Skyline Construction’s ESOP providing a rallying point for employees
Sharing financial information, strategic-planning retreats, choosing the right people and communication contribute to company’s success
Monday October 19, 2009 -- Jennifer Higgs
The week Skyline Construction started its Employee Stock Ownership Plan (ESOP) the field operators came to CEO and president David Hayes with 10 cost-cutting measures they wanted to implement immediately.

The California-based company started being 100 per cent employee owned in 2005 when two of Skyline’s three founders left the company. Skyline’s ESOP is unique because it includes the unionized employees, says remaining founder Hayes, who adding it seemed logical and has worked well.

One of the field operators’ suggestions was to get rid of their large trucks and scale down to a simple pickup truck, which Hayes estimates saves the company approximately US $250,000 annually.

The willingness of employees to get rid of their large trucks was especially significant because Hayes was told there was a time when superintendents would only work for the company if they had one of these trucks to use.

“When they became owners it was the complete opposite, so it just shows you even the stereotypical thinking as it relates to a business like construction is actually wrong when you get down to it,” says Hayes.

“Every team needs something to rally around, and (the ESOP) certainly gives us a rallying point,” he says.

“Being unique probably makes us strange to all of our competition, but, to us, it’s what identifies us and what we are proud of, so there’s definitely a sense of pride.”

The company has grown from $40 million to $100 million in revenue, while also “doing great work for great clients,” says Hayes.

He points to the company’s open-book environment as one of its top business practices. Financials are shared with all employees including the percentage of wins and how individual business units are performing.

Every year the company selects nine employees from various departments to go on a two-day retreat with Hayes. The delegates look at employee and customer surveys and formulate a strategic plan.

Hayes says this process is important for two reasons — the people who do the work are being asked how they can better do the work and they are deeply engaged in high level strategic planning for the firm which impacts their level of involvement, commitment and loyalty.

Skyline also ensures employees culturally fit with the company. Hayes says self-reliant, prideful people who do not need much supervision are those who do well at the firm.

“We utilize the canoe theory, which is you have to be able to paddle,” says Hayes.

Communication is another key to the company’s success, says Hayes, who writes a weekly blog through the company’s Intranet site keeping everyone informed of his travels and what’s happening.

“We are always talking,” he says, adding the team’s communication strength has brought them together during difficult times as well.

The Wall Street Journal and Winning Workplaces named Skyline Construction a 2009 Top Small Workplace.

Skyline Construction has offices in San Francisco and Santa Clara and focuses on high-end tenant improvements, mission-critical data centres and technical life science requirements and is a Bay Area leader in green and LEED construction. To learn more, visit www.skylineconst.com.

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