Mark: Today on PowerTips Unscripted, we talked to Andrew Schmidt, CEO of Amek Design Build in Minnesota. The labor shortage has been a frequent topic on this show, and today’s episode is going to join the ranks. Andrew is here to talk about the Apprentice and internship program, and why it’s critical to invest in the next generation, and we’ll hear all about it in just a minute.

Victoria: Hi, I’m Victoria Downing, and welcome to PowerTips Unscripted. Or we talk about tips, tactics and techniques to help you build a strong, profitable remodeling company. And I’m here with my co-host, Mark Harari.

Mark: Hey. Good morning.

Victoria: How are you?

Mark: I’m doing wonderful. Good, good. How are things on your side of the room? Awesome.

Victoria: Exciting stuff. Have it. All right. In the middle of all of our roundtable meetings, we get to talk, shop and strategy with all our members. So that’s really an exciting time.

Mark: It’s always exciting, I love it. We got, a meeting coming up tomorrow. Right.

Victoria: When’s the. Yeah, tomorrow night. Well, yeah.

Mark: Yeah, it’s going to be fun.

Victoria: And so again, one of the big topics of conversation, all these meetings and all of the speaking engagements that are going on is, labor shortage among other just.

Mark: Can’t, can’t shake this topic. No, I can’t somebody fix this thing.

Victoria: Well, you know what we’ve got. Somebody is making a dent in that with us today.

Mark: I like it.

Victoria: We right Iraq do it. All right. Today we get to welcome Andrew Schmidt, the CEO of Amek Design Build. And I met him when I was out speaking to the Minneapolis Nari Group, which was awesome. We started talking about the whole bit about labor shortage. No. Andrew started his company in 1996 with his twin brother, Matt. And now and then his father came out shortly thereafter, and his brother Paul was joined the company as well.

Victoria: They started out as a roofing company and now are doing over $7 million in full line remodeling with 21 employees and growing. So we’re going to talk today about how they’re finding the best people for their company. Welcome, Andrew.

Andrew: Thank you.

Victoria: So hey, you know, we got talking a little bit about the whole labor shortage and and how you are changing the model a bit and and doing things differently in your company. Tell me a little bit about what you’re doing and, and how you what the strategy you are using to grow your company and find the best employees.

Andrew: Yeah. Thank you. That’s a big question. I think, back when I was, I served, when the labor shortage started to kind of rear its head in about 2012 and 13, when we started coming out of that building recession where we lost almost 50% of our labor force, I think 2007 eight. And so members, remodeling members came to me and said, hey, we’ve got a problem.

Andrew: how are we going to solve this problem in the labor shortage? If you can’t find the carpenters and the tradespeople? And so I was thinking about that, and I started doing some research, and I looked at my job descriptions and ads, and we placed and I looked at my, other remodelers ads, and we all had, five years experience to apply for this job.

Andrew: and so right there kind of got me to thinking, like, okay, how do we change this? we have to change our expectation of what we’re looking for. And back to when we started our company, we were laborers, and we started, roofing houses. And we ended up starting to treat me like a reasonable employee. So we would take new people that we knew that were good people that were like us, and then start to train them.

Andrew: Over the years, as our company grew, we started to see opportunities in big markets where there’s a lot of subcontractor labor. And so you start just hiring a lot of subcontractors because it’s more efficient, it’s more profitable to do. and so that’s kind of the model that I think in the Twin Cities, at least, I’ve noticed that a lot of contractors don’t have tradespeople, especially I remodeling.

Andrew: We usually use subcontractors, in our space. so that that caused me to have to think about like, okay, as an, as an organization or even Housing First, which we’re also part of. We can do stuff at the capital level. And so I started to poke around to see what can we do. And there was this, Jim Nash.

Andrew: He’s, he’s a politician. He had put this bill forward. It’s called ex-CEO. This location a post-secondary option. I thought, well, this is a great idea. So I started getting to the capital like, hey, this is amazing. What can I do to help you? and it was, it was a bill that I don’t know if you guys have worked in politics, but it takes a while to make change, right?

Andrew: And so, I try to help out and find places like that. even with my own kids, I thought, well, how can I get them trained in the trades? So I started to look into it, and I can’t even hire my kids that are, younger in school because construction is deemed, I’m not sure where, hazardous work environment.

Andrew: So we have a construction deficit.

Victoria: So you can’t bring in, like, high school kids or even college age kids.

Andrew: No, not in the state of Minnesota. So something we were trying to work on saying, how can I do this? The only way I can do this is when I, if I, if I own 50% of my company and I worked in the field, I could have my sons come and work for me at my company. Wow. because we have more employees and I have partners, I can’t even hired illegally to be apprentices and start to train them in high school.

Andrew: So it’s how after high school, we get an opportunity to grab kids out of school and say, hey, construction is great.

Victoria: Now do you think that’s too late?

Andrew: Do I think that’s too late? I think, they made decisions. I think, as we’ve been talking to people in the schools, like, there is a change in the last five years with counselors saying, hey, construction is a good industry. You should consider that. But they don’t get a chance to pick up a hammer because a lot of the shop classes kind of got decimated, you know, a lot of the trades.

Andrew: And so there’s a lot of kids that are really talented that, I think in my generation, a lot of my friends are going to start building the internet and not building houses. Yeah. So I lost a big labor shortage there. And so it’s a matter of how to get trapped, this next generation to this career trade.

Andrew: And one thing, I could I thought, like, okay, how about this? How about if I paid a really well and that ended up working so early on when I kind of thought, like, how do we how do we attract the next generation partners? I thought, I’m just gonna make an offer. They can’t refuse. And so we and we’re paying, you know, 14, $16 an hour to take an apprenticeship in a train, and I offer 22 bucks an hour.

Andrew: Oh, wow. I had a hundred applications in about a week.

Victoria: And know what these were for? These were for inexperienced people that you were going to train.

Andrew: Yeah, yeah. So that was the apprenticeship program that we developed. So I think we’re looking at like, where’s the career path for a carpenter? And I couldn’t find anything. I sort searching around and there was no clear path. And so we kind of created our own career path with my production team and my, my lead carpenters. we kind of came up with a career path for, for, people that if you have no experience, we want to take you a train.

Andrew: You know, we do use things like, I don’t know if you guys have heard of the predictive index.

Victoria: Yep, yep.

Andrew: That’s how to assess how you perform after I hire you. And so we have a real rigorous process by which we bring on apprentice. I don’t want to take a lot of risk in hiring people that don’t aren’t going to love the job. Yeah. So use index to help assess whether they’re going to love this career path or not.

Andrew: So eliminates risk of me hiring five people to find one or hire ten people. They all just raise the right time. 106 and then we do, value based, interview process or we’re trying to find do they make the right fit? Do they should our culture do they should our values, you know, that person who fits our values and our culture also has the right profile.

Andrew: That’s going to love being a carpenter, because we’d model that in all of our carpenters, and we just know there’s a certain person that really has a long shelf life, and it becomes a great craftsperson over time. and so once that happens, then we offer them that position and they usually stick with us and we’re investing into one person, instead of having to invest into seven people to find the one that sticks around.

Victoria: So you’re following the whole hire slow model. So you’re using the predictive index. And, you know, we’re more familiar with this, but I think there’s some similarities there. And then you’re putting them through, an interview process to try to suss out their values and make sure that culturally, they will fit. Could you tell us a little bit about the process?

Victoria: They’re like, who interviews them? Who reviews all this stuff, who’s, you know, responsible and at what point? Who’s involved in making the final decision. This is the person you’ll bring on.

Andrew: Yeah. So as the CEO of our company, I still carry that final hat. Like, I think the culture in my company is my responsibility. the engagement of every employee is primarily has to start with me. I do work with my managers who they’re going to be answering to. They’re they’re part of the process. And so we we interview together.

Andrew: and I let them make the decision. But they ask me, is it fit? So I would be the one to help them say, if you like this person, this person would make a great employee. And so they’re the ones that are going to be leading them, holding them accountable, managing them, training them. And so I want them to make that decision.

Victoria: Now, are you doing this just for Carpenters Field people, or are you also doing it for other positions in your company?

Andrew: Yeah. So the internship program is usually what I look at. The apprentice would be someone that’s raw, that has no experience. Internship would be someone that’s not a school. So like our design department. So we always bring in designers. They have they have they have some technical skill and they get that from like the code kind of technical college or some of our local institutions around here, that training, whatever it is, that is the design software that we use.

Andrew: And so we love to look to them training and bring them out, give them a shot to try to take their skills and put it into a real company and apply them. And so, our entire team is designed to help, kind of help introduce them to our company and get them on, get their feet under the design cap capability.

Andrew: We let them go out and, and job sites that the initial measures, you know, come along and watch how we interact with clients, create those static designs. And then along the entire process. Yeah, there’s a certain personality profile that we’re looking for from the predictive index for that. So we also do that every single person we hire, we try to design, we try to understand what makes a great employee in this area.

Andrew: So there’s been a lot of work that me and my team have done really understand. I really enjoy this. So one of our passions is to help people increase the engagement in our company by enjoying the workplace, providing the resources to succeed. And so we have to kind of do, along with, you know, be a passion for helping people to do a cultural shift in our company, and then find employees and find leaders who really want to invest.

Andrew: And I had to change what I expected of my employer. And like the employees, of what’s what’s success for them. It’s not just, being the most productive. It’s training people, it’s investing. And so we got to create that culture here in investing in the next generation.

Mark: Andrew, the, the apprenticeship program is there. Is it all on the job, on the job site training, or is there any off? And then a second part to that is the is there have you ever had problems with frustration of, you know, I can’t get my it’s slowing down my work with your experienced guys.

Andrew: Yeah, yeah, both of those are great questions. we do some we do supplement education. And so in our every, every year we’re doing jurisdiction reviews for our employees, for her career path reviews. We’re asking them what do they enjoy about their project with their job and how can we help you? What are some of the next things?

Andrew: We make time for people. We encourage them to go back to school if they want to continue to advance their career, if they need carpenters, a lot of carpentry work is, yeah, on time with our certain, experts and and training and part of the job. So a lot of carpentry craftspeople are on the job training.

Andrew: Some of the, you’re going to move up into, like, being a field manager or assistant. Your manager will use various, programs to help supplement that. You get an education. so there’s certified project management classes that they have. And in English skills, we do some training and soft skills. with people that need it. So we kind of, even box will pay for the works that they want to learn and study.

Andrew: so we’ll help support that training. but I wanted to come from them, not from us, just not top down. It’s them wanting to do that. And I found that when they want to do that, we support that. They actually get,

Victoria: It does the predictive index give you indicators of whether or not they are lifelong learning types of personalities?

Andrew: it’s a pretty good exercise indeed, that they have a cognitive assessment that we have people take. And it looks like they’ll tell us, like how quick they’ll learn something new. you got to be careful. You don’t get too high because they’ll get bored. Right? You want to find that right range for each job.

Victoria:

Andrew: And the training that it doesn’t it doesn’t talk about that. I think the other question mark was was a good one about the frustration of carpenters. It had to come to yes. It’s frustrating to take time training people that have to be okay. And we have your position team to say, hey, I would rather take that extra time to train that person because we’re building, we’re playing a long game.

Andrew: We’re not just a short game like Quick Profit right now. We had to back up and say, someone’s gotta make an investment. Let’s be like, yes, let it be us making this investment. And what I’ve discovered is when we make an investment, we’re invested in people that are loyal, and they stay with you in about this, and that is moving to the next job.

Andrew: That’s it. You just got to stay in front of it. So I found that we have the same kind of pay scale, so we’re always there. We take payoffs off the table. I don’t like I subscribe to, like, what is the current trends and pay people. I know right now I’m increasing pay by 6 to 11% for each position, because I don’t want to lose great people just because I didn’t keep up with, their pay.

Andrew: And I try to tell them, like, we, we want, we want you to be the highest paid in our industry because we should be the most efficient at what we give them. And that’s what we do. And so we are. And we should be able to pay you well.

Victoria: So does that mean that you will build in. Cause I’m sure your, your carpenters, your field people are trying to hit certain goals for all their jobs. So do you build in extra time for them for specifically for training so that they don’t go over budget. And it’s not a frustration from that point.

Andrew: Yeah, it’s the early on. It was it was just a couple months. We start to get our, new KPIs. we’re starting to be able to use some of those things when we’re estimating jobs going forward. It’s becoming more accurate. It was early on that we we could see some money into this program to the best.

Andrew: but I think what’s interesting is, we got payback times ten in profitability because what’s interesting is you create this culture of engagement in your employees and they produce so much more efficiently. Yeah, I think I think that people are probably 12 to 18% more profitability because of the engagement and the productivity of our team. And so we create cultures like that.

Andrew: And you invest invested. It took a long time to five years, I think, before we really started seeing noticeable change in our bottom line. So it’s actually becoming more profitable now, I think a long, long haul, the long investment payoff.

Mark: Hi, Tim Fowler here. And if you’ve been listening to this podcast for a while, you’ve likely heard about our roundtables program. Well, I’m here now to tell you that we have a very similar program for production managers, if you’re not familiar with it. A few years back, we took the roundtables concept that’s been so popular with Remodelers advantage members, and we started groups specifically for production managers, very similar in format to what the owners are doing, but focused on production issues and really diving into the best practices among some of the best remodeling companies out there.

Mark: We meet twice a year for two days. At each meeting, collect and discuss performance metrics for each company, and we support each other throughout the year with what we call is micro boards. Smaller groups of peers who meet monthly via zoom to discuss issues and ask for input. So whether you are a business owner looking to improve your production team or a production manager that might need more help taking your department to the next level, we have a spot for you if you’re interested.

Mark: If you’re interested in learning more, email me at Tim at remodelers advantage.com and I’ll tell you all about it.

Victoria: Do you think you could delve into a little bit the the concept of finding out if they fit your culture and the kind of value based interview questions you use?

Andrew: Yeah, that’s just me. Like I, I’m searching all these interview questions, really. It’s getting to some of our core and our who we are. me and my brothers really come from a small town. My dad was a, usher body shop owner, and he still has value of small towns. Like, hey, guys, you have one reputation, you know, do with integrity, but with moral standards and something like one of the biggest questions when we’re looking to hire people.

Andrew: So we want people that have integrity, that really, show up, do what they say. They’re going to do, have a moral character about them. We we look at responsibility as another value. We don’t like people to blame shit. And so kind of how we how we ask questions around some of those values, is I’ll give you one example, we say, tell us about two memorable projects, one success and one failure.

Andrew: What would you attribute the success to and what would you attribute that failure to? And as people are working through some of these questions, it’s where I’m looking for us to reveal how they handle, failure. was responsible for that. who’s responsible for that success? And you certainly allow that to be value based questions and interviews.

Andrew: And so all the way through that process, over the years, I’ve worked on these questions to be able to kind of say, like, you get one hour. Yeah, to to invest. And I have a decision this one hour. So it’s a complicated mostly do interview. It’s like, well, I’ve never experienced anything like that. I usually tell people I just like the best way to get through this interview is just be honest, because a lot of people try to look for like, what are you looking for?

Andrew: And you can’t tell you what you want to hear. And, we try to get rid of that. just by our question, I just saw me do the predictive image assessment. Right. I kind of know how they’re going to perform on the job. I know that more than 80, and so once that’s out of the way, I can look at searcher and I can ask questions around those areas that are really important to us, to our culture.

Victoria: So how long that thank you. That was awesome. Now, if let’s say you hire an apprentice right now, how long is it typically until they’re able to handle a project on their own or that sort of thing?

Andrew: Yeah. Well, part of that depends on the person. It depends on their cognitive learning skills, how quickly they’re able to learn new things. typically we like to see it takes about a year to get that eager. and then in that second year, at the end of the second year, they’re, they’re ready to take projects on their own and start to knock on projects that they’re able to, like, be left out in the field, take the vehicle, fix this problem at this house, or solve this, issue, or put up that, you know, that wall or they can do that.

Victoria: Okay. All right. Great. It’s been awesome.

Mark: Andrew. We we don’t have an hour. We have 60s to learn all we can about you. And we call it the Lightning Round. Are you ready for that? Okay. And now here’s a remodelers advantage. Lightning round. It’s a drop. All right, 60s are going on the clock. Here we go. What is your favorite business book and why?

Andrew: every Good Endeavor by Tim Keller. because it ties our work to God’s creation.

Mark: If you weren’t a remodeler, what do you think you’d be doing?

Andrew: would be a consultants, or a pastor.

Mark: What do you not very good at?

Andrew: details, managing a lot of details and better at a big picture.

Mark: And your room, your desk or your car, which would you clean first?

Andrew: my room. Because I love my wife. And you.

Mark: How many pancakes do you eat in a year? I can name a movie you’ve seen more than ten times.

Andrew: we had a nice, good one.

Victoria: No one’s coming out soon, isn’t it?

Mark: Some day.

Victoria: And this has been great. It’s been a little challenge getting us all together here. I’m really glad it worked out today. And it was a pleasure meeting you. Now, before I let you go, though, one of the most important parts. So I want you to share your five words of wisdom with our listening audience and why they resonate with you.

Andrew: Thank you. Yeah. I think stay humble would be the words. And I think they resonate with me because starting a business has very prideful, arrogant. sure. And I didn’t think I could learn from anybody. And so I just drove and really driven and focused and I think over the years, you start to grow in humility and you start to see other people more valuable, and you start to really learn and start to understand people who appreciate people.

Andrew: You become, harder to offend. I think this is one thing when you really care for people and, you know, this is I think there’s, the more the wise you got, the less you know it, less you think you know, and you just passively are all learning. So I think humility, stay humble will be something that I gotta tell myself all the time.

Andrew: Not think of nothing to validate myself.

Victoria: All right. That’s great. Good. Thank you so much. This has been wonderful. I really appreciate you doing this. And it was great meeting you out in Minneapolis. You and your brother Paul and, you know, it was good stuff. Thank you so much for being here. We appreciate it.

Andrew: Yeah. Great. Thanks. Nice to meet you, Mark. And. Yeah.

Mark: Thanks, Andrew.

Victoria: That was really interesting, wasn’t it?

Mark: It was really cool that so many people, love to train in his company.

Victoria: You know, I think that the one statement he made that resonated the most with me was that they’re looking at the long game.

Mark: Right? Yeah, that was definitely, the ear perk up thing is, you can’t be focused on on what’s right, right in front of you.

Victoria: Yeah. And, you know, you hear I hear so many remodelers complaining about we can’t find anybody that’s got the right attitude. They don’t show up. They don’t, you know, all those things. So obviously they’re not putting as much emphasis on training for the culture as Andrew and his brothers are.

Mark: Well. And, and training for, for everything. Right. And just a culture. But right. Everything. I think that really helps his. He said it took about five years before he started noticing it. But you know, people, people that you’re you’re bringing up through the ranks, they’re going to have a connection with, with you and your company, and they’re going to think of it as a home.

Victoria: Well, did the even the even not, I guess, better. But another awesome piece of that is the additional profit that is generated through making this investment right?

Mark: I know that was a huge thing because they’re more more efficient and just stronger team. Yeah, it’s not all.

Victoria: Fuzzy and oh, it’s practical right down to the bottom line stuff.

Mark: Yeah. Yeah, it was really good. A lot of good tips in there I wonder I wonder how many people are going to give it give that a go because I think they should.

Victoria: I’m thinking about how we can implement it.

Mark: Right. I know, I know well that was great. We want to thank Andrew for taking the time to share what his secret is to all the awesomeness he’s got going on there in Minnesota. And we want to thank you for listening week in and week out. I’m Mark Harari.

Victoria: And I’m Victoria Downing. See you next time.