Rick Herd admits he is "no spring chicken".
Despite an energy and fervour that has resulted in Naylor Love — a construction company he has overseen for 11 years — nearly quadrupling its turnover, there comes a point where a merciless flight schedule in and out of Dunedin becomes too much.
"Every week I’d be travelling away from home. A typical week would be three or four flights in an aeroplane, and it gets pretty tiring after a while", Mr Herd said.
"I’m still very much passionate about the company and the job, but I’ve got to a point in my life where I don’t want to be travelling away from home so much."
The outgoing Naylor Love chief executive plans to trade the airways for the shipping lines, taking up a new role as board director at Port Otago, while also continuing on the board of Construction Health and Safety New Zealand.
Looking back, a lot had changed at Naylor Love over his tenure, Mr Herd said.
What began as a 250-person company with about a $250 million-per-annum turnover was now a billion-dollar company with nearly 1000 employees.
While the construction company had made some wonderful buildings in his time, he found it most rewarding to witness so many employees develop and grow over time — including his successor, Mr Herd said.
"One of the things we’ve always tried to do at Naylor Love is to look after our own", he said.
"I’ve always had a philosophy that if you look after people well and train them well, then the bottom line tends to look after itself — and there’s a lot of truth in that.
"If you’ve got engaged people that know how to do their jobs, you’ll make money. If you’ve got disengaged people that aren’t trained well and don’t know how to do their jobs, you’ll lose money.
"Those basic rules have always worked for me."
There had been just as much change in the construction industry at large, and not entirely for the better, he said.
There were three distinct parts to the industry: residential, infrastructural and lastly commercial — which he had been involved in for about half of his career.
After a period of growth and opportunity, mounting construction and land costs combined with rising interest rates had culminated in a downturn in private sector investment.
Given its new focus on avoiding wasted expenditure, the new government had slowed down its spending but was revisiting high-end projects — namely the revoked classroom and school rebuilds.
"What we’re seeing is a double-edged sword in the construction industry and there is a real risk that the industry is going to go through another cycle of bust.
"That’s my biggest concern."
He had seen many companies get chewed up and spat out by the industry, Mr Herd said.
Mainzeal Construction collapsed in 2013, Hawkins had shut down and Fletcher Construction had pulled out of the commercial sector, he said.
He predicted a bleak future for the industry.
"I think we’re going to see a tough couple of years in the commercial construction industry.
"We’re probably going to see layoffs of people; we’re probably going to see some of the smaller companies get into trouble with solvency issues.
"Until such time as we see a reduction in interest rates and the private sector starting to re-spend, it’s going to be quite a while before I think the government starts to spend capital anything like they have been over the last five or six years."
The construction models they worked to were being commandeered by consultants early in the process, and they were not aware of the budget constraints, Mr Herd said.
What had resulted was a very expensive and inefficient industry, and builders needed to be given far more responsibility for both the design and budget of projects, he said.
Naylor Love had played a pivotal role in the redevelopment of facilities at the University of Otago, including the Eccles Building, the Otago Business School and the Music and Performing Arts Centre.
But post-pandemic, Auckland University was likely one of the only tertiary educators making money and the others were struggling one way or another, Mr Herd said.
Universities were big spenders in the commercial construction sector, even ahead of developers, and there was possibly a shift away from brick and mortar universities on the horizon.
But as long as there was a demand for face-to-face learning, which was the most effective form of learning, there would be a demand for classrooms and lecture theatres, he said.
The company had also worked on the Dunedin Railway Station, with other standout projects stretching beyond Dunedin.
Work on the Christchurch Cathedral rebuild had been especially memorable, as well as Auckland’s former Civic Administration Building.
While the building had been listed as a historic place by Heritage New Zealand Pouhere Taonga, Naylor Love completely rebuilt to convert it into apartments.
A geothermal plant near Taupo as well as several shopping malls all stood out to him and the company would continue to work on the Wellington Town Hall following his tenure.
But there was one project that had slipped through the company’s grasp.
While it was contracted for a lot of big work around the country, it only had a small team in Dunedin and he felt it did not have enough resources to bring down south to support a project as big as that.
"Having said that, the way the industry is going at the moment, that is actually a regret, I think", he said.
"If we had looked back two years ago when that job was bid, and we could see that we were going to see the downturn in the market that we are seeing now, we probably would have bid that outpatient building — and I’d like to think we’d be doing a better job than what’s going on there now."
The company made the best call it could have at the time, and it was important to not get into trouble by getting ahead of yourself — a fate he had seen other companies fall victim to, Mr Herd said.
"With Naylor Love, we’ve grown people and we’ve never tried to take on more than we possibly can.
"We thought at that time two years ago when the job was bid ... it would have been too big of a stretch for us, but that was probably a mistake."
Despite his imminent retirement from Naylor Love and a new start on the horizon at Port Otago, he would continue to lobby for the construction industry to become both safer and more productive, Mr Herd said.
"I’ve got too much passion for the industry to walk away from it."
