Magazine article Workforce Management

Dedication to DEVELOPMENT

Magazine article Workforce Management

Dedication to DEVELOPMENT

Article excerpt

Washington Group's $50 million-a-year investment in the future of its workforce

As the new president and CEO of Washington Group International, Steve Hanks recalls 2001 as the year he was buried in financials. He had the monumental task of getting the Boise, Idaho-based engineering, construction and management services company out of bankruptcy and turning it into a profitable business.

"People didn't know if we were going to make it or not," he recalls.

Then he heard that Washington Group had been awarded two contracts-each worth more than $500 million. He was speechless. He immediately got on a plane to thank the clients in person, but also to ask why they had chosen Washington Group when there had been so many other good bidders whose future was so much more certain.

"I will never forget what they said to me," Hanks says. "They told me 'We didn't hire Washington Group because of its balance sheet; we selected you because of your people.'"

That was the genesis of Washington Group's top-rated, $50 million-a-year employee development program-no small chunk of change given that the company's annual after-tax income at that time had never exceeded $46 million.

In the past two years, the company has spent more than $103 million developing workers. Since 2002, its net income per employee has jumped 60 percent. And for 2005 the company expects, based on third-quarter guidance, to report net income of $55 million to $60 million, exceeding its goal of 10 percent compound annual growth, Hanks says. Ninety-five percent of its customers are repeat clients. The firm has seen job applicants jump from 2,000 a month to 5,000. And in 2005, Washington Group was named one of the top 20 U.S. companies for leaders by Hewitt Associates, joining the ranks of General Electric and Johnson & Johnson.

Washington Group's investment in employee development shows how recruiting and retaining top talent are crucial for success in an industry faced with an aging workforce, increased competition for skilled employees and an unprecedented demand for work. Because many of the company's 25,800 employees-including 2,330 in other countries-work in hazardous conditions, such as handling nuclear waste or working in hostile territories like Iraq, the firm has to do more than the average employer to retain and develop its workforce.

In the past 28 years, Hanks has seen firsthand what good mentoring can do for an employee. In 1978 he joined Morrison Knudsen, which later was acquired by Washington Group, as a law clerk. Today, the 55-year-old top executive is involved in every day-to-day aspect of employee development, from going over coursework to monitoring attendance and reviewing participants' feedback, says Larry Myers, senior vice president of human resources. Other CEOs talk about how people are important for the business, but Hanks actually gets it, Myers says.


In 2001, the company was hit hard by several factors, Myers says. The number of engineering school graduates had plummeted 18 percent since 1985 as students opted to study hotter topics like computer science. At the same time, Washington Group was facing an imminent worker shortage, with 25 percent of its workforce becoming eligible for retirement in the next five to 10 years.

Hanks and Myers realized that employee development had to be a core part of the corporate culture. Until then, Washington Group was an amalgam of about 20 companies, assembled through a string of acquisitions over past decades, each with its own policies and procedures and nothing binding them together, Myers says.

Their first priority was to create a standard annual performance review for all salaried workers. Until then, the different companies each had their own review process at year's end, but those discussions were often ineffective and rushed, Myers says. Under the new program, managers review 10 percent of their staff each month from January through October, leaving some time at the end of the year to catch up. …

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