4 min read February 2024 — In an interview with Focus:, Michael Russell, president & CEO, H&J Russell & Company discussed the company’s strategic focus on infrastructure, technology, and building inclusive communities, addressing challenges like talent acquisition, gentrification, and environmental sustainability within the construction industry.
Reflecting on the past year, what have been the most significant developments for your firm in that time?
The most significant developments for us revolve around our involvement in data center projects. This area really drove our business in 2023 and continues to do so in 2024. Over the last three years, we began working with some of the major providers in this technology, and it has become our largest volume of business as we head into 2024. So, 2023 was a key year for this development, and we will continue to focus on it. Another significant area is aviation. As we look to the future and consider infrastructure spending, aviation has always been a core strength of our organization. We’re finding more opportunities nationwide in aviation, particularly working in some of the bigger airports like LAX, DFW, and Atlanta, as well as others like Austin, Texas, and Seattle. This sector has been and will likely continue to be a key driver for our business in the coming years.
How has the current economic landscape of Atlanta influenced your company’s project choices and your business?
Atlanta has been a very dynamic marketplace, and it has historically outperformed the nation regarding economic growth and the diversity of business opportunities. As a result, Atlanta continues to be our hub and our home base, where we see consistent growth. The diversity of businesses here is particularly beneficial for firms like ours. It provides us the flexibility to work across different markets and execute in various spaces, ranging from healthcare to nonprofits. We have a variety of clients that reflect this diversity. For companies like ours, with a strong base in Atlanta, the city remains a hub of activity. It offers ongoing opportunities for business growth, especially for those, like us, who have their home base here.
Given the challenges in talent acquisition and cost in the construction industry, how is your company navigating these challenges?
The construction industry has indeed faced challenges, especially with the rising interest rates in 2023. This situation made many in the industry adopt a ‘wait and see’ approach, observing market trends before making decisions. For our company, it highlighted the importance of having diversity in our business markets. Being diverse helps us navigate these uncertain times. For instance, we’re not heavily involved in the office space market, which is beneficial right now since that market has cooled off due to the interest rates. However, the multifamily market is likely to be more challenging in the future.
Despite being in less impacted markets, we still face competitive pressure throughout the industry. This competition can strain profit margins, so we have to be vigilant. One recent concern is the pause in the tax credit market due to legal challenges faced by cities and municipalities. This pause significantly impacts the ability to provide affordable housing in rapidly growing cities like Atlanta. It’s crucial to maintain incentives that help developers keep projects affordable. This is especially important to prevent dramatic gentrification and to support affordability in a city experiencing explosive growth. This issue has become more pressing in the last month, and it’s something I’m concerned about looking into the future.
In our industry, particularly in construction and program management, there’s a significant talent war. Attracting the right people to execute our projects is a challenge due to a talent shortage. This is a short-term issue, but I’m also concerned about the future of our industry and attracting young people to it. We need to make our industry more appealing to the younger generation. This is a common theme across the industry: the need for more talent. We’re investing in internal resources and working with outside recruiters to address this. We also incentivize our current employees to help bring in new talent, as they often know strong candidates in the industry. Attracting talent is crucial, but so is retaining it. We focus on keeping our employees engaged, providing training, and communicating our culture and values to them. Both attracting and retaining talent are major issues for companies in our industry.
How does your company’s commitment to building inclusive and equitable communities shape its approach to new projects and partnerships?
Our mission goes beyond simply constructing buildings; we aim to build communities and create impactful projects. Our focus is on fostering equity within the city. We’ve developed competencies in utilizing various incentives and understanding how to operate effectively in this space. Our commitment to projects that positively impact communities and address issues like gentrification and affordability is fundamental to us. We continually seek projects that align with this mission and bring our expertise to ensure their success.
How are you leveraging technology and incorporating it into your projects?
Technology is increasingly essential in our industry. It’s not just about keeping up; it’s about differentiating between good and great companies. Using technology efficiently is crucial for the economic sustainability of a business. While we’re not at the cutting edge, we’re on the journey to improve our technological capabilities. Tools like AI are no longer just enhancements; they’re necessities for the sustainability of our business model. Investing in technology and finding more efficient execution methods is vital for any business today.
How do you incorporate environmental practices into your project development?
Environmental practices are becoming increasingly relevant. Although states like Georgia may not be at the forefront of environmental requirements, there’s no denying the impact of the built environment on sustainability. We expect that our clients and their customers will increasingly demand sustainability in their buildings. We’re committed to improving in this area, bringing more value and creativity to our projects. Our focus is on seeking projects that require environmental consideration and keeping ourselves updated to provide value to clients in their sustainability efforts. This aspect is real and will continue to grow in importance in the built environment.
Looking ahead, what are the key areas of focus for your company over the next two to three years, and what are your top priorities during this time?
Our top priority will continue to be infrastructure, which encompasses a range of areas including data centers, aviation, and rail business. To me, data centers represent technology infrastructure, while aviation and rail contribute to building our transportation infrastructure. Our focus is on enhancing our competence in the infrastructure space. Additionally, continuing to advance our technology infrastructure is crucial. Another key area is diversification. We operate in construction, program management, and development, and this diversity has been our strength. It allows us to find opportunities and sustain economic fluctuations. So, diversification in our business will remain a focus for us.
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