Skyline Construction Named a Top Small Workplace for 2009
September 28, 2009

In a difficult economic year, these companies, including Skyline Construction, managed to keep their employees a priority.

By KELLY K. SPORS

It's the kind of year that separates great small businesses from good ones.

For many companies, tough economic times inevitably end up pushing the work environment to the back burner. Benefits are slashed, innovative programs are dropped, employees get shut out of big decisions. Employees are lucky to have a job, many bosses figure. Anything extra is unaffordable.

But other companies view things differently. For them, a commitment to employees' well-being and development in times like these can pay off handsomely—both now and in the future. Companies with low turnover and high employee satisfaction and engagement are better positioned to save money and devise innovative ways to navigate the crisis. And they set up the company to do even better when the economy turns around.

For the third year in a row, The Wall Street Journal teamed up with Winning Workplaces, an Evanston, Ill., nonprofit that helps small and midsize companies create better work environments, to identify 15 small employers who have built some of the most exemplary, innovative workplaces.

Many of these winning employers faced tough times this year. Indeed, several laid off employees or cut benefits and pay. Even so, they didn't ditch their commitment to maintaining the best possible work environments. They used their strong people practices to fight the recession with empathy and open communication, and involved employees in cost-cutting and other key decisions. Many improved their hiring, professional development and retention practices so they could emerge from the downturn stronger.

So, what are these stellar small businesses, and what practices set them apart? Take a look.

SKYLINE CONSTRUCTION INC.
BUSINESS: Commercial construction
BASED: San Francisco
FOUNDED: 1996
EMPLOYEES: 50
2008 REVENUE: $101 million

In 2005, two of Skyline Construction's three founders left the company. Rather than find new owners, the shares were purchased by an employee stock-ownership plan that gives stock to employees each year in a qualified retirement account. That move helped usher in a major cultural shift, says remaining founder and now Chief Executive David Hayes. "It's been interesting to watch the evolution," he says. "The ownership culture has really been ingrained into our core here."

Today, the company is 100% employee-owned, and every employee gets shares. Mr. Hayes decided early on to allow unionized employees, such as carpenters and laborers, to participate in the plan even though some advisers tried to dissuade him; they feared the workers might try to bargain for bigger contributions to the plan, among other things. He felt it was important to have everyone, especially front-line workers, involved.

Mr. Hayes also tried to create a more inclusive, engaged environment by sharing financial information and regularly holding meetings to discuss workplace issues. Previously, most decisions were made top-down by the three owners and "then announced," he says.

Each fall, one employee from every department is selected to participate in a two-day retreat at a hotel where the company develops its strategic goals for the coming year. Mr. Hayes also urges employees to come forward with problems—and then brainstorm solutions collectively. In 2006, for instance, some project managers reported that they felt overworked and harried due to juggling duties. He called a dinner meeting with the project managers, and they ultimately decided to start taking on interns to help out.

The team spirit has helped the company stay cohesive in the recession. Skyline has laid off more than a dozen workers due to slow demand in the construction business. In a June meeting, Mr. Hayes asked his employees for ways to prevent further layoffs, and they volunteered to take pay cuts instead. The company cut employee pay up to 10%, but paid back half of the back pay in August.

Claudia Mahallati, a 28-year-old project accountant, says Mr. Hayes and other managers make her feel appreciated by asking for her input. Last year, she and other accountants expressed frustration with the accounts-payable process, which they felt was disorganized. They met with the controller and ultimately decided to set up a collective email account for accounts payable, instead of having customers correspond with individual employees. She adds: "It's little things sometimes, but they're always listening to you."