JACQUELINE DEY, Construction Industry Management Recruiter

The development industry in Orange County is being wracked by a major recession made worse by a federal crackdown on the real estate lending practices of banks and thrifts. More than 7,500 jobs have been slashed from construction payrolls in the county in the past year. The Jacqueline Dey Co. recruits executives for home building companies, and owner Dey recently discussed the changes occuring in this troubled industry with Times staff writer John O’Dell.

We know that a lot of plumbers and carpenters and laborers have lost their jobs in the crunch. What’s happening in executive circles?

It changes. In 1989, when home sales first started slowing, I had five consecutive assignments for vice presidents of sales and marketing. Four were to replace people perceived to be weak links. And in 1990, as it became very evident that the S&Ls; were no longer going to be a major lender to the construction industry, most of our assignments were to find high-powered finance people. And they didn’t want your typical financial officer, whose specialty was making presentations to banks and doing cost analyses and forecasts. What they wanted is what I affectionately call ‘global-thinking barracudas.’ The companies realized that they needed to deal with offshore money and decided they’d better get somebody specialized to do it.

If most of the management people who have lost jobs are seen as weak links, how did they ever manage to get hired?

Not all of them are weak. Top management has to blame somebody, so there are some people who lost jobs because they were used as scapegoats. That happens. But there also were a lot of slipshod hiring practices during the building boom. Companies needed bodies, and they needed them right away and they didn’t take time to check people out properly. And some of the companies just look to bring in new blood when things start going bad.

Doesn’t it seem strange that when new blood is called for it’s always the president who’s been around 10 or 20 years replacing people who have been around five years?

You got that right.

Doesn’t anyone ever look any higher up the management ladder?

They are now. I said it was sales and marketing people in 1989 and finance people in 1990. But all I’ve been doing this year is recruiting division presidents and top-level presidents. That means that corporate boards of directors or whoever’s the top (officer), are looking at their chief operating people and saying that, gee, since everyone else has been changed and things are still tough, it must be time for change at the top. And I agree with that thinking in almost every case I’ve seen. Some of these people who have had these top positions for five years and more have been making money despite themselves. They didn’t have to be that good in a boom, and a lot of bad management decisions got swept under the rug. But as the ranks get thinner, each person in the company is becoming extremely visible. And to survive now, you’d better be an A-plus player.

How did the industry get into this personnel mess, where so many had to be let go?

There are always layoffs in a recession; they can’t be helped. But beyond that, when the business started to boom in 1986, after the last recession in 1982-83, companies were opening new divisions all over Southern California--out in Lancaster and Palmdale and Moreno Valley and Victorville--and they felt they needed bodies to crank the work out. Then sales started sputtering in 1989, and the smart people started seeing this. Buyers got fed up with home prices going through the ceiling, and they said “no more,” and it all started falling down. All the bodies that were added to corporate payrolls in 1986 and 1987 became a burden.

And when the recovery occurs and people start buying homes again, do we see another big hiring boom so the cycle can start all over?

There are some definite lessons to be learned from this recession. I think those building companies that operate with more universally acceptable employment practices are going to do a lot better than the ones that are pretty much seat-of-the-pants, “it’s my company, and I’ll do what I want to” sorts of organizations. Good hiring practices are critical to success these days. And the smart builders are not going to just load up on bodies when business picks up. They are going to want people who are extremely well rounded in every aspect of the industry--multitalented people. They are learning that people are their most important asset.

And how do they get good people whom they don’t have to lay off next time a crunch comes?

The one aspect of real estate development that does not have to be risky is people selection. The most important aspect in either promoting people or selecting somebody new is to focus on what the company’s real needs are, and that means scrutinizing every person in the company in terms of what the business plan is and the kinds of expertise needed to make it work. Then you have to be willing to take the time to go find that person and not just hire someone because a friend recommended her or because he’s a marketing guy and the president just loves marketing guys.

Will all this have any impact on what has become a boom-and-bust cycle in real estate?

To the extent that major developers’ decisions can shape the future, let’s hope they will realize now that neither they nor we can afford any more of these booms or busts. In this recession, the smart companies have sharpened their tools, downsized their companies, gotten together with their architects to look at cost-effective designs, looked at their land plans and (started) scrutinizing who the target buyers will be now that the market is sputtering. If they keep that kind of discipline when times get good again, then maybe there will now be more of a slow, sustained, reasonable, non-hysterical pattern of growth instead of the ups and downs we’ve always had.

On the state of the industry. . .

“It’s still very much up in the air. Builders are looking at some excellent deals out there, as land prices fall. But they don’t know where their money is going to come from.”

On development industry employment trends. . .

“There still is a lot more shaking out to come.”

On life after real estate. . .

“There is a future for many people who have lost their jobs. There are people with finance, marketing and general management skills who will be able to go to other industries.”

On coping with a layoff. . .

“Stay away from pity parties. You don’t need sympathy, you need strength.”

On the importance of attitude. . .

“If we continuously see things as problems, it’s going to be a pretty dismal world out there.”