Benchmark Construction more specialized, looking to expand
Recessions, like hangovers, take some time to get over.
And the experience of an extended downturn often stays with you, even as conditions improve. Mike Callahan knows that firsthand.
Callahan expects his company, Benchmark Construction Co. Inc., to grow revenue this year by up to 35 percent, putting it at around $140 million.
But Callahan isn’t ready to hit cruise control at the 31-year-old general contractor based in West Earl Township, Lancaster County. His foot remains on the gas in search of $260 million in revenue and opportunities in markets farther afield than where the company has traditionally ventured.
Callahan, the company’s president, remembers the recession years and having to lay off 20 employees in a single day in February 2009.
Attrition further whittled away the staff count in 2010.
In addition, the prolonged recession forced many construction workers out of the industry, which has made it harder for general contractors such as Benchmark to scale up as building activity has improved over the last five years.
“The big challenge is we need more and more people in our industry,” said G. David Sload, vice president of education and workforce development for the Keystone Chapter of Associated Builders and Contractors Inc. “Over the years, we’ve not done a great job of promoting.”
Benchmark, which had 135 employees before the 2009 layoffs, hired slowly in 2011 and only started to really ramp up over the last two years. The company has hired 30 employees since February 2015, bringing the total of 168.
Company job fairs have helped attract new talent. Benchmark also has a strong workforce development pipeline that delivers a steady stream of apprentices in educational programs offered by ABC Keystone.
Recent growth at Benchmark has come, in part, from the company’s move away from the traditional department structure and into a more specialized approach.
Benchmark’s staff realigned last year into teams to tackle the company’s core markets of senior living, higher education, health care and commercial/specialty construction.
Rather than a whole department of estimators expected to have a working knowledge of all markets, Benchmark has estimators for each market who work closely with other construction disciplines in that segment.
“The days of the general practitioner are gone,” Callahan said.
Callahan said the change has improved communication, which means “less surprises” on the job site for subcontractors and a better overall project for the end user. Having market specialists also helps strengthen business development efforts, he said.
Benchmark has active projects with Lancaster General Health/Penn Medicine and WellSpan Health System. Other clients include Donegal Mutual Insurance Co. and Rhoads Energy Corp.
If there are any dips or a recession, Benchmark officials believe the market-oriented focus will make it easier to diversify into other projects. Callahan sees opportunity to expand into multifamily and industrial projects, or potentially the leisure market with work on country clubs and golf courses.
If Benchmark continues to grow at its current pace — the annual goal is at least 10 percent revenue growth — the company will need to open a branch office in the next couple of years, Callahan said. That will require significant investment in both real estate and manpower.
The 57-year-old said he believes there is only so much regional work available and that a branch outside of the midstate could provide greater advancement opportunities for Benchmark’s younger employees.
“I feel like I need to provide opportunities for them. You have to grow,” Callahan said.
A location hasn’t been chosen yet.
Jeremy Doss, vice president of Georgia-based RISE Real Estate, is confident Benchmark can succeed outside of its current footprint, which is generally within 90 minutes of the company’s headquarters on the Oregon Pike in Lancaster County.
“They have a good core. They can offer value outside of their sweet spot,” Doss said.
RISE is developing a student housing project that Benchmark is building at Millersville University. At 520,000 square feet, the new housing community will feature eight main residence halls and more than 1,900 beds.
What sets Benchmark apart from other builders, Doss said, is how “plugged in” the leadership is throughout the development process.
That’s probably the reason that multiple developers were looking to partner with Benchmark when the Millersville project was put out for proposals in 2012.
“The key is nurturing relationships they have and looking for the right opportunity,” Doss said.