The demand for construction work has increased since the pandemic, with construction spending reaching a record high of $1.98 trillion in 2023.
While this boom brings plenty of opportunities, it also highlights a challenge: finding and retaining skilled workers. The Associated General Contractors of America (AGC) reports that 91% of construction firms are struggling to fill open positions. The U.S. Bureau of Labor Statistics (BLS) adds that there are approximately 151,400 openings for construction workers each year.
In this highly competitive market, high employee turnover and difficulty in attracting new talent can impact a company's productivity, workforce morale, and overall business sustainability. Losing skilled workers to competitors or seasonal turnover can derail work schedules and delay project timelines, making it crucial to develop effective hiring and retention strategies.
In this article, we will explore key initiatives to help construction companies build a strong team and keep their crew intact.
UPDATED AT: August 6, 2024
For construction companies, clear values such as innovation, collaboration, diversity and inclusion and a strong culture are crucial for building a cohesive team. A well-defined value system and mission statement guide everyday work, especially on complex projects. Leaders must demonstrate these values through their actions, setting a positive example for everyone.
According to a study by Jobvite, 1 in 3 employees leave within the first 90 days of employment. To avoid high turnover, regular check-ins with employees can help identify and address problems early, creating a respectful and open workplace environment.
This process includes assessing the work environment, gathering feedback from workers, and making necessary changes. By aligning their culture with their values, construction companies can increase employee loyalty and engagement, leading to better retention and project success.
Starting a new job on a construction site can be difficult and intimidating. Pairing new employees with a buddy or mentor can make things easier. In fact, 56% of employees said having a buddy or mentor helped them be more productive and effective in their first week. A buddy system also improves safety by ensuring new employees are trained on safety protocols and monitored to make sure they're following procedures, since first-year construction workers account for 60% of all injuries.
To improve teamwork and mentorship, construction companies should have a clear organizational structure so everyone knows their roles and responsibilities. 86% of respondents in a study attributed workplace failures to poor collaboration or communication. Encouraging open communication helps workers feel comfortable sharing their ideas and concerns, which can boost job performance. This helps new employees settle in and build their skills, fostering a strong and supportive team culture.
Offering professional growth opportunities and training for managers is crucial in the construction industry. Providing training and workshops helps employees enhance their skills and stay current with industry standards. Creating clear pathways for promotions and career growth ensures that employees understand how they can advance within the company. It's also vital to engage in conversations about career aspirations and development opportunities, showing that the company is invested in its employees' futures.
The Construction Industry Institute suggests that the construction industry will struggle with worker shortages until it adopts better management strategies. Good management is essential for employee retention, as employees often leave due to poor management rather than the job itself.
Promoting skilled workers to supervisory roles requires additional training in communication, motivation, and engagement. Managers should acknowledge hard work and recognize employees' achievements, whether through team meetings or social media shout-outs. These acknowledgments boost morale and enhance the company's employer brand, making it a more attractive place to work.
Involving employees in decisions, especially those that impact their work, is crucial for enhancing engagement. According to a Queens University of Charlotte study, 75% of employers consider teamwork and collaboration very important, but 39% of employees feel their organization lacks sufficient collaboration.
By including employees in the decision-making process, you create opportunities for them to share ideas, learn from each other, and work towards common goals. This approach fosters collaboration, breaks down organizational silos, and may even reveal overlapping initiatives, saving resources and preventing duplicated efforts.
A structured onboarding process is essential for integrating new hires effectively. Construction companies should start by developing a clear process with specific milestones and checkpoints to guide new employees through their initial days.
Research supports the benefits of a formal onboarding process. According to the Society for Human Resource Management (SHRM), employees are 58% more likely to stay with a company for three or more years when they go through a structured onboarding process.
Despite this, a study by Gallup found that 88% of employees feel their company’s onboarding program is lacking, highlighting the need for a more intentional approach.
To retain a workforce in today’s competitive market, it is essential to offer a competitive compensation package, including regularly reviewing and adjusting pay rates. Due to high inflation and a competitive talent market, even a small increase, such as 50 cents an hour, can have a significant impact on annual earnings and influence retention.
Ensure that pay rates are competitive by comparing them to industry benchmarks using resources like BLS data or websites such as PayScale and Glassdoor. In addition to salary, provide comprehensive benefits, including health insurance, paid time off, and retirement contributions. In the construction industry, where physical labor is intensive, it is important to offer health and disability coverage.
Consider providing additional incentives that employees value. Surveys by BambooHR indicate that 35% of employees value rewards, 32% prefer performance bonuses, and 30% appreciate flexible working arrangements. Mental health services and increased paid time off are also important.
Regularly gather feedback from employees on which benefits they find most valuable and adjust the benefits package accordingly. This approach helps improve employee satisfaction and retention.
In summary, effectively hiring and retaining employees in the construction industry requires a multifaceted approach. Key strategies include establishing clear company values and culture, improving teamwork and mentorship, offering professional growth opportunities, training managers, including employees in decision-making, creating a formal onboarding process, and providing competitive compensation and benefits.
By consistently applying these strategies, construction companies can enhance job satisfaction, reduce turnover, and foster a more committed and efficient team. Adopting these practices not only supports current employees but also strengthens the organization’s reputation as an employer of choice.