How do we retain skilled employees in construction?

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"​Often retaining good people isn’t about paying them more money, it’s just about treating them properly."

​Finding and retaining skilled people is one of the biggest challenges that many construction companies face. The construction workforce is highly mobile and many companies have a high turn-over of employees. Some managers have an attitude of ‘if they don’t like it they can leave’, or ‘we can’t afford to give them what they want so let them go’. This attitude is costly to the company, and often retaining good people isn’t about paying them more money, it’s just about treating them properly.

Why should construction companies care when people leave?

​Every Construction company seems to complain of a lack of skilled people. This problem is often exacerbated when our skilled employees leave to join our competitors, or in some cases leave the construction industry.

"It can cost 16 to 20 % of a persons annual salary to replace them"

​Replacing employees is an expensive business. Costs include; recruitment, training, uniform costs, sometimes transport, lost time and production while a replacement is found and lost production while the new recruit finds their feet. (According to one report it can cost 16 to 20 % of a persons annual salary to replace them - read more.)
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Then there are hidden costs such as the knowledge the person leaves with – which for a senior person on a construction project could be information required for variation claims, knowledge of clients, client relationships, etc.

Losing a senior competent and knowledgeable person can be difficult to replace as these people are often in short supply.
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Losing people often places an extra workload on those that remain behind. This could mean they become overworked and leave the company as well, or it could result in them not being able to carry out their duties properly resulting in mistakes and accidents on construction projects. High Employee turnover? The sooner you know the better.

How do contractors retain good employees?

"It's not all about money!"

​The first answer that springs to mind is money. However, you are seldom able to outbid the highest bidder. Anyway do you want to outbid the highest bidder? This is usually an unsustainable practice, it can upset other employees when they find out a new employee is being paid more, and higher wages drives the cost of doing business up. Do you want to employ someone who is only interested in staying if the money is right? Nevertheless, you do need to ensure that the salaries you are paying are market related. However, most employees don’t leave solely because of money, unless the pay is really poor.

There are a number of ways to retain employees which don’t necessarily cost lots of money. Usually just a little effort from management:

"Employees want to feel valued."

• Employees want to feel valued, and while money satisfies some of this need, it’s often just about saying thank you for a job well done, being complimented for good work or being asked for your opinion. Feedback and encouragement are important tools. providing feedback to the construction project team​

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• People leave managers not companies. People will often leave managers who are disrespectful in the way they treat them, their customers or others in the team. Nobody wants to work for a lazy manager, or one that isn’t respected in the company. Respect in construction - why it's important

"People want to progress and see opportunities"

• Employees want to see a career path. We sometimes leave a person doing the same job because they are good at it. Some people enjoy the security of doing the same job, but most would like to progress and see opportunities for promotion.
  
  
• Create a spirit of teamwork – the essence of ‘we’ not ‘them-and-us’. Many companies have people who don’t ‘pull their weight’, leaving a bigger workload for their co-workers. Others are only working to satisfy their own personal needs, often at the disadvantage of the company. Most employees want to be part of a bigger team all striving for the same goal.

"Success is empowering, infectious and stimulating. Everyone wants to be part of a winning team"

• Celebrate success – construction isn’t an easy business and there are often numerous problems encountered on a daily basis, so when there’s substantial success embrace and celebrate it. It helps make everyone feel part of a successful team – success is empowering, infectious and stimulating. Everyone wants to be part of a winning team.
  
  
• Training and mentoring is an important component. This not only makes the employee feel valued because the company is investing in them, but it also opens up possibilities for promotion. Most people want to better themselves and learn new things. Training and mentoring in construction

• Employees want to feel trusted. Some managers micromanage their employees, often stifling innovation and creating a feeling that they don’t trust their employees. Delegating tasks is part of imparting trust. The importance of effective delegation for successful projects

Image courtesy of stockimages at FreeDigitalPhotos.net

"Employees want to feel part of a winning brand,"

• Organisational culture. Employees want to feel part of a winning brand, a company that respects them, their clients and other stakeholders.
  
  
• Employees want to know that there is a future for them in the company. Some companies have a culture of ‘hiring and firing’ people. Who wants to work under conditions where you never know if today is your last day? Who would be loyal to that company? Part of this security is the stability of the company, is it a company that is often teetering on the edge of financial disaster.
  
  
• Communication – how it’s said and what is said. Not keeping people in the dark. Employees may not need to know something, but they may want to know it. Some companies only tell their employees what they think they require to know to complete their work. But many employees want to know more than this. They want to know the company’s future, what new projects the company has won, major new items of equipment that have been bought, and even who the new bosses are in Head Office. Many are embarrassed when they read about the company’s news in the press or hear from friends what is happening in the company before they hear it from their managers. Good communication is essential in construction

"Who wants to be frustrated by having their work interrupted by equipment breakdowns, or having to continually repair broken equipment?"

• Tools and equipment – people not only perform better using the correct tools, but they are often proud of new equipment displaying the company’s logo. Who wants to be frustrated by having their work interrupted by equipment breakdowns, or having to continually repair broken equipment? The Alarming Truth about Using Old Construction Equipment

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• Treat people fairly. This means paying them on time, not making petty deductions, not being seen to be treating others better than them, or favouring certain individuals. This means ensuring discipline is enforced fairly and equally. Sometimes we do need to carry out actions that some may see as being unfair, such as promoting one person but not another. In these cases it is important to explain your actions and why they weren’t promoted. Part of being treated fairly also means promoting people for the right reason, not just because managers fear losing them, or because they have been employed longest, rather ensuring the most competent person is promoted into a roll they are capable of filling.
  
  
• Hear what people are saying. This doesn’t mean pandering to every little complaint or giving in to every demand. It may mean explaining a decision, or why a particular demand isn’t justified. However listening may also bring more serious underlying problems to the fore.
  
  

Many of these actions cost little money and take a small amount of effort, yet they can create huge loyalty and benefits for the company

"​As an MBE company located in NYC who is currently transitioning to commercial construction, this book was very informative and very very practical." (Reader on Amazon)

Information in this article is contained in 'Building a Successful Construction Company: The Practical Guide' by Paul Netscher

Good companies are built with good people

​Strong companies are generally built by good people. We are usually only as strong as our team. So invest in your team.

By the time a person hands in their resignation it’s difficult to dissuade them. They probably have already explored other alternatives and many would have signed an employment contract with another company.

How do you retain your good employees? In future articles I’ll discuss other actions you can implement.
​#constructionmanagement #constructionskills #constructionprofessionals #contractors

​Other similar articles by the author:
Providing feedback to your construction team.
Why construction companies should be concerned about their reputation?
Understanding what impacts your company’s reputation.

​(Written by Paul Netscher the author of the acclaimed books ‘Successful Construction Project Management: The Practical Guide’ and ‘Building a Successful Construction Company: The Practical Guide’. Both books are available in paperback and e-book from Amazon and other retail outlets. This article is adapted from information included in these books. Visit Construction  Management Services on this website to see how Paul can help you)

© 2022 This article is not to be reproduced for commercial purposes without written permission from the author.