G.C. Wallace has offices in Las Vegas, Reno and Sacramento. Our biggest challenge is finding people to do the work, and in some cases, we have to turn away work because we can’t find qualified individuals. We have undertaken extensive recruiting efforts at universities to capture graduating engineers.
Dennis Waibel: I’m the managing principal of our Las Vegas office and I sit on the board of directors for the national Carter & Burgess organization. In addition to engineering, we also practice architecture locally as C&B Nevada, Inc. I think the quality of life in this market and the cost of living are things we all need to be concerned about. On the other hand, we have big opportunities because of the water, air quality and transportation. Yes, everyone is struggling across this industry to find the right talent because we have a shrinking supply line that feeds this market and industry. On the bright side, if we all collaborate strategically about how we’re going to produce this work and price it, we ought to be really successful in the next 10 to 20 years.
Gregory DeSart: I founded Geotechnical Environmental Services (GES) in 1992, and we also have a sister company, Eagle Drilling. Staffing is the primary challenge we face, but I would like to discuss using this meeting today as an opportunity for an industry forum to discuss long-term strategic solutions to the problem, through internships or training programs, rather than cannibalism and grabbing each other’s key people. We can probably find better solutions working together, getting better talent into the system and maybe growing our own talent.
Edward Taney: At Taney Engineering, the biggest challenge we have right now is staffing. We’ve put together an internal organizational chart and a financial incentive program. It is viable and seems to work well as long as we have key people working in the right manner. We were successful in finding a few more interns at a recent forum we held at UNLV. Nurturing the young students and bringing them into an organized atmosphere with financial incentive programs seems to be working well.
Kathy Smith: Last December my company, VPoint, was purchased by TRC Company, a national firm known for energy and environmental engineering. We started an internship program to deal with the challenge of finding qualified people, and we now have between seven and to 10 interns working for us at any one time. It has been easier for us to attract people as a national company because the interns can grow within the company and do projects in other parts of the country. However, I feel it’s more important to keep the good people you already have. Sometimes we forget about the people who are really the bread and butter in the firm, making the money today instead of tomorrow.
Mark Jones: I’m president and CEO of Southwest Engineering. Human resource issues have been a big struggle for us. I’m also noticing a paradigm shift in our business as land development engineers, relating to the land prices. Another challenge is increased liability because of the changing market, and the increase in mixed-use and higher density projects. Our clientele have become interested in removing themselves from that liability and shifting it onto us, but that becomes cost prohibitive. I wonder what the future market holds if that shift continues.
Pete Blakely: Blakely Johnson and Ghusn is an architecture, structural and civil engineering firm. Our major office is in Reno, with a satellite office in Las Vegas. Our clients are having a hard time making projects economically tangible. We do a lot of industrial and distribution projects, and we find that land and construction prices are rapidly outpacing sales prices and lease rates. Frankly, I don’t believe the housing prices in Las Vegas or in Reno are sustainable at their current levels. At some point, something will happen, and I’m curious to see how this will affect our industry.
Brent Wright: Staffing is a big concern for Wright Engineers. We’re a multi-disciplined civil, structural, mechanical, electrical and surveying firm with offices in Las Vegas, Irvine and Phoenix. We’ve sustained our growth by hiring students right out of school, but we’re finding many of them are reluctant to locate to Las Vegas because of the housing costs.
Mark Johnson: I’m vice-president of RBF Consulting, office manager for our Las Vegas office, and I sit on our corporate management committee. We have 14 offices in California, Nevada and Arizona. Recruiting at colleges has been successful for RBF. We visit probably 25 to 30 campuses a year; last year we hired about 60 civil and planning professionals at the graduate level. It’s been a great way to continue our growth in this great economic time we’re having.
Brita Tryggvi: CFA is a Reno-based company of about 40 people, and we do civil engineering, landscape architecture, land-use planning and surveying. We operate in Reno and the surrounding area, and we also we work in Truckee, Calif. and down the eastern front of the Sierras. One challenge I would have brought up several months ago was that I didn’t think engineers’ fees were keeping up with salaries and other costs. I don’t think it’s as big a problem now as it used to be, but I’d like to find out what others think about this.
Michael Holloway: I’m the managing principal of the western region for Poggemeyer Design Group. We’re in Las Vegas, Reno, San Diego and Seattle. We do civil, structural, landscape, architecture, planning, surveying and construction management. Our challenges are recruitment and escalating salary costs; I hired three top people in the last four months and I’m shocked at how much I had to pay to hire them. About 80 percent of our jobs are public works, and the problem there is escalating construction costs. Clients know what they used to get for a certain price, and they’re not getting close to that now, so we have to deal with their champagne tastes and beer pocketbook.
Nigel Miller: Kleinfelder, located in Reno and Las Vegas, performs geotechnical, environmental and construction services. One of the challenges in our profession is a lack of business acumen. We need to operate like a business – not necessarily an engineering firm – and understand how companies make money. We like what we do, and that’s a good thing, but if we realized the economics of what we’re doing, we could do much better and we would be able to pay people what they really deserve.
Stu Hitchen: I’m managing principal of the Las Vegas office of WRG Design. We do land surveying, land planning, landscape architecture and civil engineering. I’d like to talk about getting projects approved and entitled so our clients can build them. Another problem is the less-than-qualified work force on the construction side. They’re going way too fast, building things out of sequence, and creating potential for conflicts and re-do’s of work. As an industry, we need to have greater presence at the job site, whether it’s verifying that things are in the right place according to the survey, or just more general observation. We do that in the public sector, but in the private jobs it’s lacking.
Kenneth Ackeret: At Kimley-Horn and Associates, a national firm, one problem with growth has been maintaining the culture and philosophy of the firm. Our philosophy has been to have our engineers work one-on-one with clients to make sure they are getting good service and their demands are being met. It’s difficult to keep that system going when you’re dealing with rapid growth. As for recruiting, we’ve been successful in getting young professionals out of the Snowbelt and bringing them to Las Vegas. After two or three years, we send our younger staff members back to college campuses in those areas to tell the students what it’s like to work for our organization. Another issue we’re facing is the shift toward moving liability onto the engineers. We have no problem being responsible for what we do, but we can’t take on everyone else’s risks: the contractor, the owner, etc.
Recruiting and Staffing
Connie Brennan (Nevada Business Journal): It sounds like recruiting is a problem you all share. Is it just engineers, or are there problems recruiting for other positions within the company?
DeSart: All positions.
Miller: A big part is that it’s a different generation. Younger people want to get out of college and be making six figures overnight. Graduates have a reality check when they first get out of school.
Smith: When I graduated in 1981, interest rates were 22 percent and a lot of my schoolmates couldn’t get a job, so everybody who had a job appreciated it. Now, it’s who is the highest bidder. Workers don’t have the work ethic they did when it was harder to find a job.
Waibel: The work ethic in corporate America used to be to work hard for the same company for 20 or 30 years and you’d eventually be rewarded. It’s not like that anymore. People coming out of college don’t want to work 80 hours a week; they want more time with family and friends.
Hedge: It’s “me, me, me” and it’s not just engineering. It’s also architecture, and I think it’s across the board in all the trades. Job superintendents are making more money now than they ever did.
Smith: Developers are hiring engineers to manage their projects. We’re training them and then the development community is hiring them.
Jones: I don’t see a housing bubble, I see a human resources bubble. If there is a downturn in the market, you’re going to see a lot of people out there not understanding what they have.
Miller: And they are unequipped to know how to actually make money.
Brennan: How quickly are people apt to jump ship for $5,000 more a year?
Wright: In a heartbeat.
Johnson: If you’re talking about recruiting, you also have to talk about the retention side of the equation. What we’ve found is that we’re all doing a pretty good job of training these bright college recruits in the first couple of years, but after two to five years, our clients will recognize the talent and tap them on the shoulder, and we find it difficult to compete.
Miller: With retention, you must talk to people and know where their heads are. You invest in them both personally and financially, so you don’t lose that resource in four or five years. The relationships they develop with clients are invaluable to the firm, so you want to keep them, but it’s tough because some have completely unreasonable demands.
Blakely: We find that if people stay with us for two years, they are pretty much there forever. I think our losses during the first two years of employment are sometimes caused because we need staff so badly that we hire people we probably shouldn’t have.
Holloway: Desperate people do desperate things.
Blakely: Our goal for 2006 is improving our retention, and we’ve made a conscious decision that we’re not going to hire unless they are the right people. It’s going to limit our growth, however, because we do have to steadily turn work away.
Brennan: Is the shortage of engineers a local problem?
Hedge: No, it’s national.
Miller: Colleges across the country are not producing enough engineering majors.
Smith: It is a little tougher in Nevada because there are only two colleges from which to recruit, and since 9/11, it’s become more difficult to hire foreign students to fill the gap.
Brennan: If you’re successful in recruiting a graduating student, how long does it take to get that person up and running so they’re profitable for the company?
Smith: It takes about a year.
Duddlesten: The shortage of technical engineers and people associated with our profession is not going to be solved in the short term. We’re challenged to get high school students into engineering programs so they can be available to us four or five years down the road.
Brennan: Is the staff you currently have overworked? Are they putting in more than 50 or 60 hours a week?
Jones: You can only do that for so long, because they don’t want to work those long hours and they’ll go somewhere else. When we were starting out, if we needed to work 60 or 80 hours, we would do it, but it’s different now. Because it’s such a target-rich environment for young engineers, they want $80,000 a year, working no more than 40 hours a week, three weeks of vacation and full benefits. I don’t know how to provide all that and still set competitive rates for my clients.
Hitchen: For those of you with offices in other regions, is it worse in Southern Nevada?
Several Voices: Yes, it’s worse.
Tryggvi: We have the same problem in Reno.
Hitchen: One thing here that I don’t see in other markets is clients hiring our people. In the last year and a half, I’ve lost people only to our clients, not to other firms. They’re taking our best and brightest project managers.
Johnson: It isn’t worse here in Las Vegas, but it’s different. We’re experiencing the same staffing and recruitment difficulties in our California offices. It’s compounded in Vegas due to the transient nature of this community. And many people here have never experienced a recession like the one California had in the early ’90s.
Hitchen: It’s how good the market has been here.
Ackeret: Las Vegas has not had a downturn that shook the engineering community since the late 1970s. It’s not fun being an engineer when you have to wonder, “What are we going to work on tomorrow?” For the last 20 years, it’s been, “How can I get it all done?” There are many important engineering projects going on in this part of the U.S.. I tell my young staff coming in that they’ll get three years of experience in one year of working in Las Vegas because there’s such a volume of work to be done.
A Changing Economy
Brennan: Are there concerns of a slowdown because of the cost of living and the cost of land?
Jones: No, not really.
Hedge: The warehouse industry is a big issue. The only warehouse people building are those with airport leases because their land costs are lower.
Smith: There’s a shortage of land zoned for industrial and warehouses.
Hitchen: The changing market will mean a shift in the kind of work we do. People will start commuting because our residential projects will be out further. This isn’t any different from other growing metropolitan areas.
Johnson: If you look at the demographics of the country, people want to live in the Southwest. Between Arizona, Nevada, California and the rest of the Sunbelt states, I see tremendous opportunity.
Harris: The issue with recruitment is that I’ve lost half a dozen candidates because of the cost of housing here.
Hitchen: Compared to where, though? Other places in the West are just as high, or more so. If you’re comparing it to the Midwest or the East, then you’re at a disadvantage.
Miller: Housing in the East is cheaper because there’s no work there. People have to go where the work is.
The Review Process
Hedge: I tell clients, start to finish, the review process takes at least nine months after entitlement, and they hate hearing it.
Pullen: That’s a minimum
Duddlesten: I’ve found that the problem moves from one entity to the other. One entity might have a great reputation of shorter time spans for getting things approved, but over time they lose personnel or are inundated with additional work and their processing slows down. Then another entity will be the “good guys,” able to quickly produce things. It’s clear that some agencies have bigger challenges than others.
Holloway: The developers are not only hiring from us, they’re hiring from the city and county development services staff. They find someone who is easy to work with and knows the “ins and outs” and they hire him. But they’re biting off their nose to spite their face, because then it makes things slower at the entity.
Pullen: Finding people to work for the city and county has been tough, and some of the people they hire are inexperienced. What they’re doing is reviewing plans using a checklist.
Ackeret: The projects we’re putting in are not what we were doing 20 years ago. The complexity and level of difficulty are higher. The staff doesn’t have the experience and we’re dumping difficult engineering problems on them for review.
Brennan: Mark [Hedge], you said the review process takes nine months. How does that compare to last year? Is it better or worse?
Hedge: It’s probably a month longer, but some of that can be attributed to the sheer volume of projects.
Brennan: It’s my understanding that some of the codes are subject to interpretation.
Taney: I’m resigned to the fact that it’s just inherent in what we do. We are going to have bureaucracies and plan checkers making our lives difficult. I’ve stressed to my staff that it’s important to get down to the government office quickly and develop relationships with the people in charge of getting the plans through the system. It’s not engineering that counts in that situation – it’s people skills. It’s a very hard corner to turn; you come out of engineering school and you’re technical and trained to chase a diagram down to a thousandth of an inch. But the reality of consulting is not so much engineering; it’s people skills: how quickly and promptly you can show the client that you’re on top of their project.
Ackeret: We’re spoiled by how fast we turn projects and plans, compared to other parts of the country. We are at light speed in starting a project from beginning concepts to breaking ground; we’re all our worst critics on what we can do.
Taney: A lot of us have heard horror stories from Orange County, Calif. You go through environmental issues for a couple of years before you even get to entitlements.
Miller: It’s the same in Atlantic City.
Ackeret: I worked in Detroit, where they have had 300 years of bureaucracy. We’ve only had 100.
(laughter)
Jones: I’d like to get back to designing plans to build from, not designing plans to please the reviewer. We end up having to put information on a plan that’s simply for the benefit and the ease of the reviewer – little silly things that are meaningless to the project. Sometimes they get so caught up in things like font size and parcel numbers of adjacent properties that they lose sight of whether the project will actually work.
Holloway: In one of our projects, we wanted to move a stop sign five feet, and they insisted we include a picture of the sign so they would know what a stop sign looked like.
Jones: At the expedited review process they have at the city [of Las Vegas], if I can sit down with the reviewer eyeball-to-eyeball, we can get rid of those nonsensical comments that are simply for the reviewer. It’s a very efficient process, and I’ve encouraged [Clark County] to use the expedited review process for civil engineering projects, but they’ve been reluctant to allow that to happen.
Wright: My specialty is structural engineering, and I hear the same frustrations from our civil department that you’re talking about. For the most part, I’ve always thought the regulations in Las Vegas are helpful to our industry in a lot of ways: it creates work. You almost have to have an engineering design if you want to plant your mailbox out in front of your house.
(laughter)
Brennan: Brita, are some of these frustrations happening in the northern part of the state as well?
Tryggvi: The review time that Mark Hedge was describing does not take that long in Reno. From initiation of final design to permit, we’re probably talking four and a half months.
Blakely: It’s different in the north. Storey County could build a munitions factory in about a week.
