If you are in the construction business reading this blog on your cellphone at the job site, I hope you have an adequate labor supply. This “skilled labor shortage” we’re all talking about will really threaten you if you try to grow too fast or your existing employees go elsewhere.
The Labor Pool
Contractors expect turnover in the labor pool and in the past, when the supply of labor far exceeded available positions, it was not much of a challenge. We could leave much of the recruiting of replacements to our field personnel at the supervisor and foreman level. The only challenge was to sort through the most qualified candidates and hire when we had an opening on an ongoing job. For a lot of contractors, the labor unions controlled the skilled labor pool and even though from that powerful position they constantly lobbied for better wages and benefits, the labor supply was simply not a problem. As for tradespeople leaving the unions, it was for the most part limited to death, disease, or retirement.
Times Have Changed
The decline of labor unions and the youth culture shifting away from trades to college educated white collar work have dried up the ready supply of willing skilled tradesmen. This is a long-term trend in construction that the industry has not addressed with any purpose. The growing anti-immigrant bias in our political discourse has served to place new limits on the supply of ready immigrant workers as well. Our society has succeeded in discouraging both the labor segments; those who used to want these jobs and the segment who need these jobs, and there is little we can do in the immediate future to change these long-term trends.
So, if you’re reading this blog on your cellphone in view of your crew laying brick at a school project, you might ask yourself how you can keep that entire crew working for you. If you lose them, there is no one waiting in the wings to take their place. If you lose any of them, who will build the new office building you just contracted for? The thing we all need to do is to protect the labor pool we already have and do everything we can to prevent turnover.
Causes of Turnover
Construction suffers from a 21.4% labor turnover rate, making it one of the highest rates among any industry. What is the turnover rate in your company? If it is 21.4%, you’ve got trouble coming because there is no one out there to take the place of that 1/5 of your labor force.
What are the causes of our industry’s high turnover rate?
- POACHING – We are doing this to ourselves. As the supply of young people willing or wanting to make a construction trade their life’s work dries up, contractors have started to poach competitors’ workers with higher wages, bonuses, and promising better working conditions.
- AGING – Boomers (born between 1946 and 1964) comprise 40% of the construction workforce and are retiring across all U.S. work sectors at the rate of 10,000/day. An estimated 54% of construction field and office leadership are boomers so the “brain drain” is almost beyond estimating in dollars. Take a look at your job sites. How many of your foremen and superintendents are boomers?
- WORKING CONDITIONS – I am currently conducting a research project into the causes of turnover in construction and early returns indicate that working conditions may be more important than money. That is to say that most employees who quit you may leave because they feel they haven’t been treated properly or respectfully, not because they haven’t been paid well. Recognizing this, one take-charge contractor took bold action.
“No one leaves my employ in 2022 unless they die. In that case they can go. Otherwise, it is my personnel responsibility to interact with any and every employee who is thinking of quitting and talking them into staying. I will do almost anything to convince them to stay. For the year 2022, my personal goal is zero turnover.
- MONEY – is not a problem. No one will poach any employee of mine for money. Period. I don’t care what I have to pay a valuable individual to keep them.
- RETIREMENT – is never immediate. I will “make an offer they can’t refuse” to any employee thinking of retiring during 2022…flexible hours, medical assistance, less strenuous position, more responsibility, less responsibility, family assistance, sincere concern, and friendship. I will alter any circumstance to make it more beneficial for him/her to stay for the rest of the year than to leave now.
- WORKING CONDITIONS – There is no working condition cited by an employee that is thinking of leaving my employ that I am not willing to fix immediately. In other words, for the first time in my long career I am listening to every employee right down to the laborers on my smallest jobs, and I am personally taking their individual needs and concerns seriously.”
More on adapting to 2022 next week.
Details on these issues in my latest book The Secretes To Construction Business Success, published by Routledge https://bit.ly/3G9ornf.
For a deeper look into employee retention, read more here: EMPLOYEES
For a broader view into Leadership, read more here: LEADERSHIP
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Please circulate this widely. It will benefit your constituents. This research is continuous and includes new information weekly as it becomes available. Thank you