David Hayes

David is one of the original founders of Skyline Construction. In 2004 he assumed the role of CEO and in 2005, restructured Skyline as a 100% employee stock ownership plan (ESOP) and established a system of open book management. As CEO, he develops and maintains client relations and is responsible for strategic planning, company vision and financial decisions.
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Why is the US not fighting equally hard for families?

Posted by David Hayes on Mar 13, 2018 1:15:22 PM
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International Women’s Day inspired me write about women in construction, but that sent me on a different path that encompasses not only women, but families as a whole, and the support system that our country provides to keep highly skilled and intelligent individuals in the workplace.

The US government hasn’t decided to prioritize and invest in its own citizens who want an equally prosperous life – families. Families with children have to choose between not returning to work or paying exorbitant childcare costs. Why?  The US government offers a measly $5k child credit in the new tax law. Big deal, $5k buys you childcare for one or two months only.  Why not offer $24k-$30k per child in credit or make childcare costs 100% deductible?  Let’s invest in our most educated resource – our workforce.  A tax credit means you have to earn money to get it, and both women and men want to work, thus will earn more, pay taxes and can use the credit.

Did you know 57% of students in college and graduates are women?  Yet after having a child, many families must make the difficult choice for one of the parents (in most cases, women) to stay home over returning to work due to the cost of childcare. This means we have a country where around 50% of our highest educated people are leaving the workforce.  If the key to a balanced and successful country is getting its citizens educated and contributing to the economic engine, why are we forcing families to remove one educated job participate from the economic machine? Why are we forcing them out of work when we need all the talent we can get?

Laws have improved giving both mothers and fathers more time off to bond with their babies but more can still be done. We need tax laws that support women, men and families and make the financial burden of childcare costs go away.  If we do not push our legislatures for it, we will continue to lose our highest educated resources.

 

Women in Construction

When I became a partner at Skyline in 1996, it was a newly-founded company. There were no women in our project management department. ZERO.  22 years later, 25% of our project management group and 40% of our leadership team is comprised of women.  We are about to appoint our first woman to our board of directors, Jessica Carps, and we are a better organization because of this depth and brain power.

 

What are we doing at Skyline to foster women in construction?

Twice per year we evaluate the salaries of employees to ensure that women at Skyline are consistently compensated with their male counterparts and make necessary adjustments to level the field when discrepancies appear. Last year, the Skyline Women’s Network was created to promote and support inclusion within our organization.  We are also trying to take matters into our own hands in terms of supporting our talent pool by developing a “menu” of benefits that allows every employee to select the options that are pertinent to them based on their stage of life–this includes providing financial aid to offset childcare costs.

Topics: women in construction, workforce, childcare, costs, cost of living

Why you need to be a millionaire to survive retirement

Posted by David Hayes on Jan 17, 2018 9:21:09 AM

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Some people say, “I love where I work.”

I say, “Great, but does your work love you back?”

How does a company show love?  They look after your current and future financial well-being. If the love was truly mutual, your company would offer great pay and benefits AND take care of you into your retirement years by creating a long-term compensation plan. In most cases, the truth is that the love is not mutual, because such a plan equals money out of the owner’s pocket.  It’s simple old-fashion greed, and you will feel the wrath of that greed once it’s time for you to retire.


Planning a Future Beyond Survival

To retire and live a comfortable and healthy life, the conventional wisdom is that you will be living on 70-80% of your current income and you need to have a total nest egg of about 10 -12 times your current salary—which basically means, yeah, you’re going to need to be a millionaire to retire comfortably.

National surveys recently shared in the Orange County Register demonstrates that only 8% of the population has a net worth of $100,000.

And only 2.5% of the population has a net worth over $1 Million.

Avoiding some tragic event, you will turn 50, you will turn 60, you will turn 70, 80, 90 and hopefully 100 years old. The reality of the situation is that once you pass age 65, staying employed is tough. So for most of us, ages 65 -100 is a time in our lives where we must have reserve funds to survive because it’s unlikely we’ll be able to earn.  If you’re not planning for this at 25, 35, 45 and on, you’re crazy!

But for most humans, ages 25 through 45 is simply about survival: paying the bills, saving for a home, paying off student loans, getting married, having kids, saving for college, and more. Retirement saving during these years usually consists of a 401k and any match your employer offers, but guess what?  It will NOT be enough, even with normal compounding of annual returns and even if social security continues (fingers crossed). You will need more, a lot more. So where can you get it? Well, a second job would help or the far better option is to find a company that offers a long term retirement plan for its staff, paid for and vested by the company.


The ESOP Way (Employee Stock Ownership Plan) VS. Everything Else

Skyline and a handful of others in the construction industry are ESOP companies, which are 100% employee-owned and issue company stock to our employees. This is important for your future because it serves as a supplemental retirement fund at no cost to you. It’s FREE MONEY.

I’ve worked for privately held S corporations & LLC’s for the majority of my life, sitting in both the employee’s seat and the executive’s seat. Believe me when I tell you that it’s extremely rare that these types of firms give a damn about your retirement. They’re offering retirement benefits to check the box and to remain competitive. They’re not evil, just greedy. After all, it’s their own money keeping the company alive and they pay big taxes on the profits, so they want to keep whatever profit is leftover.

When I became CEO at Skyline, my plan was ESOP or bust. I’d rather make 100 people millionaires, than make 4 partners worth over $25M each. This is simply better for society, and we’re in need of some strategic social financial thinking these days to solve long-term problems. Our employees enjoy ESOP stock, 401K contributions with a $6,000 company matching plan and annual profit sharing that ALL goes into a long-term, tax-deferred retirement plan. The company provides 3 extra buckets of funds to help prepare for future retirement. This is how we share the wealth and show our employees that the” love is mutual”.

The average construction field or office worker makes between $60,000 - $150,000, depending on their position, years of experience, etc. At Skyline, our employees make those same competitive annual base salaries with the ADDED benefits of ESOP stock, profit sharing and 401k matching. That means over the span of one’s career, the average Skyline employee is making anywhere from $500,000 - $1.8 Million MORE than the average construction worker working elsewhere. Those not working in an ESOP company could potentially be missing out on a financially secure retirement. It’s costing people a fortune to work at a privately-held company and they just don’t realize it.


The Reality of Our Situation

I hear all the time from entrepreneurs and executives that “greed is good”, it drives the engine of capitalism. I agree, it does. But when supporting that greed means citizens are left behind financially and we, the taxpayer, have to support them, eventually it will crush capitalism in the form of super taxes. The United States is now in the phase of social capitalism, where companies can be greedy but must take care of their employees long term. Basic terms, we are back to the days where companies must help employees formulate a robust pension / retirement fund as part of their employment and it has to go way beyond a 401k match.

$1 Million to survive retirement. And only 2.5% of the population is there now, which means the remaining 97.5% of us will have long, hard, golden years ahead after working our butts off for the majority of our lives. This is why having something like an ESOP is so valuable.  It is an extra bucket of funds, on top of your 401K, social security and any other savings, so that you have a comfortable retirement.


The Million Dollar Question

So, will you be a millionaire? If you happen to work for an ESOP company, all signs point to YES.

Skyline has been an ESOP company for 12 years. Today, about 10% of our staff have retirement balances over $1 Million through a combination of ESOP stock, profit sharing, and 401k + company matching; 30% of our people have retirement accounts over $200,000; over 60% have accounts over $100,000 and the others are well on their way.  That’s over 70 people just at our company alone who fall in the top 8.5% of the United States.  

Can your company make this claim? If not, maybe the love isn’t mutual after all.

 

Topics: retirement, ESOP, salary, Construction Real Estate, construction career, career advice, career path, jobs

Culture is so much more than ping pong tables

Posted by David Hayes on Jun 6, 2017 10:49:21 AM

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Culture is a word consultants and CEOs use to label how they treat their people at a company. It is a business word, but it is not an action word, or a word that represents a true emotional buy in.

 

Culture Does Not Equal Amenities

These days culture replaces the word “amenities,” where CEOs and HR leaders provide gyms, gumball machines, beer taps, wine coolers, music rooms and call it part of their culture. These are amenities -- perks of employment to replace the old list of perks such as club memberships, expense accounts, sports tickets, corner offices, executive restrooms, etc.

 

Culture is Trust

The real key to getting people aligned and working as a unit is to build a company full of trust. The trust factor builds the foundation of a company’s culture and once established, all the other stuff gets loaded on to make your company unique and a fun place to work.  

 

So What is Trust?

Well first it starts at the top and must continue all the way through the organization, because wherever it stops, lies your pain point. Show me any organization where people are leaving the firm, and I will in turn show you a manager or leader that they just do not trust.  

Getting back to “what is trust?” It starts with the secret ingredient that every great leader should know and believe: everything is about “you” not “me.” Too many leaders and business owners actually believe leading people is about telling them what to do instead of empowering them to make their own decisions. Good luck with scale and trust with that strategy -- not happening.

A real leader believes in their core that “if I work tirelessly to make you great, you will trust me, and in turn, do the same for your staff.”  Accomplish this and the success waterfall is in motion.

 

Traits of Trusted Leaders

  1. Honest, they will be straight with you, whether the news is good or bad.  
  2. Reliable, they will find the time to help you.
  3. Balanced, they know humans have a life outside of work and that needs as much focus and time as work does.
  4. Experts, they know their stuff and can help you because their breadth of experience is something you seek.

Companies are a collection of human beings who are thinking and feeling with needs and desires.  Recognizing this and trusting each other is the key to a powerful workforce working in harmony with each other to build a successful culture.

Topics: culture