Editor's note: This article is part of Construction Dive's 50 States of Construction series, in which we talk with industry leaders across the U.S. to discuss the business conditions in their market.
Kevin French has always lived and worked in the state of Maine, and has no plans to change that.
After getting his start in construction "on the back of a shovel," French worked his way up through excavating and estimating companies to join his friend Denis Landry in creating Landry/French Construction in 2010. Since then, the firm has been recognized as one of the fastest growing companies on the Inc. 5000 list and reached $65 million in revenue last year.
French took a big risk launching Landry/French in the midst of the Great Recession, but he and Landry found a way to succeed in Maine's tight-knit commercial construction industry. After cementing their position as a major player in the state, Landry/French has turned to recruiting former Maine residents to leave their out-of-state positions, return to their roots and join the growing construction firm.
Despite the severe labor shortage affecting companies in the state — as well as firms across the U.S. — French is confident in the market's strength. Being a lifelong Maine resident, French takes pride in what he calls an "honest" group of contractors who root for mutual success.
Construction Dive spoke with French about the opportunities and challenges facing construction firms in Maine.
Editor's note: This interview has been edited and condensed.
What sectors does Landry/French specialize in?
FRENCH: We’re commercial contractors of buildings, primarily healthcare and a little bit in education and housing. In the state of Maine, it’s pretty hard to have a specialty. There’s not a tremendous amount of work throughout the state, as the majority of the work is concentrated in the southern Maine area. Then as you move out, it definitely decreases. We happen to be located in southern Maine, so it puts us in a good marketplace.
How did your firm succeed as a newcomer amid the recession?
FRENCH: When we started Landry/French, everybody told us we couldn’t do it. We were in a major recession. Let’s say there are 30 construction companies in the state of Maine. They don’t have enough work to survive, and we’re coming in to be the 31st company. People would say, 'Why do you think you guys, being fresh out of the gate, are going to have any work at all?' And it was just the opposite. We were busy right from the start.
We were seeing companies cutting down services to try to at least be profitable. They cut a lot of their more expensive salaried employees to try to survive. We had the opportunity to pick up a lot of those high-performing employees.
How does the construction industry in Maine differ from that of other states?
FRENCH: Maine’s a unique place to work. The Maine local contractors are an extremely honest bunch of people. We take care of each other up here. We want to see each other achieve and do well.
What are some of the biggest challenges your company faces?
FRENCH: Skilled labor. I’m sure it’s just like that anywhere. We’re not having a difficult time finding labor, we’re having a very difficult time finding skilled labor. We’re mostly management, and it’s our subcontractors that are having difficulty finding qualified painters, drywallers, mechanical and electrical guys. There’s a lot of work out there to be had, and they just can’t go after more work because they don’t have the people to do it.
Do you expect the labor situation to get better anytime soon, or will it continue to tighten?
FRENCH: I see it probably worsening. As our workforce is becoming older, our skilled labor [force] is going to be decreasing. Some way, somehow, we’re going to have to supplement our aging workforce.
What is your company doing to combat the problem?
FRENCH: I think construction has a stigma of not being a rewarding life, and it’s really unfortunate. Coming to work for our company, you get great pay. We have awesome benefits, we pay health insurance, we pay life insurance. We have a 4% match on a 401(k). We’re an Employee Stock Ownership Plan company, so they are able to participate in the profits of the company. Becoming an ESOP company has really helped us in attracting management-level people.
Do you consider that the most crucial step, getting the message out that this construction is a good career path?
FRENCH: Yes, it’s going to take a lot of us to do it, not just the general contractor world or the subcontractor world. It’s going to take all of us working together to get this message out and educating [people] as young as we possibly can. As parents, everybody wants to have their kids to go to college. There aren't a lot of options. When they graduate college, probably one of the last things they want to do is go into construction, especially in the field. Would they consider it at management level? Absolutely. But it’s the skilled labor that’s really taking the hurt right now.
What is your business outlook for this year?
FRENCH: We have plenty of opportunities work-wise. 2017 is looking phenomenal, we’re booking work into 2018 now. There's very strong demand in southern Maine, specifically around the Portland area. We have 16 projects going on.
Why is demand so strong right now?
FRENCH: I don’t know. I don’t know if it's because they're threatening to increase interest rates. Maybe people are saying, 'I’ve had this project on my table for a long time, I might as well pull the trigger.' I don’t know if it’s because they’re seeing construction costs increase in the last couple of years. So they’re saying, 'Well this isn’t going to get any cheaper, I might as well go ahead and do it.' In our particular area, things aren’t on the shelf very long until they sell or are leased. I think it’s the overall comfort of our economy currently.
Have you experienced construction cost increases?
FRENCH: Materials, labor, everything has gone up. If 2017 continues to increase at the rate it’s increasing, I’d say it probably would continue to go up some. I don’t think it can survive on the rate it’s gone up over the last couple of years. I would think it would start leveling out a little bit more.
What materials are you seeing the biggest increase in prices?
FRENCH: It’s across the board, but mostly metals. In steel, we’ve seen a tonnage increase.
Are you a union or open-shop contractor?
FRENCH: We’re open-shop. There’s very few union contractors in the state of Maine. In this state, it doesn’t impact our business at all. I hire union subcontractors as well as open-shop. We don’t have any preference or hold anything against the union guys. If they have a good [bid], then we’d love to work with them.
How would you describe the way you approach projects?
FRENCH: Open-minded. Oftentimes to get over the hurdle of the lack of subs, we’ll bring two subcontractors together. People that get along well in the industry, let’s say there are two drywallers, we’ll bring two together, have one prime contract, but let them team up with their labor. We’re stewards of that, of making those suggestions and trying to bring two firms together and make them work it out.
We’re also practicing Lean construction methods, especially in scheduling, pulling in everybody that’s involved in the project and making them think as one.
How have you implemented Lean methods into your company?
FRENCH: Trying to plan their work as efficiently as possible, allowing them to be more profitable. We’re scheduling more efficiently. On our end, we’re trying different thoughts and ideas of working with all of them. If [the subs] are profitable and doing well, we’re profitable and doing well.
We just started in 2016. There are very few people in the state of Maine doing Lean. The larger national firms are doing it, but not the Maine contractors. It’s a big investment to start, the monthly costs. There’s a lot going into software, a lot going into our training. It’s a different mindset of us as general contractors dictating what the subs’ schedule is going to be, versus us working together on how to determine the schedule. For years, general contractors have been, 'Here it is, like it or not, but we’re going to get it done,' versus saying, 'Here’s our end date. How are we all going to get there?'
How is your firm growing so quickly and attracting so many new employees?
FRENCH: We’re a firm that constantly wants to improve. We don’t like status quo. Our firm’s not about our father owning it before us and his father owning it before him.
We attract and recruit people who were originally from the state of Maine who have moved away to work at national construction firms. We’ve reached out and attracted them back to our company and back to live in our state, and they come back with a great deal of knowledge, whether it’s technology, schooling, the training they’ve had at these national firms. It’s brought a lot to our company.
Why have those people who went to national firms returned to Maine?
FRENCH: When you get out of college, you’ve probably got aspirations of working at a big firm and having a lot of opportunities. Maine, even though we’re a phenomenal state and a great state to live in and raise your children, we just don’t have a lot of big construction experience [to offer] here. A lot of people, when they graduate, they might have just left and stayed away.
It’s all about comfort and opportunity. Now they see our company in the Inc. 5000, the state of Maine’s fastest-growing company, the 401(k), the ESOP. I think they’re saying, 'Wow, here’s a local company that’s got everything I have in Massachusetts without the day-to-day Boston traffic, let’s talk.' Not everybody’s up for working in a skyscraper in the middle of Boston.
Why have you chosen to stay in Maine for your career?
FRENCH: I just love it here. I wouldn’t live anywhere else. Except in the winter. When it gets too cold, I complain that I’m moving to Florida — especially when I’m shoveling my driveway.