Adapting to the New Normal On Site
What does a safe jobsite look like during a global pandemic? The construction industry has experienced mass shutdowns across several regions in the US but work in the Midwest and the South has ramped up. Layton Construction operates in both regions and is currently working at record volume. On this episode, join Paul Drecksel, COO, and Jeff Beecher, EVP of operations at Layton Construction to hear how they’ve been adapting their safety protocols on site and in real time.
From mass shutdowns to jobsite safety concerns. The global pandemic has transformed construction as we know it. As the AEC community continues to navigate this unprecedented situation, we’re sitting down with construction leaders from around the globe to hear how they’re responding to these evolving circumstances. Welcome to STO Building Conversations, and episode two of the COVID-19 Series.
In this episode, we’re chatting with Paul Drecksel, COO, and Jeff Beecher, executive vice president of operations at Layton Construction to discuss the pandemic’s impact on the Southern and Western construction markets and how Layton continues to build safely. Thanks for joining us today and I’m looking forward to this conversation. So let’s get started. Most of Layton’s jobsites have remained open since the beginning of the COVID outbreak. What has it been like watching cities across the country? Shut down construction completely.
Uh, I’ll take that one, Amy, this is Paul and thanks for having us today. By the way, no matter where you live in the world, the pandemic has been a totally unprecedented event. So none of us have ever seen anything like this. Um, and it’s been a real learning experience, but as we watched it unfold in the United States, there really are two different stories that are vastly different experiences. We, we see television, um, other media showing us what’s happening in New York city and the Tristate area. And we also talked to our colleagues at STO regularly. And what you all are experiencing is exponentially worse than what’s happened to us. So first of all, our hearts go out to all of our STO colleagues. Anyone who has been ill had a family member be ill or worse, and all the folks who’ve just been totally shut down and not able to go to work and do what they do every day and have any semblance of normalcy in their life. So our hearts go out to you. Um, fortunately for us in our markets, it’s just been much more minor event while, while the disease is still just as dangerous, it’s um, prevalence and its impact on our day to day life is, has been much less. And so just for instance, March of this year was the highest revenue top line revenue month our company had ever had and April was even higher. And so it gives you a sense that very few of our jobs have been shut down by government order. We have had a few clients make the decision to, to slow their construction programs down, but obviously not in a major way given those sorts of, of numbers. So again, you know, as we, we realize how fortunate we are because it just happens to be where we’re at. But our thoughts and prayers definitely go out to each of you who are suffering in a much greater way than we’ve seen.
Thanks, Paul, for that. Um, and the more that we learn about the virus, it seems the more strict social distancing regulations have become, at least definitely here on the East Coast. How have you seen this progress on site for where Layton does business?
So, I’m absolutely, we’ve seen the same progression here during the past few months. So, you know, we continue to get new guidance for the centers for disease control, new guidance from local health authorities. Layton currently has about 150 projects going in 21 states. And so we’re obviously having to monitor a lot of input from local folks about what’s really happening on the ground in addition to what the national experts are telling us is important. We’ve spent a ton of time reading what the latest guidance is, trying to understand how to operate safely. You know, one of the things that attracted Layton to STO is that at STO safety is priority number one. And that’s always been our mantra. Layton, you know, we’re going to send everybody home every evening in the same condition they arrived at the jobsite. And COVID just adds this new layer of risk that none of us had any experience with. Unlike the normal risks on construction sites that we’ve all had decades of experience with.
Yeah. So as, as things have changed, we’ve, we’ve had to change too, and our culture has always been one of early adopters. So I think it’s, it’s been realized on the projects that as we need to, we need to adopt different protocols. For instance, you know, in the last little while we’ve adopted mock masks on all of our projects. Every individual wears a mask or some kind of face covering. And there’s really been no pushback at all in that workers realize that this is another step in making sure that we’re keeping a safe jobsite and they’re, they’re individually keeping safe. And so that’s been an easy adoption. Um, we ask five questions of every worker every day about the risk factors surrounding cope at 19 and they readily answered those questions, realizing that by answering, I think those questions were keeping the high-risk workers off the jobsite. So overall, as things have changed, the new protocols are put in place as a way to keep the jobs safe and workers relish that and adopt accordingly.
Thanks Jeff. Um, yeah, I mean safety is paramount obviously across the organization. So in addition to the masks that you’ve mentioned and, uh, questionnaires for screening, what are some of the measurements in addition to that, that Layton has put in place to enforce social distancing and general safety on site?
At the outset of this event, we were very fortunate in the sense we had a national client to has distribution centers that really became even more critical than it already was in terms of things like grocery deliveries to folks, uh, and, and prescription medicine delivers to folks and other necessities of life that as things started to shut down, it became clear they needed to be open and they needed more capacity. And so they were one that really ramped up what they were doing. And Baca, I remember the day it was March 18th, because it was the day Utah had a 5.7 magnitude earthquake early in the morning, which was on top of the pandemic hitting us was very unnerving day to say the least. And, um, later that day we had a, an eight-hour phone call with this client, with another respected, uh, you know, national GC/CM and with some experts, you know, who really understood infectious disease and measures that needed to be taken.
And we, we came up with the protocol because this client like us really views safety as priority number one. And so what they, the thinking was we’ve got to keep this business going, we need to expand this business because it’s really essential to the nation, but we want to do it in a safe way. We don’t want to get people sick as we build these things. And so what are all the protocols we can put in place? And this is really early when people really haven’t thought through these in great detail. And we came up with after, you know, eight hours of pounding this thing out, a really good set of protocols you can put in place that would keep people safe. And then couple that with our association with STO where we were on the phone regularly as BU leaders talking about the same topics, sharing what we’d learned. And that really got, got us off to a good start. And Jeff, you may want to talk about this particular step that we’ve ultimately taken on jobs.
Well, as Paul said, we realized early on that communication was paramount and making sure our people all understood what the protocols were. So not only do we have the business unit leader call each week to talk through these instances, uh, for a while at the start of the pandemic, we were having a call every day with our leaders in our individual business units. Then they were also having a call with their project teams. So there was communication up and down, back and forth. Well, some of the measures that were put in place during that time, uh, first off to communicate these protocols, we made sure that there were clear site sites throughout the project in both English and Spanish. Um, we divided up the trade partners amongst our leaders and had individual calls with each one of those trade partners, making sure they were bought into the protocols and making sure that they reinforced with their people from their company level.
The things that we were trying to implement. We set up handwashing stations that weren’t there before. Making sure that there were social distancing between the hand washing stations and the porta Johns, making sure that people had access to hand sanitizer, uh, both in the, on the jobsite, in the, in the trailers. And then in the offices. Proper social distancing had to be enforced. And, and this included in lunch break areas and areas where we would have typically assembled. Um, and this, this enforcement had to take place by making sure that our project teams were on the jobsites. Uh, we’ve always maintained it. The management of the project can’t be done and if the trailer we have to be out and amongst the people. And, and that was reinforced over and over again with our folks. Um, another step we took was make sure that our in person meetings were, uh, drastically reduced to the extent possible.
The only times we would have an inverse of meeting was if we could have it in a location where we would have proper distancing. And so for instance, a room that would hold, uh, you know, 50 people before now we’d have the maximum amount that was posted for that, for that room would be maybe 10 or less depending on the configuration of the room.
Uh, we made sure that people took the personal things that they have home at night, so they were in their control all the time. Mmm. A pretest plan has always been important. But another protocol we put in place is when we review pretest plans, we make sure that the individual jobs can be done in a way that’s safe from a social distancing aspect. And if it couldn’t be done, then we talked through the proper PPE to do those tasks or we’d take the task out of the rotation and do it in a later time. But then finally, I know these are, this is a long list and we’ll probably not covered all of them, but we stepped up the cleaning that was taking place on jobsites and also put, uh, cleaning companies on notice in case we had to come in and do extra disinfection. All in all, um, through doing these things. And like you said, it changed as time went on and, and as we needed to adopt new ones, we adopted new protocol.
Right. Absolutely. Thank you for all of that. I mean it is a lot of, you know, additional things to be mindful of, but it sounds like people are together on it and willing and able to do so to provide safety. So that’s great. So switching gears a little bit, I mean you’ve talked about a trade partners and communication, which is of course strengthening those relationships as well. But how have you seen the COVID-19 pandemic affect the supply chain in your markets and if you have seen an impact, how do you see this impacting project schedules and costs?
So, we’ve been very fortunate in that we haven’t encountered anything that’s then insurmountable. We’ve seen some areas where some long lead items from overseas I’ve been delayed, and we’ve been able to either change that material or keep it off the critical path. It will certainly change as time goes on. And one of the things that we may talk about later is it’s just the fact that owners may look at overseas materials as being more risky and not only the risk and getting them in time, but also the increased cost because of those risks. The other thing that we’ve seen is tasks that have been outsourced to companies outside of the U S for instance, steel detailing that might be done in another country. Those have also been impacted because of their ability to work. But overall in our business we haven’t seen supply chain issues that we haven’t been able to find another way around. I’ll just add one thought there. In my discussions with the other STO
leaders of companies that, the analogy I’ve used for them as they’ve asked us about this is, you know, we, we never were shut down. And so we’re in line at the grocery store, you know, just the normal deal. You and your competitors and subcontractors will get a green light at some point and everybody will be running to the grocery store at the same time and then getting in the back of the line. And so I don’t think our experience is necessarily transferrable. You know, I don’t know how that latter situation would go, but it will be different. And so again, we’ve just been fortunate. We’re going just as normal and so we’ve got all our orders in the queue, you know, things are happening in a natural fashion and that’s made it easier for us. Um, we really have had minimal scheduling impacts. So there certainly are some inefficiencies with what we’re doing.
We’ve had to change the way we do business. You know, sometimes have split shifts or staggered entries to jobsites. We have some jobsites with as many as 675 trade partners on site every day. And so, you know, you have to take some special actions there to make sure you got multiple points of entry. People aren’t showing up at the same time. So, there are some inefficiencies. But generally, we’ve been able to hold to our pre [inaudible] schedules when we have encountered impacts. The key has been alert the owner quickly and it’s in keeping one of our mantras that Layton is constructing with integrity. And part of what constructing them with integrity means be honest and transparent and be really candid. Meaning even when there’s bad news, give the bad news immediately because the owner needs to have an opportunity to make the right choice with all the information in his hand. And so we, we’ve been doing that on the scheduling issues. I mean, when they do arise, we immediately notify the honor, we start talking about potential work arounds or at least setting expectations that are realistic with the situations we’re facing.
Well and I will say just to add to that too, we make it seem like there’s no issues but there’s no issues because we’ve increased the amount of questions we’ve asked about our supply chain. And so a robust system was already in place, but we’ve increased that to make sure that we’re not going.
That’s a great point.
Um, through this too, obviously as you’re participating in hearing what’s happening in the other business units, you know, as the Northeast and Northern California begin to reopen, have some of those business units been reaching out to you seeking advice on how to run safe projects under these conditions? Cause, like you said, you have never had to shut down like offices on the East Coast. You’ve had to adapt and input in new protocols. So has the reverse been happening as well, that folks have been taking advice from you on, you know, how you’re still maintaining and being open?
Yeah, absolutely. Um, put it in context to this point in 2020, we’ve worked 1M more hours, so we’re at 6.6M subcontractor hours, worked on jobs largely through the pandemic. Um, so I feel like we’ve seen every issue you can see. But I say that tongue in cheek because eight times a day I get a phone call often late at night, we’re on a Sunday. That isn’t a situation we haven’t seen before. I mean they seem to be limitless. And so, when we have these STO, the BU leader calls I have, I have really tried to impart our lessons learned and tuition paid to say, look, we’re working at a breakneck pace in light of this. And, and I’m very proud of the safety record we have, which remains job number one. And it’s not possible without our teams executing our protocols, subcontractors buying in and owners buying him.
You couldn’t do it without all of those things. And I could not be more pleased with the subcontractor contribution the owners buy into safety and then our team’s ability to execute and be nimble, which you have to be in the situation cause it changes every week, you know, the guidance changes and you have to be listening, learning, studying and reacting. And so I’ve been trying to provide that information every time we come up with a new protocol, send it along and it’s been in the reverse. Also, STO has put some committees together that are doing these same things. They’ve been providing that information to us and it’s been very helpful.
Great. So, another part of the operation here, which we haven’t spoken so much about is the office staff. As we understand it. Layton’s office staff have been working from home for the last few weeks and talk about that transition. Was it difficult to do? What is the status of reopening the office? If you can talk about that, that’d be great.
Yeah. So we closed the offices about the middle of March. In fact, it was, it was just right after the earthquake that Paul talked about. And at that point we asked people to work from home. And anytime, you know, you change the, the routine, that’s going to be a challenge because people are creatures of habit and we’re a relationship business. And so suddenly taking that away and having everybody work at home is going to present some challenges and we’ve seen that. But we have a lot of folks to travel or national business. And so our systems have been set up over the years to handle the ability to be mobile. All of our people have laptops. Most of our systems are cloud based. In fact, all of our systems are cloud based. So the ability for us to work remotely, it was very easy from the standpoint of infrastructure.
But when you take an estimator out of his area of work and put ’em in a, in his bedroom at home with his kids and the next room, um, that presents some challenges. And yet we’ve still been able to maintain, uh, uh, my productivity despite those working environments being different. And I think one of the keys to just doing that is increasing the level of communication between our work groups. Normally you’d walk by somebody to have a conversation and that, that is not there anymore. And so you have to make sure you call those individuals. And, and one thing we’ve seen is, um, it’s a more formal kind of situation where you have to set up a meeting sometimes, so talk to three people or you, you’re on the call with someone and you say, well, let’s add this guy and that’s not that person. And pretty soon you’ve got a conference call going. And so those things didn’t take place as much before checking in with people and just making sure personally they’re okay and their situations all right. We’ve increased that to make sure that there’s a personal touch to it. And obviously the office is open, but we’re asking people to work at home as much as possible still. And I’m sure that will change over time as we phase into different areas of risk.
Right. Um, Jeff mentioned previously that his COVID-related issue, phone calls that were daily at the beginning and now become less frequent, but they’re still on a regular basis. And so I formed a covet task force early on and it’s comprised of every leader of every division in our company and anyone who runs a department and we talk weekly. And one of the questions I always ask is how is the working from home scenario going? How is productivity? How is morale in January? The reports have been really very favorable in terms of people remaining productive. Um, there are certain tasks we’ve learned. You must come into the office for, you know, if you’re submitting a proposal and there’s a deadline, you can get yourself in trouble if you’re trying to do that from home. So that’s one area we’ve asked people to come in on the day that they’re doing that. But generally it’s been good. We have learned though that especially with younger and less experienced employees who need a lot of mentoring and guidance, you gotta be checking in constantly. And then the other comment I get is don’t let people be isolated and feeling like they’re on an Island. And so just the communication from a human being perspective, genuine care and concern just to see how people are doing is absolutely critical.
Absolutely. Well, we do a lot of, uh, proposal and presentations and before this all, you know, it was a, it would be a personal interview. You’d have a team of individuals interview in front of a, a team of owners and we’ve continued that, but it’s all been video calls. And so that’s taken on a whole different perspective of getting prepared for that and then having the actual call and doing it in a professional manner. And we’ve had great success at that, but it hasn’t been without a lot of effort.
Right. Um, as I understand that they’re, the preparation and additional steps that you’ve gone through has been successful because there’ve been some really great wins that have come through that. And, um, I know on the East Coast we’re also doing some virtual presentations and you know, it is a different way for delivery and trying to be able to engage and present, you know, our best and brightest for an opportunity. So it’s, it’s another challenge in a different um, avenue.
I guess a little bit broader now, we’ve talked about a lot of um, different topics. Is there, it’s been the most challenging aspect of operating during this time. Obviously there’s a lot of them, but is there any one or two things that really comes to the forefront of the greatest challenges for you all?
You know, you have to assess it in context and I would say that the highest level, the biggest challenge has been, as I mentioned previously, we’re working at a record high, you know, the Layton is almost 70 years old and we are at record high volumes of work all over the United States and that would be tried under the best of circumstances, right? You’d be stretched to the limit. Now pile dealing with COVID-19 and really taking seriously the idea safety is priority number one and it comes before anything else. And then feeling an obligation that you cannot let someone get sick or worse because you failed to do something you should have done. And so, you know, you pile all those together. And I mean, honestly at times it is spelled back-breaking because it’s, it’s just, I mean, as, as Bob Bowen said to me once, there’s just no playbook for this, right?
And you read what the experts say and it does change. You know, sometimes you wonder, does anybody really know what it is we should be doing? But having said all that, if you read, if you study, if you plan, we’ve had really good results. Uh, you know, our, you know, generally when we’ve done mass testing on jobs, we are always at or below community transmission level and you really, you really can’t do better than community transmission. So if the local infection rate based on tests is 10% you’re going to have 10% of the people on your job who are infected because they’re spending 16 hours a day away from the job. And so I remind our people that all the time and say, look are, we’ve got a bunch of awesome protocols in place to try to keep high risk individuals off the job. But the other thing we’ve seen in our testing is the majority of folks who have it are asymptomatic and remain asymptomatic. And so those folks are going to be on the job. You can’t make that not happen. So what we need to do is make sure it doesn’t spread and this means we have to really religiously follow our protocols and I couldn’t be prouder of our guys for the way they’ve done that.
You know, Amy, just to add onto some of the challenges that we have through this whole event to continue to manage the high volumes, we continued to hire and it’s a whole new thing to hire an orient people in a situation where you really can’t have a lot of contact. We have a culture that late, we call it the Layton Way, our culture is very family focused and personal and it’s very difficult to teach that culture when you don’t have a lot of interaction. And so that’s one of the things that we’ve experienced that’s been difficult. Um, it’s been a challenge.
I would just add one last thing to this topic and it just is, you know, we remind ourselves all the time. We can’t, you know, we’ve had great success in maintaining safety, but we can’t let our guard down because we’re not out of the woods and we all have to keep taking this absolutely seriously. And working together and making sure that we’re following the best evolving protocols, taking advantage of lessons learned and follow the priority number one for both STO and Layton, which is let’s send everybody home every day in the same condition they arrived at the job that morning.
Right. Absolutely. And that’s a great point, Paul too. As far as, um, we cannot let our guard down even as communities and areas outside of your regions start to open up and still, you know, maintaining certain protocols, guidance and that high level of attention to all of these areas are going to be key for successful recovery. Um, so my last question after we’ve gone through a lot of these different topics is: in your opinions, what do you think will be the lasting impacts of this situation near term and long? Do you have thoughts on that?
Yeah. You know, after you’ve been in the construction industry for decades, you start to think you’ve seen it all, you know, that you wouldn’t be surprised. This is so unprecedented that it really requires a lot of creativity and innovation and careful business management to chart the waters that we’re in now. Um, some of the things that we see, we talked about it before ordering materials from overseas. It might be more hurdle than it’s worth. And so that’ll be something that we’ll have to talk with owners and designers about. Um, we see maybe more video conferencing taking place, less in person meetings and less business travel. Obviously in our business we have to be on the jobsites and so we will continue to travel and visit jobsites. But I think overall you’ll see less business travel. Um, will the density of office space be lowered because of this? And, and certainly the way that people work in an office will change. Uh, and, and similarly jobsites. Um, we typically have a huddle every morning with, uh, with the entire jobsite, which we’ve changed, but that will likely be lasting.
And let me just pile on that and just say, if you’re looking at this from a business case perspective, there are going to be a lot of impacts on what’s getting built. The key to success for STO and for Layton and is going to be viewing that proactively being nimble and adjusting, uh, to stay safe and to be successful. You know, there, there’s no saying that says every challenge creates opportunity. Well, this is a huge challenge and there are going to be huge opportunities, you know, as we get through the worst of this and get to a place where we can get everyone back working safely and, and I have a lot of confidence in this organization that we’ll be able to do that. I guess the point I would end with is just when we as Layton and merged with structure, tone, um, just several months ago, it seems like 20 years, but it’s been five months.
Um, I’ve aged 20 years. But we did it for a lot of reasons. One is shared culture, um, you know, honesty, integrity and transparency with clients and trade partners. Very impressed by that and the adherence to absolute safety on jobs above all else that was important to us. And there were a number of other things, but one aspect of the business that really intrigued us was the issue of diversification. So we’re diverse. We have six different, what we call strategic business units. They work in different parts of the country, they often deal in different market sectors. And it’s been good for us over the last, you know, 60 years to remain diverse and be able to weather downtimes and the STO business has been built on the same model, you know, spread across the country, very different divisions doing different things in different places. And we viewed that as a huge positive.
And the one thing that pandemic has driven home to me is we were right because you look at what’s happening right now in one section of the country has just been hammered by this thing while other parts have been allowed to continue moving. And you know, here we are, record volumes were dropping all this money to the bottom line, which will be a nerd of the benefit of the entire STO organization. And next time it may be a whole different thing where there’s some major recession and the only thing that’s happening is tenant improvement work in places like New York City in the Northeast. And we look at that diversity and we say that protects all of us. And it just, this experience as miserable as it’s been has just reaffirmed to me that we made a really good decision. I could not be happier to be part of the STO family.
Great. This has been such an interesting conversation with both of you today to hear your insights and thoughts on how Layton has adapted through these challenging times. I also personally echo that having Layton as part of the STO family is an absolute wonderful addition to our collective group of companies and we’ve learned from each other and continue to progress successfully ahead. Um, so I want to thank you very much for your time today. Always a pleasure chatting with the both of you and, um, be healthy and be safe and look forward to talking with you again.
Thanks for having us, Amy.
Thanks for listening. For more episodes like this, you can find STO Building Conversations on Spotify, Apple podcasts and the structure tone website.