Building A Stable Organization from Within
Thomas C Schleifer, Ph.D.
Our industry’s skilled labor shortage is not new. It is just worse with the pandemic. A growing shortage of skilled labor has haunted the construction industry for the past 15 years. Research has identified three major causes of this shortage:
- Baby boomers retiring – The baby boomer generation has traditionally filled a majority of construction industry jobs. They, however, have been aging toward retirement and when the pandemic interrupted the normal course of business, they opted to retire in droves.
- The Gen-Z and millennial generations do not find construction work attractive and have not stepped up to replace the retiring baby boomers.
- As the baby boomers picked up the retirement pace during the pandemic, contractors began to lose key employees to competitors and launched a bidding war that had little effect on stability and just artificially raised wages. Employees still went to the highest bidder and a revolving door was installed.
The Construction Personnel Pipeline
Historically, contractors rarely worried about hiring skilled workers. In fact, much of the task was handled by the workers themselves. Back in the day, trade unions provided an ample supply of apprentices to the contractors; and management, for their part, might only meet them on the job long after they had been hired. These eager apprentices were often relatives of existing crew members. In other words, the typical contractor didn’t need experience in human resource management. To this day, most believe that money is the only motivator, and their only response to the current skilled labor shortage is to bid against competitors for scarce trades people. This, of course, has only made the problem worse.
The 3Rs – Respect-Respond-Replicate
The construction industry needs a whole new human resource paradigm to change how we think about the individual employees that collectively make up our organizations. Recent research into what attracts skilled tradesmen/women and keeps them on the payroll reveals that “working conditions” far outweigh “money” as a motivating factor, and the most important “working condition” is respect. In the rough, tough world of construction, it is rare to find “touchy/feely” leadership. However, as it turns out, that is exactly what construction companies need more of to stabilize their workforce.
Respect
Most employees report that they leave one employer for another even though pay was negotiable in both places, because the current employer wouldn’t listen to their needs, didn’t keep their word, and rarely recognized individual performance. In other words, their employers didn’t care about them personally. Employers had little respect for them.
I submit that it is well past time to make communicating with our employees our number one priority. Genuine respect for your employees is the only thing that will keep them loyal to your firm and stabilize your company’s workforce in the long run.
Respond
Many contractors insist that they have always listened to their employees but that as soon as money was flashed, they went with the competition anyway. When I dug a little deeper, I uncovered another problem – the contractors were rarely very responsive to their employees’ needs. Here’s what contractors said:
- “Well, I can’t give them everything they want. I’d be out of business in a week.”
- “Their needs…Their needs…What about my needs?”
- “I have a suggestion box in every trailer, and I read the suggestions weekly. Some of them are ridiculous and some make sense, but you can’t do everything for everybody. I always take them under advisement.”
- “My company has gotten too big. I can’t listen to everyone. I must delegate and often something falls through the cracks. It can’t be helped when you get this big. You can’t make everyone happy.”
Genuine respect implies response. If we do not respond promptly to our employee’s needs, we will never establish a stable workforce.
Replicate
Finally, the traditional system of refreshing the construction workforce by existing journeymen recruiting and training apprentices or trainees is still the most natural way to create a stable workforce.
- All key employees should be encouraged to recruit and mentor at least one trainee or new apprentice every year.
- This responsibility should be part of everyone’s job description and carry a reward in the form of a cash bonus or equivalent.
- This program should be enshrined in every employee’s job description and formally administered by the human resources department.
When worrying about how you can restore your workforce, simplify the problem by boiling it down to the 3 Rs.
We will continue this discussion next week.
Find additional information on topics discussed here in the book The Secretes To Construction Business Success, published by Routledge https://bit.ly/3G9ornf.
For a deeper look into the employee engagement, read more here: ENGAGEMENT
For a broader view into the skilled labor market, read more here: SKILLED LABOR
To receive the free, weekly Construction Messages, ask questions, or make comments, contact me at research@simplarfoundation.org
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