Running a multi-billion dollar contracting business is not for the faint of heart. Financial, technical and even political challenges are business as usual for this select group of individuals; but at the end of the day, it’s a simple concept that’s keeping these companies at the top of On-Site’s annual Top 40 Contractors list.
“It is a total commitment to serve the clients’ needs, all of our clients,” emphasizes Aecon president John Beck. “So what we have been doing is diversifying our capabilities by expanding
geographically.”
Aecon has been achieving this diversification through what Beck describes as “organic” expansion. In other words, following its clients and making sure that they have access to all the construction capabilities they need across Canada. In areas where appropriate, No. 2-ranked Aecon has accomplished this through acquisitions.
Paul Douglas, president of No.1-ranked PCL, is also quick to credit a client-focused approach for his company’s long-term success.
Roughly 90 per cent of PCL’s 3,600 salaried employees are owner/operators that represent the company across Canada with the same consistent code of conduct, ethics and culture that has been upheld by PCL since its inception in 1906.
No. 3-ranked EllisDon believes its clients are best served by maintaining good relationships with trade contractors, suppliers, consultants, owners and labour forces.
“They always have to be able to look at you at the end of the day and know you are someone who will treat them fairly,” says Tim Smith, EllisDon’s senior vice-president, Toronto area.
He explains that the company’s culture, which emphasizes project first and process to follow, is dependent upon these strong partnerships. “We understand our place in the whole development scheme, and that is as the catalyst to get the project up and completed; so the end user, whether it’s a hospital or a commercial developer, can get its tenants in. That’s our role. To get it up in good quality, in a good time frame that they can count on with some certainty on price.”
People first
Culture and client focus are key, but without the right skilled trades people for the jobs, the construction sector could be in big trouble. Our top-three companies cited the impending skills shortage as one of the biggest challenges they are facing.
As such, employee retention, succession planning and skills development programs are key areas of focus for the construction industry.
“I talk to CEOs from Newfoundland through to Victoria and their biggest concern is having the skilled workers that they’re going to need to build what we want to build over the next decade,” says Douglas.
Savvy contractors have been aware of the impending labour shortage for some time and are already developing the next generation of skilled workers. Their initiatives include apprenticeship programs, recruiting co-op students, fast-tracking young managers and partnering with the labour unions and post-secondary institutions.
However, skills development alone may not be enough. Aecon, EllisDon and PCL have differentiated themselves by finding other ways to attract highly skilled and ambitious young workers. Repeatedly gracing Canada’s Best 50 Employers list, these contractors understand that it takes more than a paycheck to retain good people.
They offer salaried employees an opportunity to buy stock in the company, flexible hours and strong healthcare programs. They also create a corporate environment that promotes environmental sustainability and strong community/charity involvement.
For example, Aecon offers a scholarship program to help support the education of its employees’ children. The hope for this initiative is that it will foster good will in those future graduates and they will consider Aecon when they are ready to join the workforce.
Foreign competition
The looming skills shortage is not the only challenge tangling contractors sheets at night; uncertainty surrounding foreign competition is giving these steadfast executives due cause to toss and turn.
“It’s good news and bad news,” sighs Beck. “First the bad news: We don’t want governments or even the private sector to consider working with companies that have no experience on the ground here in Canada.”
The good news, however, is that in order for foreign companies to gain the necessary experience, they need to partner with Canadian contractors. “We welcome those partners,” explains Beck. “In fact, we’re partnering with a lot of them today. We think they bring a lot of experience, skills and a different way of looking at things. And, sometimes they bring money in these public-private partnerships—that’s all good, and that’s welcome.”
Across the industry there’s some concern about inexperienced foreign firms coming in and winning projects, but Smith is quick to point out that no one wants a closed-border environment either. “We wouldn’t want to have that imposed on us if we were to go abroad.”
And going abroad is exactly what PCL was recognized for when it picked up the International Business Award at the Canadian Construction Association’s annual conference back in March. The company has been involved with many large-scale projects in Australia, the U.K. and South Africa.
Great expectations
There’s little doubt that large-scale projects and public-private partnerships (P3s) are exactly the kind of jobs that are most attractive to Canada’s leading contractors.
“P3s are a big part of our growth market,” says Douglas. “And we took that same model to Australia and we were successful on our very first foray into that country.”
Although more and more P3 projects are steadily coming online, we also asked our Top Contractors what other specific business areas they expect to see growth in this year and in 2013. The three key areas they cited are: oil and gas, design-build and mining construction. More than 77 per cent of respondents expect growth in the mining sector for 2012 and 83 per cent for 2013. Design-build project expectations come in at 68 per cent for 2012 growth and 74 per cent for 2013. Finally, 64 per cent of contractors expect an increase in oil and gas projects in 2012, and respectively 77 per cent in 2013.
There are still challenges out there; but overall, contractors are in a much better place than they were just a few short years ago. It’s a luxury in this industry to face impending challenges, rather than having to react to excessive demand or economic crisis.
Beck sums it up best: “It’s better to have a steady stream of growing business rather than these great big booms and then the bust we had in 2008. I like the idea of ‘steady as she goes’ development in Canada, and all the support systems that go with that—Steady Eddie over the long term.”
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TOP 40 Contractors:
Company 2011 ($M)
1 PCL family of companies $5,500
2 Aecon Group Inc. $2,896.2
3 EllisDon Corp. $2,650
4 Graham Group Ltd. $2,010
5 The Churchill Corp. $1,409.2
6 Carillion Canada Inc. $1053.3
7 Pomerleau $1038.0
8 North American Construction Group $1,000
9 &nbs
p; Bird Construction Co. $947.5
10 EBC Inc. $670
11 Bondfield Construction Co. Ltd. $665
12 Clark Builders $522.5
13 MC Group: McKay-Cocker, Magil, Task CM $425
14 Flynn Canada Ltd. $390
15 Taggart Group of Companies $338
16 Transelec/Common Inc. $315
17 The State Group Inc. $300
18 Con-Drain Co. (1983) Ltd. $291
19 Pennecon Ltd. $267.6
20 Maple Reinders Group Ltd. $243.5
21 Thirau Ltée $233.2
22 Quantum Murray LP $224.5
23 Dawson Wallace Construction Ltd. $195
24 The Collavino Group $193
25 Buttcon Ltd. $190
26 Triamico Development Affiliates $179
27 Chandos Construction Ltd. $175
28 Manshield Construction $165
29 Delnor Construction Ltd. $156.5
30 MADY $148
31 Avondale Construction Ltd. $147.8
32 Scott Builders Inc. $137
33 Alberici Constructors, Ltd. $135
34 Yellowridge Construction Ltd. $126
35 Marco Group $117
36 TESC Contracting Company Ltd. $110
37 Metro-Can Construction Ltd. $100
38 Bot Construction Group $98
39 Harbridge & Cross Ltd. $80.9
40 Elan Construction Ltd. $78
Based on written responses to research conducted by On-Site.
Some contractors declined to participate in this research.
