It’s tough times for construction managers—you have plenty of work, but great employees are difficult to come by thanks to the growing labor shortage in the construction industry. Retaining valuable staff members goes beyond paying more. Here are some strategies for staff retention that will help you reduce turnover, so you can maintain profit margins and meet deadlines.
It Costs More than you Think
Studies on the conservative side of the scale estimate that replacing a salaried employee can cost between 6-9 months’ salary. Other studies claim this estimate doesn’t take in all the associated expenses. A CAP study found that replacing an employee can incur the following costs:
- 16 percent of annual salary for employees that work for minimum wage.
- 20 percent of annual salary for midrange positions.
- Up to 213 percent of annual salary for highly skilled employees.
For smaller construction firms, these numbers can really take a significant bite out of your profit margin and may compromise your ability to stick to timelines you agreed upon with your clients.
One of the most important attributes to have as a construction manager is humility. You must be able to learn from mistakes, admit when you are wrong and constantly be working to improve. This will help you and your crew to grow while ensuring that your business is constantly developing.
Times Are A-changing
Employees in a labor shortage can pick the jobs they want, so lower the expectations of what you can get done in a day and increase your salaries. This would include flex time, paid holidays and more vacation time. Paying more for less definitely doesn’t sit well with most small to medium business owners. You have, no doubt, worked incredibly hard to get here and you expect the same from your crew.
However, the job market and working culture have changed and you need to adapt or you will be losing valuable employees to higher paying, less demanding jobs. It will cost you less to pay more on salaries and benefits than it will to replace those employees you value most.
Consider a 401k program as a benefit for your employees. This is an attractive benefit and rewards them for their loyalty. Ensure that you build in a clause that means employees can only access their savings two years after they leave the job which will reduce the chances of them quitting just to access the money saved in this fund.
Other benefits like vehicles or paid transportation are good, but you’ll probably have to go one step further. Here, it’s the little details that make a huge difference. You need to be considerate and supportive of your employees rather than just trying to get as much as you can out of them. Improving their quality of life on an ongoing basis is what makes your workers loyal.
Giving them the Friday before Memorial Day and Labor Day off, giving them a couple of hours off on a Friday when the jobsite is far from home, or offering paid personal days all go a long way to improving worker satisfaction. Provide them with all the safety gear they need and training so that they know you care about their wellbeing.
Keep it Organized
Keep your jobsite clean and invest in proper removal of junk to keep toxic and hazardous material to a minimum while reducing the risk of accidents. Put in the time and effort to get proper contracts with clients and invest in technology that allows all crew members to have access to the latest plans. This not only reduces frustration and having to deal with unhappy clients, it also makes every day productive and each crew member knows exactly what they are supposed to be doing. Informed crews mean fewer mistakes and more productive days, so you’ll save in the long run.
Invest in technology and construction management tools so you know exactly when to schedule trades and what equipment is needed. Cutting down on hardware store runs and ensuring that your crew isn’t stuck waiting for trades will improve their working conditions and your productivity.
Have annual employee reviews where you calculate the value of their annual income, their 401k contributions, their paid leave and personal days, overtime wages and any other benefits you offer. Since employees don’t always think of all they are getting from you, this is a good exercise in letting them understand the full benefits of working with you. You should increase these benefits annually and discuss any training or promotion opportunities that can help your employees feel like they have a future with your company.